Contactless payments are poised for growth in the U.S. as EMV chip compliance leads to wider adoption of contactless technology. The U.S. has lagged behind in contactless payment use for several years, but this may change as merchants must become EMV compliant and invest in new terminals supporting contactless payment.
Apple Pay, Android Pay, and Samsung Pay are providing consumers with a convenient contactless option which should grow as mobile technology becomes even more prevalent. As merchants have the terminal technology in place to accept these payments, customers will grow to expect them more. For example, Starbucks has had strong results with their mobile payment app and now sees over 10% of sales at their busiest locations paid with their app.1
According to a recent study, a third of U.S. retailers are projected to accept contactless payments by 2019.2 Here are three factors that indicate contactless payments are gaining traction in the U.S.
EMV Chip Adoption Accelerates Contactless Adoption
As merchants are required to become EMV compliant, an upgrade in terminal technology is often necessary. As EMV terminals become ubiquitous, so does contactless payment ability since many of the EMV chip terminals manufactured in the last few years can also process contactless payments.3
In other words, when merchants make the switch to EMV chip readers, they could be upgrading to accepting contactless payments at the same time. Or at least they may have the hardware in place to accept contactless payments if they so desire. The PAX S80 is an excellent example of a terminal that excels at both EMV and contactless payments.
Speed of Transactions
So, now that a merchant has contactless payment technology in place, what would prompt them to use it? Keeping the line moving!
Busy merchants have found that lines have slowed due to EMV chip readers, even as the credit card companies have worked to speed up transactions. As consumers look for a faster option, contactless payments might be the answer. Contactless payments use radio frequency technology to exchange secure payment information with a reader quickly and securely to keep check out time short. It is imperative for merchants who have a contactless enabled reader to display the contactless payments symbol at the point of sale and throughout their establishment so consumers know they can use Apple Pay, Samsung Pay or other digital wallets at their location.
For merchants looking for speed at the point of sale, consider the Clover Mini. This sleek terminal quickly handles contactless payments to keep happy customers moving through their transactions.
Mobile Wallets and Wearable Technology
Point of Sale systems that accept contactless payments also include payment acceptance of Near Field Communication (NFC)-enabled smartphones and wearables. Users with Apple Pay, Android Pay, and Samsung Pay on their phone or wearable device can quickly move through their transactions at the terminal and continue on their way. This level of convenience feels cutting edge as it reduces cash handling and takes advantage of the latest technology.
At the moment, Apple Pay is responsible for three out of four contactless payments in the U.S., with Apple claiming a growth rate of 450% year over year.4 As U.S. consumers become more comfortable paying with a mobile device, this should spur the growth of contactless payments.
Wearable technology is growing, too, as fitness trackers and smartwatches become more sophisticated. Visa is taking advantage of the Olympics to showcase a new wearable, the beautifully minimalistic Visa Payment Ring. For athletes and event organizers, the Visa Ring eliminates the need to carry a wallet or mobile device at all.
The simplicity of waving a wearable device at the point of sale is undeniably attractive for users, so it will be fascinating to watch this market develop.
Integrity is dedicated to providing merchants with the latest payment processing technology, including the ability to accept contactless payments. Contact us today to learn more about our latest contactless payment-enabled technology, including the PAX S80 and Clover Mini.
- J. Jenkins. (2016, February 3). Starbucks Is Winning Mobile Payments, But Others Are Not Far Behind. The Motley Fool. http://www.fool.com/investing/general/2016/02/03/starbucks-is-winning-mobile-payments-and-its-not-e.aspx
- Javelin Strategy (2015, October 15). A Third of U.S. Retail Establishments to Accept Contactless Cards by 2019 in Second Wave of EMV. https://www.javelinstrategy.com/press-release/third-us-retail-establishments-accept-contactless-cards-2019-second-wave-emv
- Smart Card Alliance Payments Council. (2016, June). Contactless EMV Payments: Benefits for Consumers, Merchants and Issuers. (Publication Number: PC-16001) p. 4
- L. Rao. (2016, July 26). Apple Pay Now Accounts for Three-fourths of U.S. Contactless Payments. http://fortune.com/2016/07/26/apple-pay-contactless/