Every minute customers spend tapping their toes and waiting in your checkout line costs you money.
Modern customers expect more convenience and speed than ever, and that applies to every aspect of your store operations — including the point of purchase. Over half of U.S. adults prefer some form of contactless payment over other payment methods, and this preference is expected to rise.
Contactless payments process transactions two to three times faster than traditional chip cards or cash. For your business, that means serving more customers per hour, reducing staff time on payment processing, and taking your checkout process from bottleneck to profit center.
In this blog, we’ll explain what contactless payment is, how the technology works, and why implementing it might be the most profitable decision you make this year.
Contactless payment is a payment processing method that allows customers to make purchases by tapping or hovering their card, phone, or smartwatch near a payment terminal. The payment method has existed for decades, but the health and safety concerns during the 2020 pandemic made its popularity explode in recent years.
The technology behind contactless payments is surprisingly simple. Near-field communication (NFC) and radio frequency identification (RFID) transmit encrypted payment data between the customer's device and your terminal.
Related Read: What Is a Point of Sale Transaction? A Quick Guide for Retailers
There are three common contactless payment methods:
With this foundation in mind, let’s explore why contactless payments are so crucial for modern businesses.
One of the main advantages of contactless payment is speed. This payment method is convenient and quick, allowing customers to move through your lines more quickly. A few seconds saved at the point of purchase might not seem like much, but the hidden costs add up fast.
Customers are more likely to abandon purchases and walk out empty-handed when faced with long lines. These lines and bottlenecks might also result in you paying employees to stay overtime during a rush period while things back up.
Additionally, cash management isn't free. If you’re accepting a majority of cash transactions, you're dealing with bank runs, deposit fees, and the time spent counting and securing cash at the end of each shift. Then there's theft and human error. Cash handling opens the door to both internal and external losses that eat directly into your profits.
Finally, you need to consider the customer experience. Check online reviews for any retail business and you'll find complaints about long wait times. Those poor reviews push potential customers toward competitors who've invested in faster checkout systems.
Slow checkout is frustrating for customers and costs you real money every day. Investing in a payment system upgrade might seem expensive at first glance, but it’ll more than pay for itself in savings and customer loyalty in the long run.
We’ve discussed how slow checkout kills your profits. Now, let’s connect some dots and cover how contactless payments solve these problems and set your store up for long-term success.
Contactless payments process two to three times faster than chip cards or cash transactions. That speed means you can serve significantly more customers during peak hours without hiring additional staff. If your average transaction currently takes 90 seconds and you process 200 transactions daily, switching to contactless payments frees up 200 minutes of checkout time. That's over three hours.
Going contactless also eliminates cash counting errors and drawer discrepancies, which can cost you money. You'll reduce theft risk from employees and external sources, and save valuable time on end-of-day reconciliation processes.
When you’re using a contactless payment method, your staff won’t have to worry about PIN entry, signature collection, or any of the other payment mechanics that hold up the line. These payment methods also automate transaction recording, eliminating manual entry errors that can skew your books.
Overall, switching to contactless payments in your store makes checkout smoother, store operations easier, and point of sale (POS) data more reliable.
One concern some people express about contactless payments is related to security. The good news is that contactless payments are actually more secure than traditional magnetic stripe cards. Old-style card swiping made it easy for fraudsters to steal and clone customer information. Contactless technology is far less vulnerable.
Related Read: What Is POS Security? 5 Ways To Protect Customer Data
Here's how contactless payments protect your business and your customers:
Contactless payments also simplify PCI DSS compliance for your business. When you accept contactless payments, less sensitive cardholder data touches your systems directly. That means fewer security requirements to manage.
No two retail businesses are the same — especially when considering retailers across different industry verticals. The ideal contactless payment system should be tailored to meet your store’s specific needs. Let’s take a look at how contactless payments benefit stores in different retail sectors.
Speed is everything during rush periods. When the morning coffee or lunch rush begins, contactless payments help eliminate checkout bottlenecks that cost you sales. You'll serve 30– 40% more customers per hour without needing to add extra registers or hire additional staff.
Related Read: 5 Convenience Store Trends To Help You Thrive
Selling age-restricted products means you can't sacrifice compliance for speed. The right POS system enables you to integrate contactless payment processes with built-in age verification systems, allowing you to verify IDs and process payments in a seamless workflow. Every transaction record includes compliance tracking, giving you audit-ready documentation without the extra steps.
The right point of sale system offers contactless payment processing that works with variable weight selling, customer loyalty programs, and advanced inventory management. Retailers in the grocery and market industry often have larger basket sizes, meaning a speedy checkout process is especially important.
Running multiple stores requires consistency and visibility. Contactless payments provide a seamless experience at every location, while also offering centralized reporting and inventory management. Invest in a POS system that allows contactless payments but also lets you monitor transactions remotely, compare performance across stores, and make smart decisions based on data from all your locations.
If you want to enjoy the benefits we’ve talked about in this article, you know you need a contactless payment system — but it’s important to remember that not all point of sale solutions are created equal.
Here's what you need in a contactless-enabled POS tool:
You also want to select a system that has transparent pricing and fees, so you can avoid hidden charges and surprise costs down the road. The best tools also provide top-tier technical support and software updates, helping you keep your system up and running in the long term.
So, back to the question: What is contactless payment? Simply put, it’s a proven way to increase your revenue, reduce your costs, and keep customers happy. Faster checkout means more transactions, and more transactions mean more money.
To stay competitive in the modern retail marketplace, you need to offer contactless payment options.
POS Nation recommends solutions with contactless payment integration across all hardware, specifically designed for small and medium-sized retailers like yours. If you sell age-restricted products, these tools have built-in age verification to keep you compliant without slowing down your checkout process. And for those running multiple locations, centralized management gives you visibility and control across every store.
Schedule a free demo with POS Nation today to see how contactless payments can transform your checkout process and boost your bottom line.