A guide to setting up contactless payments
In September 2015, the upper limit for contactless payments was officially raised to £30. Many entrepreneurs and small business owners might not even have registered this seemingly minor event, but we believe it could represent a significant moment in the evolution of payments.
SMEs need to look to it as an opportunity to differentiate themselves against competition, and provide a seamless experience that keeps their customers coming back time after time.
Fast, simple, secure
It’s fair to say that the contactless payments revolution is already in full swing; more than £2.5bn was spent in the first half of 2015 alone, with more than 69 million such cards in circulation, according to the Cards Association. However, while contactless payments have been around for several years, it is only in the past few that it has become mainstream, and something that all businesses – large or small – need to think about adopting.
The underlying technology involves a tiny antenna which is placed inside the consumer’s credit, debit or charge card, mobile device, key fob or wearable. When it is placed against the contact terminal, the relevant data is sent between the two and the terminal contacts the issuing bank to OK the transaction. It’s fast, simple and highly intuitive – exactly what today’s time poor consumers demand.
What’s more, it’s built on the same industry standard encryption technology as Chip and PIN, giving business owners added reassurance that it’s extremely difficult to hack. In fact, the UK Cards Association claims that contactless card fraud is incredibly low at less than one penny for every £100 spent.
Already big high street names, including Pret a Manger, Wetherspoons, and Boots, have signed up. Transport providers like TfL and Stagecoach are also supporting contactless, which will help increase user familiarity with the standard. SMEs need to ensure they are keeping pace, or risk customers being lured away to the larger chain establishments.
The next push
So what exactly are the benefits for SMEs of doing adopting contactless payments? Why should they care? For those that think contactless is only relevant to larger retailers, think again.
The rise in spend limit via contactless card from £20 to £30 shows how much customers value convenience. Being able to literally ‘tap and go’ is a major selling point for shoppers, hence the rise, For SMEs, with a high volume of low spend, maximising every interaction to meet tight profit margins and drive growth, contactless offers another route to success. Simply put, contactless means being able to serve customers faster and cut down queues. Using contactless means you’ll never miss a sale during peak times.
Thinking about adopting contactless, read our guide on the things you need to consider to get the most out of the technology:
- First, sit down and work out if contactless is for you. If your business takes payments under £30 in value, and you’re struggling to keep queues down during peak times, the answer is yes.
- Think about how to make it as simple to use as possible, for you and the customer. Have as few steps to pay as possible, so your customer doesn’t have to wait too long before they can tap their card to pay.
- Check if your terminal can already take contactless. If it can, then all you need to do to get started is contact your payments provider and get enabled. But if your card machine is a bit older then it might not be capable of taking contactless payments, and you’ll need to swap it for a newer one that can.
- Check your terminal supports the latest technical specifications for High Value NFC. A payments provider like Worldpay can manage all the compliance and specification needs for your business.
- Promote contactless at the till. Card machine wraparound advertising has been effective for many UK retailers, but small businesses could consider other counter signage and in-store ads too. The UK Cards Association has some great advice on how to promote contactless.
- Train your employees. They need to understand the basics of contactless; the maximum value that can be used, security features and so on. Your employees will play a vital role in telling your card-carrying customers they can also pay with contactless so they need to be positive about this option. Don’t underestimate the benefit of working with an experienced payments provider. They’ll be able to guide you through the whole process.
Ultimately, contactless is all about offering your customers the choice to pay the way they want to. It provides a convenience that can only improve the purchasing experience to drive revenue and customer retention.
Are you an existing Worldpay customer? Refer a friend and get a £100 Amazon voucher