How Retail Businesses Are Adapting To The Contactless Payments

Contactless payments are nothing new, but there’s little doubt that their usage has increased significantly in recent years. Due to growing consumer adoption and, to a lesser extent, the impact of the coronavirus pandemic, retail businesses of all sizes have — or are in the process of — incorporating contactless payment technology into their stores.

The adaptation of the consumer’s checkout experience has been driven in part by the businesses themselves, who benefit significantly from the availability of such an efficient payment method, and by changing consumer expectations. In an age when fewer people in the UK are carrying cash, contactless payment technology ultimately benefits everyone.

The process of moving towards contactless payments has required significant effort from retail businesses. Let’s take a closer look at how they’re shifting towards cash-free payments and why.

Updating Payment Technology

The underlying process of transferring money from the consumer’s bank account to the retail store’s remains the same regardless of how the card payment is made. But how it does it can vary. Under the old chip-and-pin method, shoppers would insert their cards into a readable machine and enter their pins. In the contactless payment era, shoppers simply need to hover their cards over the reader.

Devices must come equipped with contactless technology to take contactless payments. Happily, such machines are highly affordable and easy to integrate into existing payment systems. In many cases, it’s as simple as switching out the old chip-and-pin machines with the new devices.

Enhancing the Customer Experience

Enabling contactless payments benefits both customers and the business. Businesses striving to offer the best possible experience to their customers were some of the earliest adopters of contactless payment technology.

Even businesses that did not see the broad business benefits of accepting contactless payments have done so. For better or worse, modern shoppers are more demanding and have higher expectations than they did in the past — they expect to be able to checkout as quickly as possible. Offering contactless payments moves businesses with the times, ensuring that they’re able to meet the modern shopper’s high standards. The business benefits from this, too. After all, what’s good for the customer is usually good for the bottom line.

Navigating Varied Customer Expectations

Contactless payments are a modern, effective solution that all businesses should consider offering their customers. However, before doing so, businesses must analyse the expectations and wishes of their overall customer base to ensure that everyone’s needs are being met.

Understanding the customer is key for businesses wishing to incorporate contactless payments. In some cases, the standard customer will only ever pay via contactless payment — it’s this trend that has led some 46%of small business owners to only accept contactless payments, with no cash option available.

But that won’t always work. Some customers, especially those in the older demographic, still pay by cash. Finding the balance between cash/contactless payments is key to ensuring businesses can offer the preferred experience to all of their customers.

Customer Insights

Contactless technology allows businesses to boost customer engagement and loyalty. Many contactless payment machines can be integrated with loyalty programmes, allowing for a connection between payment and the customer’s spending habits. Machines that can read contactless smart cards that are linked to an individual customer can help to drive data-driven customer insights that can shape strategic decisions.

The customer benefits from this, too. For instance, it allows customers to build points, which can then be redeemed in-store, as well as to receive precise marketing for goods and services they’re likely to be interested in.

Impulse Spending Options

Studies have shown that customers spend more when making contactless payments. As a result, many businesses have reimagined the “impulse buy” section of their stores. In the cash-is-king era, stores would place low-value goods, such as snacks and sweets, near the checkout counter. Today, they’re more likely to place higher-value items in those coveted positions. The store doesn’t even have to work all that hard to make those sales. When using contactless payment options, customers convince themselves to make those additional payments.

Contactless Payments: The Present and The Future

Contactless payments aren’t going away anytime soon. Quite the opposite, in fact — with more and more businesses phasing out cash payments, they’re likely to become the overwhelming payment method in the UK and beyond. This move benefits customers, who enjoy a smoother checkout experience, and businesses, which make it as easy as possible for customers to make payments their preferred way. If you still haven’t updated your payment machines to accept contactless payments, then now’s the time.