More than a gimmick

Contactless payments: never heard of it? Or maybe you're already a seasoned pro? We'll tell you what it is, what it can do, and how secure it is.

What's it all about?

The technology is the same as you're no doubt familiar with from other applications: you hold a card, a mobile phone, a watch, a key fob, etc. up to a device and data are transferred – and, in a flash, access is granted, a charge is debited, a subscription is checked, and so on. Contactless payments work in exactly the same way. Customers hold their payment card a few centimeters from the payment terminal and, within a few seconds, the payment is made – usually confirmed by an optical and acoustic signal. What is more, when dealing with small amounts, the payment does not have to be confirmed by PIN or signature. The contactless function is therefore especially suited to points of sale which experience high levels of traffic and where the transaction amounts involved are relatively low.

How secure is it?

Just hold up your card and the payment is made: can that really be secure? Yes, it can. In fact, it is just as secure as regular card payments. The data traffic between the terminal and the card is encrypted before it is processed and is subject to the international EMV security standard. New dynamic security values are computed for each transaction, preventing fraudsters from copying the card and using it at a later date. In addition, no data relating to the person are saved on the chip (name of cardholder, etc.). This means that "tapping into" the data traffic is of no benefit whatsoever. Indeed, authorization and data processing at the payment terminal are just as reliable and fast as they have always been.

What are the benefits for you?

Contactless payments are a win-win for everyone involved: not only are they quick and practical, they also promote sales and have future potential. Customers pay twice as fast on average "contactlessly" than they do with their card, since for small amounts they no longer have to enter their PIN or sign their name. It's a lot faster than paying in cash, too – no need to rummage for money in your purse or pockets and wait for the cashier to hand you back your change. This dramatically speeds up checkout queues, creating a more pleasant shopping experience for everybody.

The speed and convenience of cashless payments also have a positive impact on sales, especially in the case of smaller purchases.

Last but not least, it is a solution fit for the future: before long, many customers will also be able to make contactless payments at points of sale using their NFC-compatible smartphones. Eventually, customers will be able to leave their wallets at home entirely, as they will be able to load not only cash, but also promotions, loyalty points, vouchers etc. onto their smartphones in real time.

How can you play your part in its success?

Contactless payments are gaining in popularity across the globe. But success hinges on whether customers can enjoy the convenience of paying without cash everywhere they shop, or only in individual stores. In other words, the more merchants that allow and promote cashless payments, the more everyone stands to gain.

What you can do: first of all, you need a payment terminal equipped with the appropriate technology. Since summer 2014 SIX has only been offering payments terminals featuring the contactless function. It is also important that all checkout personnel receive adequate training and that customers know they have the option of paying using this method. This will mean they have more confidence in using the service – and queues will gradually become shorter and shorter....