How to Take Your Small Business Contactless

May 11, 2019

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Contactless payment options are becoming more popular in the US — from the rise of mobile wallets to issuers releasing contactless versions of their most popular credit cards. As a result, more small businesses are making sure they can accept these types of payments.

While it can seem like a complicated process, introducing contactless payments is actually pretty simple. If you already accept credit cards, you can add the capability of accepting contactless payments with just a couple of steps.

If your small business isn’t already set up to accept credit card payments, check out our guide here.

The Advantages of Accepting Contactless Payments

Probably the most attractive advantage is speed. Contactless transactions take a fraction of the time it takes for someone to insert a chip or swipe a card. For small businesses that do hundreds of transactions every day, that saved time really adds up.

Think of it this way: The more time you save on each transaction, the more transactions you can potentially have throughout the day, the more profits you can earn each day. Plus, faster transactions can help you eliminate lines at the register. Customers will have a better buying experience, and employees could have more time to help customers or handle other aspects of the business.

Close up of businessman paying with contactless credit card with nfc technology at restaurant. Focus on man holding his credit card above the card reading machine.
(Photo by jacoblund / Getty Images)

The more payment options your business has, the more potential customers you can serve. Since mobile payments and contactless credit cards are continuing to grow in commonality, it makes sense for more small businesses to jump on board by offering a way for consumers to go contactless.

Younger generations especially are increasingly ditching cash in favor of plastic or mobile payments, and it will become imperative for businesses to meet those consumer expectations as millennials and gen Z continue to take on more economic buying power in the US.

Upgrading Your Equipment

The biggest (and most important) step in the process is outfitting your business with the necessary hardware to accept contactless payments.

Contactless payments work using near-field communication (NFC). Both contactless cards and mobile wallets use NFC to communicate payment information, generating a unique cryptogram for each transaction that is sent through radio waves. Your business will need an NFC-enabled reader to facilitate those transactions.

Depending on your current point-of-sale (POS) system, you might just need plug-in readers for your existing card readers. Many merchant accounts and all-in-one providers have contactless readers available to purchase, lease or borrow. Others will work with you to determine which third-party readers will work with your current system. Alternatively, you might decide that it would be better to upgrade to a fully integrated terminal. It’s a more complicated (and expensive) process, but an integrated system will have a more seamless user experience and upgraded capabilities.

Identify Software Needs

If you decide to upgrade your entire POS, the new system should come with the necessary software. However, those who choose to simply add NFC-enabled readers to their current set-up may need to update their software to meet contactless coding requirements and contactless chargeback rules.

(Photo by mediaphotos / Getty Images)

Make sure you’re communicating with your payment-processing provider about the requirements and rules that are associated with taking your business contactless. Also ensure that your new readers and software will accept the major payment networks — including Amex, Visa and Mastercard.

Other Things to Consider

Once you have the necessary software and equipment set up, run test transactions and train your staff to handle these types of payments. That way once you start allowing customers to use your contactless readers, your employees will have a handle on the process and initial bugs will be worked through.

Remember that secondary verification might be required for some transactions. Contactless payments are subject to CVM limits. If a single transaction is above that limit, the terminal will require card verification. Most EMV cards in the US will require a signature, but tourists from other countries may have cards that require a PIN.

Bottom Line

There are a lot of reasons to take your small business contactless this year — especially if your small business processes a lot of fast, small transactions every day. Because of CVM limits, it’s less imperative for businesses that tend to only have a few larger transactions throughout the day. However, as contactless cards and mobile wallets become more mainstream, this could easily change. It’s worth really sitting down and considering the best route for your business.

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