Contactless payment information for small retailers

A lot of payment provider companies are looking to contactless payments as the next big thing in retail. The next 18 months will see a significant uptake in contactless payment across the UK with the big banks starting to put the momentum behind contactless payment technology.

Instead of inserting their card in a slot and typing a pin number, all the customer needs to do is wave their card over the terminal. THe RFID device in the contactless payment card will then be detected by the contactless payment device, and from then on the transaction is processed by the banks like any other card transaction.

The key issue is the transaction value. Contactless payment is devised for small transaction - less than £20. If your average transaction is much higher than this, then contactless payment is probably not for your retail business.

However, in some sectors, it will transform payment, and reduce cash transactions. If I am just buying a sandwich, as a customer I'll pay cash because I find it quickest and easiest. However, If I just had to wave my contactless payment card over a terminal, I'd find that quite attractive.

This is one of the big boons of contactless payment. Because the customer is not actually parting with physical cash, their purchasing choices will not be dictated by how much cash they happen to be holding - this will naturally need to customers making larger purchases than they normally would.

Existing chip and pin cards do not work with contactless payment devices - customers will need a special new contactless payment card issued by their bank, or purchase a pre-paid contactless payment card.

As a small retailer the most important thing to think about are the transaction charges. Look very carefully at any contract. A lot of small transaction charges multiplied over a large number of contactless payments will add up and could be a nasty surprise! <

If you are a small retailer with a lot of low value transaction, you need to start talking to your EPOS solution provider now. Most EPOS software will not integrate with the new contactless payment devices, so the EPOS software house will have to do some work to make it work, and you really want them to be thinking about this sooner rather than later. The sooner than EPOS solution providers start offering integrated contactless payment, the more quick the uptake will be.

As a final comment, don't expect these systems to be perfect straight out of the box. It took years for chip and pin solutions to reach the current level of reliability, so expect similar with contactless payments.