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3 Post-COVID Benefits of Contactless Payments for Retailers (and 3 for Customers)

Contactless payments skyrocketed in popularity during the COVID-19 pandemic while cash payments plummeted. This was partially attributed to the diminished capacity to shop in-store, but was also connected to the fear of viral transmission via both shared payment terminals and cash itself.

However, the trend toward touchless payments doesn’t end with easing of transmission fears and the lifting of restrictions. Contactless payments solve many of the pain points that have always been experienced by both retailers and customers. Investing in new methods of payment that support efficient, effective transactions for all parties is what will set retailers apart, both today and in the future.

COVID-19 may have forced retailers to offer contactless payment options, but the move toward sustained use is clear; in a global Mastercard survey, 74% of customers said they will continue to use contactless payments in the future. Accenture has also listed “a strong push towards a cashless society” as one result of the pandemic.

Contactless payment options can cover a wide range of solutions, including tap-to-pay debit and credit cards, other tap options such as key fobs and mini-cards, mobile wallets such as Apple Pay or Google Pay installed on a customer’s smartphone, and contactless payment solutions that send texts to the customer’s smartphone to complete the purchase without needing a mobile wallet.

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That said, tap-to-pay options still require a physical terminal and can sometimes stall with false declines, requiring customers to touch the terminal when they insert or swipe a card, whereas mobile wallets and solutions that turn the customer’s phone into the point of payment offer a true contactless solution.

So what are some of the post-COVID benefits of these true contactless payment solutions for retailers and their customers?

Benefits for the Retailer

1. Reduced hardware costs.

Maintaining payment terminals can be costly and time-consuming to purchase and maintain. As the Mastercard survey shows, customers are becoming less satisfied by traditional payment methods and increasingly forgoing traditional payment methods altogether — potentially making investment in and maintenance of physical payment terminals a waste of time and money.

When retailers focus on implementing payment tech that supports the shift toward contactless payments, there is a dual benefit. By leaning more on contactless options, retailers will not only satisfy customers who prefer to pay with contactless methods but also reduce expenses associated with physical payment terminals. And by implementing intelligent contactless payment software, updates are easily implemented with minimal impact on the business.

2. Secure transactions.

Whether from identity thieves or credit card mules, transactions using physical credit cards are always open to various methods of fraud. But when a customer pays for their purchase via their mobile device, this risk is greatly reduced.

Furthermore, from the remote payment interface, the customer’s credit card data does not pass through the merchant’s system. Data goes from the customer’s mobile device directly to the payment processing solution, ensuring all payments are secure.

3. Enhanced integration opportunities.

When retailers digitalize payments, they open the door to technological integrations that improve the customer’s experience with the brand. “The ability to accept mobile phone-based payments opens up a multitude of marketing opportunities,” according to FirstData. Whether a retailer wants to improve existing integrations with their loyalty programs or enhance opportunities that use personalized mobile marketing techniques — such as couponing and location-based marketing — retailers are better able to reach their audience.

Location-based push notifications are becoming more popular, found a Localytics push notification survey. It reported that 49% of people said they’d use an app more if it sent them push notifications triggered by their selected hometown, while 42% said they would use an app more if push notifications were triggered by their current location. This is important when 93% of shoppers in the United States use a coupon code or discount throughout the year, according to Statista.

While contactless payments create a positive transactional experience, the integrations available to retailers with contactless capabilities also enhance many other aspects of a customer’s journey.

Benefits for the Customer

1. Faster transaction times.

Retail transactions aren’t always fast, so maximizing efficiencies is key. Contactless payment services enable associates to complete transactions without a physical payment terminal being available. Whether a store is busy or associates want to bring the transaction to wherever the customer is, contactless technologies speed up the payment process, improving the customer experience. A Fiserv study, conducted by The Harris Poll, found that 68% of customers say “speed and efficiency are important in determining how they pay.”

Retailer bonus: A fast transaction doesn’t only benefit the customer but the retailer as well. When a customer can go through the purchase journey faster, it allows for more customers to be assisted in a day. More customers mean increased revenue, which over time can result in a significant boost to a retailer’s bottom line.

2. Improved transactional convenience.

With alternative methods of payment, retailers are supporting the changing paths to purchase of today’s modern shoppers. In a study by the National Retail Federation, 97% of customers said they had backed out of a purchase because it was too inconvenient for them to complete the transaction. Enabling mobile wallet payments and investing in other touchless technologies greatly increases the convenience of the transaction.

With the demand for speedy and convenient transactions also comes an expectation that a retailer can accept the form of contactless payment preferred by a customer. The Fiserv survey found that 74% of customers have used mobile wallets and 61% of customers have tap-and-go payment cards. For retailers, this means that the contactless investments they make should consider the kinds of payment preferences their customers prefer.

3. Greater payment flexibility.

Contactless payments by nature improve the flexibility of a payment process. Whether by changing the location a payment takes place in, the device that’s used to process the payment or how the customer provides payment, contactless enables many pathways to complete a transaction.

When a customer isn’t bound by the cash or cards in their wallet, and they’re not crunched for time with a painstakingly long wait for a physical payment terminal, they’re much more likely to complete their purchase. Retailers that can take contactless payments in a variety of methods are more likely to see a greater level of satisfaction than those that don’t. When one store offers multiple options, it becomes the standard for all retailers.

Contactless Means Future-Ready

Solutions that support alternative customer-centric payment methods are becoming essential to creating a seamless transactional process and an experience that customers in telecom retail will come to expect. But in North America, the trend is lagging behind the curve set by Europe and Asia. This makes contactless payment technologies ripe for even greater growth in North America as consumers increasingly expect this experience.

Flexible, convenient, touchless transactions are no longer simply nice to have — they are the future of the retail industry.


Ken Konkel is VP of Technology at iQmetrix, a leading provider of intelligent retail management solutions designed to power the telecom retail industry. He heads up a talented team focused on meeting the unique retail transformation needs of iQmetrix customers. Konkel started working at iQmetrix as a summer student in 2006, before getting his first project as a developer building the company’s beloved Linked Products feature. Since then, Konkel has filled various roles at the company including Developer, Team Lead, Product Manager and Enterprise Delivery Lead.

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