Long gone are the days where you would pay something with cash or swipe your card at the POS terminal. Nowadays, we see more and more people and businesses using contactless technology.
Tap and pay technology has also become very convenient during the pandemic of coronavirus. In the full swing of the COVID-19 pandemic, most stores and businesses recommended using a contactless way of payment to comply with the distancing regulations correctly.
But what exactly is contactless payment? In simple terms, it’s a technology that uses radio frequency identification to connect devices such as your smartphones, watches, or bracelets with the payment reader when they are close to the POS terminal. This type of technology is faster, more secure, and reliable compared to all the other ones.
However, every new technology has its advantages and disadvantages. So, we decided to make a list of all the pros and cons of contactless payments.
All the advantages of contactless payment
The advantages of contactless payments are many for individuals and businesses alike. Here, we’re going to list a couple of main advantages, because covering all of them would be impossible.
1. Contactless payment is fast and easy to use
In the fast-paced world of today, efficiency is extremely important. And that is precisely what contactless payment offers – quick and easy transactions, no more standing in long payment lines, and wasting precious time.
This is probably the biggest advantage of contactless payment. No more searching for your wallet to pull out cash or card, no more check-out crowds because someone forgot their PIN and similar time-wasting mishaps.
For both customers and businesses, contactless payment is easy and convenient, efficient even.
2. Contactless payment is safer
Contactless payment allows you safer transactions compared to other modes such as magnetic stripe. Payment modes with magnetic stripes hold all your bank information precisely in that stripe. Unfortunately, hacking that magnetic stripe is easy and you risk your information being stolen and misused.
Contactless payment, on the other hand, features a chip technology that protects you and your information through NFC technology. NFC technology also known as near field communication uses data encryption during the transmission of sensitive information.
From the business’s perspective, contactless payment technology is an ideal way to protect your business from any hacking attempts. If you’re interested in innovating your business with a tap and pay technology, look into an independent payments partner. Your payments partner can help you discover different safe and secure payment solutions for your business.
3. Contactless payment doesn’t require any additional fees
Another great thing about contactless payment is that it doesn’t require any additional fees, meaning that if you accept contactless payment, you won’t have to pay anything extra to card companies.
Nothing will change for businesses either since the fees are the same as for regular credit cards.
The disadvantages of contactless payment
We can’t talk about the advantages of this type of technology without mentioning the disadvantages as well. There are certain concerns, or rather challenges, that you should be aware of when it comes to contactless payment.
1. Limited acceptance and international availability
Just with every innovation, it takes time to catch on. For this technology to work, both consumers and businesses need to invest in it. What’s the point of consumers having the technology when retailers and businesses still don’t have it integrated with the current payment system.
Another reason why tap and pay technology is not yet widely accepted is its spotty network coverage. Also, you need to have a smartphone, watch, or bracelet that is NFC compliant – so there’s that too.
When it comes to using contactless technology internationally, you may discover that your devices don’t work everywhere. Even though the technology is similar, you may be faced with the fact that your mobile wallet is not accepted abroad. Also, don’t forget about the foreign transaction fees!
2. Contactless payment is not all that safe after all
Tap and pay technology doesn’t require any PIN authorization which makes it easy for thieves to make purchases with your money until the card or account is blocked. Hackers are still a risk since they are becoming smarter – using malware or spy attacks or inventing new ways to steal your information.
If you’re concerned about this, talk to your bank. In most cases, banks give a 100% fraud guarantee and in that way relieving you of responsibility.
3. Low transaction limit
There is a maximum payment limit to this type of payment. Banks and other financial institutions that offer contactless payment options put this limit to prevent misuse and fraud. You can’t change the limit per transaction the bank has chosen.
Regardless of all the advantages and disadvantages of contactless payment, more people should be taught how to use it for it to really become widespread. Many people are afraid of losing their money or it being stolen if they dare to switch to contactless payment.
When it comes to these kinds of technological innovations that involve people’s money, a lot more needs to be done on educating people and merchants and making sure they know how safe their money is.
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