Should your business be accepting contactless payments?

If you’ve been thinking about going contactless, but haven’t quite got around to it, now’s the time. Here’s all the info you need to decide if it’s the right move for your business.

4-minute read

New Zealanders are amongst the highest users of contactless payments in the world with 57% of face-to-face Visa transactions being made using Visa payWave¹. These consumers want choices on how to pay for each transaction, and their main drivers are that contactless payments (Visa payWave / PayPass) are convenient and save them time. 

According to a 2016 survey commissioned by Visa, nearly half of New Zealand’s population (46%) believe cash will be replaced in the near to medium term². Furthermore, almost two-thirds (65%) of Kiwis say they’re likely to try out new ways of paying for goods and services. The number of people willing to use an internet connected device, such as a car or fridge, to make payments is growing; from 12% in September 2016 to 30% in May 2017³.

We expect these trends to continue, so if you’ve been thinking about going contactless, but haven’t quite got around to it, now is definitely the time. Here’s all the info you need to decide if it’s the right move for your business.

The business case for going contactless

Speed – You could save time on every transaction, which reduces queuing times for your customers and means you’re able to accept more payments per hour – a win-win.
Mobile payments – It’s not just cards that offer contactless technology – mobile phones can too, so future-proof your business now before the next emerging payment technology really kicks off.
Minimise cash handling - Imagine a world where you didn’t have to cash up at the end of the day and reconcile the books.
Security – The technology for contactless payments is just as secure as a regular credit or debit card payment, and the card or mobile device remains in the customers’ hands the entire time. The card number is not visible by eye to the merchant and is tokenised throughout the payment journey meaning the card number stays hidden throughout. EFTPOS terminals New Zealand have passed stringent global standards that confirm they protect the card information while processing the transaction.
No chargebacks – You won’t be charged back for an unauthorised contactless transaction under $80. As a retailer, even though the consumer has not signed or entered their PIN, you are guaranteed payment for contactless payments below the $80 threshold providing you follow the programme rules.

How it works

Accepting contactless payments means your customers will simply hold their card or phone to a contactless-enabled terminal to complete their transaction, processing the payment in seconds.

Despite the common misconception, you can accept contactless payments over $80 – it will just require the customer to put in their PIN to authorise the payment. An easy way to remember this is: Under $80 is tap-and-go, over $80 is tap-and-PIN. And going forward, some mobile devices won’t require a PIN over $80 either - they will recognise the customer’s biometric ID, such as their finger print, making the transaction even simpler for you and your customer.

It’s easy to let your customers know you accept contactless payments: just display the universal symbol on your terminal. Some terminals will already display the symbol on the screen.

The cost of going contactless

There are costs associated with going contactless – this could be a percentage of the transaction, or a set fee per transaction. It’s worth noting that debit transactions, which are free via a standard chip and PIN system, will incur merchant service fees via contactless.

Many Kiwi business owners have concluded that the benefits of contactless payments for their customers and business outweigh the cost of investing in the service. You can serve more customers faster, which means you can increase your revenue simply by updating your terminal.

But cash is still king, right?

Kiwi consumers don’t think so. New Zealand has world-topping card payment use. A recent report found a staggering 90% of Kiwi customers use cards as their main payment method. The costs associated with cash are often overlooked by businesses. Working mainly with cash may appear relatively inexpensive, but business owners should also take into account the time spent handling and counting cash, and transporting cash to the bank. You may be paying higher premiums for insurances, and there is the very real risk of theft or loss.

If you’re not sure which way to go, we recommend talking to us to fully understand the costs involved, and discuss, based on your current footfall, whether there could be savings to your business by switching to contactless payments.