How Contactless Payments work
Almost 3/4 Kiwis are using contactless technology to pay retailers today and that’s on the increase. But what are contactless payments and how do they work?
Contactless payments at a glance
- Contactless transactions are made by holding a contactless card, tag or mobile device close to an enabled-terminal.
- The terminal and the card, tag or mobile device ‘talk’ to each other using NFC (near field communication).
- There are multiple layers of security to protect customers and merchants.
- All Smartpay terminals are contactless-ready, with future trends always being explored.
What are the options in New Zealand?
Tap-and-Go is well established in New Zealand, with Visa’s Paywave, Mastercard’s PayPass, Amex’s Expresspay and Unionpay’s Quickpass.
ApplePay, Google Pay and Android Pay are also available for contactless payments from your mobile phone or smartwatch.
AliPay and WeChat Pay are also available for contactless payments from your mobile phone.
Kiwis are the highest users of contactless technology and almost 75% of Kiwis say they find it convenient and fast.
Setting up contactless payments
Choosing to accept contactless payment is easy. If you’ve got a Smartpay terminal it’s even easier since all our terminals can take contactless payments.
You can get setup by simply contacting your merchant bank and letting them know you want to accept contactless payments.
If you don’t have a Smartpay terminal, then maybe you want to drop us a line.
Contactless payment is not an option for purchases with Cash Out transactions, or in Offline Mode.
What happens in a contactless transaction?
Contactless transactions typically use NFC (near field communication). This technology allows a terminal and a contactless card, tag or smartphone to ‘talk’ to each other over a short distance. There’s no need to swipe or insert cards. It works like this:
- On a Smartpay terminal the NFC reader is placed conveniently at the top of the screen, and if you’ve enabled contactless payments your customer will see the contactless logo and be asked to ‘present’ their card as well as ‘insert or swipe’.
- On a Smartpay terminal, the coloured lights on your screen will tell you if the card, tag or smartphone has been successfully read.
Safety first – are contactless payments secure?
Six reasons customers and retailers can trust contactless:
- Contactless cards never leave a customer’s hand:
When you hand your card over to make a payment, you are more vulnerable to card skimming than with contactless payment.
- Unique transaction codes:
Every transaction has its own unique code to prevent double billing. It also means all payments can be tracked.
- $80 purchase limit:
As an extra safeguard, customers need to enter their PIN for any purchase over $80. With Covid-19 this threshold has been increased and varies by bank.
- Built-in encryption:
Contactless cards were specifically designed to transmit data, and have built-in security features that older cards don’t.
- Contactless, not remote:
A card or device needs to be within a few centimetres of the terminal to work, so it’s virtually impossible for anyone to ‘intercept’ the details.
- Limited details:
Contactless cards only contain the same data that’s written on the card so fraudsters can’t clone the card.
The future of payment technology
Payment technology is developing at a rapid pace and contactless NFC is just one approach being developed and used around the world. Smartpay is always keeping an eye on these trends when developing our own technology. No matter how it all plays out, the goal for us is to provide “frictionless payment”, where the whole process is easier for you and your customers.
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Let us help you
Want to talk through your options? Call our Sales team on
0800 004 905 and we can help you with a solution based on the needs of your business.
Or complete the form online and one of our sales specialists will call you back within the next business hour.
Existing customer looking for help or support? Contact our Customer Service team.