How to Adapt Your Business for Touchless Payments
As communities begin adapting to the new normal, consumers are once again venturing out to shop and dine in person. However, many remain wary about safety, and small businesses need to assuage those concerns by highlighting their focus on sanitation. A key part of that is accepting contactless payments -- after all, who wants to handle a grimy surface that the shopper before you just touched?
Many merchants have already escalated their use of contactless payments, and you may have some protocols in place. A survey from the National Retail Federation (NRF)1 found that 67% of retailers currently have the ability to process contactless payments, with nearly 40% saying the pandemic had accelerated their contactless plans.
If you're still tweaking your contactless protocols, you've likely realized that standards are not one size fits all. Here are answers to some common questions that can help you adapt your systems.
What are contactless or touchless payments?
Touchless or contactless payments are any payment methods where the customer does not need to touch something that others have touched at the point of sale, whether it's a touchscreen, a shared pen or stylus, a piece of paper, or cash.
Cash payments are certainly not touchless, and mobile payments typically are, but card-based payments can go either way. It really depends on what type of system you have and how you configure it.
What is Tap to Pay and is it touchless?
One system that is getting a lot of attention in the movement toward contactless payment is Tap to Pay (also known as Tap and Go). Credit cards enabled with Tap to Pay use a Near Field Communication (NFC) system that allows customers to simply tap their card on a card reader. The customer doesn't need to click through any options on a screen to complete the transaction.
As long as you have configured your point-of-sale system to avoid requiring a signature and you don't hand the customer a printed receipt, a Tap to Pay system can be truly touchless.
Can your point-of-sale (POS) system handle contactless payments?
The short answer is: It depends. And what it depends on, in part, is whether or not your system can be configured to skip over those questions that the customer has to answer by either tapping on the screen with their fingers or using a shared stylus.
Get your settings right
If you have even a “somewhat modern" POS, it likely can adapt to contactless with minor adjustments, says Matt Sherman, payments analyst at MerchantMaverick.com.2
Assuming you have the right equipment, in many cases all you have to do is enable certain settings to reconfigure the checkout screen and customer display for touchless options. For example, with most systems, you should be able to:
- Override the screens that ask shoppers to tap "Confirm" or "OK" (or answer other questions in the process of paying).
- Set the screen so that the merchant enters a tip for the customer instead of them entering themselves.
- Waive the signature requirement or set a high upper limit for signing (more on that later).
- Disable automated receipt printing and instead print it only if the customer wants it.
Your POS provider should be able to walk you through any reconfiguration.
In many cases all the merchant has to do is enable certain settings to reconfigure the checkout screen and customer display for touchless options.
Upgrade hardware or software
If you need an update to achieve any of these contactless features, you may be able to keep your registers and card reader and just upgrade your software, says Erik McNair, a retail consultant with McNair Media,3 which has expertise in helping retailers choose POS systems.
And even if you need a hardware upgrade, Sherman adds that “many small businesses might find it's far easier and cheaper than expected."
Ask your provider what they offer, and if you don't like what you're hearing, now might be the time to shop around. While it sounds painful to swap out your system, it might be imperative from a consumer standpoint, as it's possible they won't shop with you if you don't. “Customers want to know you are taking precautions seriously, and contactless payments can be a big part of that," McNair explains.
If you need to retrofit your system, consider looking for a POS system that meets your needs and also has built-in payment processing, advises Meaghan Brophy, retail and eCommerce analyst at FitSmallBusiness.4 “Having one company for everything can make it simpler than having to find compatible systems and negotiating with two different suppliers," she notes.
(The Synovus Merchant Services team can help you identify the right POS and connect you with a local sales representative who can provide training, equipment setup, and customized pricing.)
Do you need a signature?
If you've been frequenting in-person stores recently, you may have noticed that guidelines vary regarding signatures. In some places you need to sign for a purchase over a certain amount, whereas others you don't. In most cases, the merchant sets the limit and decides whether they want a signature or not.
Before disabling the signature feature, though, McNair suggests discussing the security ramifications by checking with your bank to ensure you are in compliance with any regulations they have.
But in general, Sherman recommends opting for customer comfort over getting the signature if you have the choice. “While there's a minute security risk with any type of payment, these days, customers might opt not to shop with you at all if you require a signature."
If you're unsure how to change the setting, your POS provider can help.
Do customers need to enter their PIN when using a debit card?
While credit cards don't need a PIN to complete a transaction, debit cards often still do — and in return, merchants typically pay lower transaction fees for those sales, explains Brophy. While it might be more affordable to run a debit card, you do have the option of running a debit card as a credit card transaction to avoid the need to enter a PIN. While you might pay more, the incremental fee might be worth it to put your customers at ease.
What should you know to accept mobile payments?
Digital wallets allow a customer to tap their phones to pay, rather than swiping or inserting a card. Your customer sets up the payment format on their device with their card information. (Note: All mobile wallet transactions are processed as credit card rather than debit transactions, with corresponding fees to the merchant.)
If you're offering this new payment method to customers, make it obvious to your customers with signage and stickers. While the systems are relatively intuitive, simple directions that walk your customers through the process might be appreciated in case it's their first time.
What about going cashless?
More and more customers are eschewing cash, and many businesses = prefer that; taking credit card payments is typically faster and more efficient at the point of sale and easier to process — no counting cash at the end of the day, no trips to the bank, no worries about cash being stolen. However, even if you'd prefer not to accept cash, going completely cashless is illegal in some areas, as it can discriminate against the unbanked. Make sure you know the local regulations to avoid running afoul of the law or potentially offending a customer.
What's next in contactless payments?
Wouldn't it be great for your customers to just be able to tell your system to charge their credit card? At Exxon, voice-activated capability is already here.5 “While voice-activated payment is a niche offering at the moment, we are seeing a renaissance in technology that isn't necessarily new but is becoming more widely used in business payments, like QR codes," Brophy says.
It's clear that the pandemic has accelerated digital transformation in all areas, payments included, and who knows what might be new and next? If you have questions about your own payment processing, your Synovus banker can help.
Important disclosure information
This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
- Fiona Soltes, “The New Face of Vending Machines," NRF.com. Published October 21, 2020, accessed October 27, 2020. Back
- Merchantmaverick.com, accessed November 2, 2020. Back
- Mcnairmedia.com, accessed November 2, 2020. Back
- FitSmallBusiness.com, accessed November 2, 2020. Back
- Exxon.com, “Alexa, Pay For Gas," accessed October 28, 2020. Back
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