Merchant Point of Sale Processing: Understanding Contactless Payment

Customer making a contactless payment in a modern café, highlighting the ease and speed of the transaction.

For a long time, businesses needed to use terminals that required card-swiping or insertion for card payments. Nowadays, transactions at the point of sale can be contactless, making the payment process quicker and more convenient for both merchants and customers. This contactless technology also offers financial benefits for merchants. While contactless payment is popular in some areas, it’s less known in others. Here, we simplify some common questions about contactless card readers.

How do contactless card readers work?
Contactless readers have a built-in antenna that reads information from a contactless credit card. These readers support both EMV chip cards and magnetic stripe cards. For chip cards, a PIN can verify the transaction, while for stripe cards, the card transmits information directly to the reader.

Is contactless payment becoming popular?
The popularity of contactless payments varies. Predictions about its future range widely, from becoming a significant industry to facing decline. The uncertainty is partly because credit card companies rarely share detailed usage statistics.

How fast are contactless card readers?
Contactless readers can process payments in less than a third of a second. This speed is beneficial for businesses with continuous customer flow or those that see peaks in sales, reducing transaction time by 40%.

What is the reading distance for contactless cards?
Most readers work within a four-inch range. This distance prevents incorrect card use while avoiding POS crowding.

Can readers handle both contactless and contact cards?
Many modern terminals are designed to accept both types of cards. Choosing a reader that supports both contactless and traditional card payments is currently a wise choice.

Do people spend more with contactless cards?
Research indicates that people tend to spend more using contactless cards than with cash. For example, users of American Express’s ExpressPay program at CVS spent 20% to 30% more. However, traditional credit cards still lead to the highest spending increases.

Cost of contactless card readers?
The price of contactless readers varies from under $100 to about $1,000, depending on features and model.

Choosing the right equipment for your business
The payment processing landscape is constantly changing. AVPS, with 25 years of experience in supporting small businesses and merchants, can guide you in selecting the best equipment for your needs. Contact us for expert advice.

This simplified version aims to maintain the original content’s meaning while making it easier to read and understand, keeping the language straightforward and removing any unnecessary jargon.