Merchant Point of Sale Processing: Understanding Contactless Payment

For years, accepting card payment required a merchant to use card-swiping or card insertion terminals. But today, point of sale transactions can be contactless. Processing equipment for contactless credit cards can streamline the payment process for merchants and customers alike, and benefit merchants financially. Contactless payment is well known in some places, and almost unknown in others. Below, we answer questions asked of credit card merchant services about contactless card readers.

How do contactless card readers work?

Contactless card readers contain an embedded antenna device that reads the information encoded in a contactless credit card. The readers work with EMV chip-based cards, or cards with magnetic strips. In the first case, PIN entry can verify the transaction. In the second case, a device in the card transmits the information from its magnetic stripe to the reader.

I’ve heard that contactless payment isn’t catching on. Is this true?

The future of contactless payment depends on whom you ask. Some experts predict it will be an $8.5 billion dollar industry by 2014, while others predict its decline. The greatest barrier to predicting its success or failure is credit card companies seldom release precise figures on contactless card users.

What is the processing time for a contactless card reader?

Today’s contactless card readers can process payment in one-third of a second, or less. For businesses that have a steady stream of customers, or businesses that experience intervals of heavy sales, contactless card processing is helpful for expediting merchant point of sale processing. Studies show that contactless payment can reduce overall transaction time by 40%.

At what distance do contactless card readers read cards?

Different readers have different reading distances, but a distance of up to four inches is standard. This distance is close enough to keep the wrong card from being used, but distant enough to prevent crowding of the POS.

Are there readers that accept both contactless and contact cards?

Several credit terminals are designed to accept both contactless and contact credit cards. At the present time, buying a contactless reader that also accepts traditional cards is the best idea.

Do customers spend more when they use contactless credit cards?

Studies have shown that consumers spend more when using no-contact credit cards. American Express reported that users of its ExpressPay pilot program with CVS spent 20% to 30% more than they did with cash. However, consumers have been shown to spend even more when using traditional credit cards.

How much do contactless card readers cost compared to other readers?

Depending on their make and model, contactless card readers range from under $100 to roughly $1,000. How much you pay for a card reader depends on the features your business wants and needs in a reader.

AVPS can help you choose the right equipment for your business

Merchant point of sale processing is continually evolving, and the experts at AVPS can help you decide what equipment options are right for your business. With 25 years of experience in Small Business Merchant Accounts, and 25 years of experience servicing merchants, we have the experience you need. Call us today. 

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