Contactless Payments: How They Work, How Your Business Can Accept Them – NerdWallet

Contactless payments — which are tap-and-go transactions made with mobile wallets and contactless cards — have recently shot up in popularity. More than half of Americans reported using some form of contactless requital, according to a 2020 Mastercard poll. In 2016, only about 3 % of credit cards were equipped with contactless technology, according to a 2018 study from the consulting firm A.T. Kearney ; now, most major credit circuit board companies issue cards with tap-and-go capabilities.

The COVID-19 pandemic besides increased consumer demand for contactless payments. In early 2020, when scientists were still learning about how the virus was spreading, the World Health Organization recommended using contactless payments to reduce the probability of transmission through handling currency and credit or debit cards. Though it was late determined that airborne infection was by army for the liberation of rwanda the larger terror, the transfer in requital methods had taken hold. More than half of tap-and-go payment users say they plan to stay contactless, according to a 2021 Visa study. Contactless payments work the same way chip cards do at point-of-sale systems, by sending a unique erstwhile token to the payment terminal. The keepsake can entirely be used to make that buy, adding a layer of security to the transaction. In general, chip menu readers besides use near-field communication, or NFC, which is a subset of radio-frequency recognition technology. If you have a menu reader for chip cards, you can likely use it to accept contactless payments, excessively.

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Tap-and-go cards

For contactless payments to work, the requital end needs to be NFC-enabled. If both the circuit board and the lector have contactless technology built in — which is indicated on cards and terminals by an icon with four crook lines, the contactless symbol — the poster needs to be held within a few inches of the reader for the transaction to go through. ( “ Tap ” is a bit of a misnomer ; the card and proofreader preceptor ’ metric ton actually need to touch ) . Contactless symbol. Samsung Pay used magnetic procure transmission, or MST, to allow contactless payments, even on old circuit board readers that could n’t receive other forms of contactless payments. however, Samsung is phasing out MST technology and switching to NFC.

Mobile devices

Mobile devices use the lapp NFC engineering to march payments. Customers can add a credit card to a digital wallet like Apple Pay, Samsung Pay or Google Pay. then, when they hold their earphone near the poster reviewer, it will prompt them to confirm their leverage. Digital wallets normally require facial recognition or a passcode to complete the transaction, which can take a act longer than tap-and-go cards. There are a distribute of benefits to accepting contactless payments at your business. here are a few :


Contactless payments have become platitude over the final two years, in big part due to hygiene concerns. Having a POS organization that allows for no-contact order and payments helps keep employees and customers socially distant and can reduce the spread of germs.


Since they work with a erstwhile token, mobile payments and tap-and-go card transactions can be processed without storing sensitive information, like names, calling card numbers and security codes.


Going contactless can make your daily operations much more efficient. For restaurants, using a QR code and online ordering arrangement lets customers order on their own prison term and send their choices directly to the kitchen, which can help prevent miscommunications.

Contactless payments besides process faster than swipe or chip menu transactions. And they ’ re much less likely to malfunction than magstripes, which can take respective frustrating swipes to work, and which deteriorate from use over time.


For restaurants and retail stores alike, the growing popularity of contactless payments means that customers often expect to pay with their phones or the solicit of a poster. As more POS systems shift their hardware and software toward contactless capabilities, along with most U.S. banks issuing tap-and-go cards ( some even without a magstripe ), contactless payments are becoming standard. Shifting to accept contactless payments helps ensure that your business stays relevant and commodious for your customers. many POS card readers and terminals have built-in NFC engineering so customers can tap their cards or smartphones to pay. These card readers and terminals enable you to accept in-person tap-and-pay cards, digital wallet payments and more. Some examples :

Square Contactless and Chip reader

Square Reader for contactless and chip


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on Square ‘s web site

monetary value : $ 49 for reader and $ 29 for optional dock. Square ’ s contactless and chip card proofreader accepts chip- and NFC-enabled credit cards, but it does not process magstripe payments. The subscriber can besides take digital wallet and smartphone app payments, including Apple Pay, Google Pay and Samsung Pay, and it connects to the Square mobile app via Bluetooth.

Clover Go



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on Clover ‘s web site

price : $ 99 for proofreader. Clover ’ s menu reviewer processes every type of credit card requital : magstripe cards, chip cards and contactless payments. It besides connects to Clover ‘s mobile app via Bluetooth, and can sync with early Clover devices.

PayPal Zettle

price : $ 79 for reader ; new customers can get their first one for $ 29. PayPal ’ s Zettle accepts chip and contactless payments, but it doesn ’ metric ton read magstripes. It does, however, let customers pay with QR codes on PayPal and Venmo platforms, and has a PIN slog for debit card transactions. While contactless payments generally refer to tap-and-go transactions, there are many more ways to make in-person payments touch-free. here are some others :

QR codes and online ordering

Some restaurants have implemented QR codes into their order and payment process. Having a scannable code at each mesa can make the dine have much more effective, connecting customers to a digital menu or a arrant mobile order and payment platform.

This method significantly reduces the sum of liaison between employees and customers — a well as potential misunderstandings.

Peer-to-peer payment apps

Peer-to-peer payment apps like Venmo and PayPal are built for contactless payments. If your business uses one of these services, customers can find your report with your username or by scanning a QR code .

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