Payments
What Is Contactless Payment?
Tap-and-go cards, mobile wallets, speed benefits
Intro
Contactless payment is a quick and easy way to pay for goods and services without physically swiping or inserting a card. It uses technology that allows you to simply tap your card or device near a payment terminal.
Main Definition
Contactless payment refers to a secure method of purchasing items using a debit card, credit card, or smart device by tapping it near a point-of-sale terminal equipped with the necessary technology. This method is popular because it speeds up transactions and reduces the need for physical contact, which is especially important in maintaining hygiene. A common misunderstanding is that contactless payments are less secure, but they use encryption and tokenization to protect your information.
Examples
Examples of contactless payments include:
Using a contactless-enabled credit or debit card to pay for groceries by tapping it on the card reader.
Paying for a taxi ride using a smartphone app that supports contactless payment, such as Apple Pay or Google Pay.
Purchasing a coffee by tapping your smartwatch on the payment terminal.
Key Relationships
Contactless payment is closely related to several other business concepts:
Cash Flow: Contactless payments can improve cash flow by speeding up transaction times and reducing the need for handling cash.
Expenses: Businesses may need to invest in contactless-enabled payment terminals, which can be considered a business expense.
Tax: All transactions, including contactless payments, need to be recorded for tax purposes.
Compliance: Businesses must ensure their contactless payment systems comply with industry standards and regulations to protect customer data.
Frequently Asked Questions
Is contactless payment secure? Yes, contactless payments are secure. They use encryption and tokenization to protect your information.
What is the limit for contactless payments? The limit can vary by country and bank, but it is typically set to a small amount to minimize risk.
Do I need a special terminal for contactless payments? Yes, you need a payment terminal that supports contactless technology to accept these types of payments.
