How to make contact with the idea of contactless? How to bring the mobile wallet to the U.S. in a way that makes a splash at a level seen elsewhere across the globe, especially in Europe?
Confusion reigns, for one thing. In an interview with PYMNTS’ Karen Webster, Andrew Wind, principal product manager at Worldpay, said that beyond implementation, there’s confusion as to whether contactless payments are considered a part of “card-present” or “card-not-present” transactions.
Nomenclature aside, “It’s not a new payment type or alternative network,” he told Webster. “Instead, it’s a form factor, which uses RFID (radio frequency identification) or NFC (near-field communication) to pass payment information from a device to a terminal in order to establish payment.”
Contactless is, in fact, a card-present transaction when a cardholder interacts with a specific terminal. But that is not to be confused with payments made through mobile wallets, which are considered card-not-present transactions.
That distinction is something that may cause merchants angst, confusion or plain uneasiness because of the differentiation and the costs of acceptance.
And acceptance is the key concept here. Some use cases abound with successful uptake. One of the best examples of contactless payments utility is mass transit. Wind considers this high-volume segment to be the “Uber use case of contactless.”
“We’ve seen a lot of successful implementations with transit where it’s very high throughput [and] very low ticket,” Wind added.
Contactless payments at unattended terminals represent a digital alternative to using crumpled-up dollar bills.
But beyond getting consumers where they want to go — literally — with speed and ease, merchants and technology manufacturers can bring new payment technologies to consumers before consumers even know they’re useful.
“Sometimes it’s not customers coming out and explicitly saying it, but it’s using your imagination for payments to help improve the retail experience for the customer,” Wind said. “I think contactless as an item in that repertoire is an important factor. Wearables, such as smartwatches, remain an example here and can conceivably be used to make payments.”
In practice, contactless technology has the potential to shape retail environments and allow customers to make purchases throughout the store. One initial tell on how retail — tactile, in-store purchases — can be reshaped comes from none other than Apple. At the Apple Store, for example, customers do not walk up to a checkout counter to purchase the latest iPhone or iPad: An associate or team member walks up to the customer to facilitate his or her checkout experience.
Writ a bit larger, to help get consumers used to the idea of contactless payments, merchants can implement contactless technology in a number of different ways — beyond as a means to check out — such as allowing customers to check in to a retailer. That application, for example, could allow retailers to customize the store experience for the consumer.
“That builds more comfort and familiarity for … consumers and will lead to better experiences [and] higher adoption of these contactless tools ultimately for payments as well,” Wind said.
“It’s the whole notion that the old cash box — or the till — is now moving from what would have been sitting on a countertop into various parts of the store, providing consumers more opportunities to check in and check out with reduced friction,” Wind said. “And with that, utilizing things like contactless in order to accomplish that seamless experience becomes an important factor.”