Non-cash payments are rapidly becoming the norm in the UK, with “tap and go” technology now a familiar part of everyday transactions. As more businesses and consumers embrace contactless payments, it’s worth understanding exactly how this technology works, its benefits, and what it means for both customers and retailers.
What Are Contactless Payments?
Contactless payments allow customers to pay by simply tapping their card or enabled device on a payment terminal, rather than inserting a card or handing over cash. This technology uses either radio-frequency identification (RFID) or near field communication (NFC), which securely transmits payment data between the card or device and the terminal.
Accepted forms of contactless payment include:
- Debit and credit cards with the contactless symbol
- Smartphones and smartwatches using digital wallets (such as Apple Pay, Google Pay, and Samsung Pay)
- Wearables and key fobs equipped with payment chips
The process is simple: the customer taps their card or device near the terminal, and the payment is processed in seconds—no need to enter a PIN or sign a receipt for transactions under the current contactless limit.
How Fast and Convenient Is Tap and Pay?
Contactless payments are designed for speed and convenience. Transactions are typically completed in half the time of traditional payment methods, reducing queues and making the checkout experience smoother for everyone.
- No PIN required for payments under the contactless threshold (currently £100 in the UK for cards; higher limits may apply for mobile wallets depending on the retailer).
- Instant payment confirmation for both merchant and customer.
- No need for paper receipts unless specifically requested.
This efficiency is particularly valuable for retailers during busy periods, helping to serve more customers and reduce waiting times.
Is Contactless Secure?
Security is a top priority with contactless payments. All major card providers have built robust protections into their systems:
- Fraud protection: Contactless cards and devices are equipped with multiple layers of security, including encryption and transaction limits.
- Spending caps: Single transaction limits are in place to minimise risk. Occasionally, customers may be prompted to enter their PIN for added security after several consecutive contactless payments.
- Zero liability: Cardholders are protected against unauthorised transactions, and contactless payments are considered safer than carrying or handling cash.
Cases of fraud with contactless payments remain extremely rare, and the technology is widely regarded as secure by both industry experts and consumer groups.
Benefits for Retailers
Contactless payments offer a range of advantages for businesses, including:
1. Faster Transactions and Increased Turnover
- Quicker checkouts: Serve more customers in less time, especially during busy periods.
- Reduced queues: Shorter lines mean happier customers and more sales opportunities.
2. Lower Operational Costs
- Less cash handling: Reduce time and costs associated with counting, storing, and depositing cash.
- Minimised risk of counterfeit notes: Electronic payments eliminate the risk of accepting fake cash.
- Reduced wear and tear on terminals: Since cards and devices don’t need to be inserted, your payment machines last longer.
- Paperless receipts: Only print receipts when requested, saving on paper and maintenance costs.
3. Enhanced Security and Reduced Fraud Risk
- Built-in fraud controls: Payment networks monitor for suspicious activity and use advanced encryption to protect data.
- PIN prompts: Regular prompts for PIN entry help verify the cardholder’s identity.
4. Greater Convenience for All
- No need for signatures or PINs (within limits), making checkout seamless.
- Widely accepted: Most UK retailers now offer contactless, making it essential for any modern business.
Key Takeaways
- Contactless payments use secure RFID or NFC technology to enable fast, convenient transactions with a simple tap.
- Retailers benefit from quicker transactions, reduced operational costs, and improved customer satisfaction.
- Contactless is safer than cash. No need to walk to the bank with cash. Built-in fraud prevention and spending limits to protect both merchants and consumers.
- Paperless and efficient: Less need for physical receipts and less wear on terminals.
Need advice on card payment solutions, backup options, or PCI compliance? Contact Nexpay or call us on 0333 305 2270; because every transaction matters.
