Contactless payments have rapidly become the go-to way for customers to pay. Whether it’s a card, a smartphone, or even a smartwatch, people now expect to simply tap and go. For businesses, adapting to this shift means faster checkouts, happier customers, and less time spent handling cash.
What are contactless payments?
Contactless payments use near-field communication (NFC) technology to let customers pay by holding their card or device close to a compatible terminal. Instead of inserting or swiping, the transaction is completed wirelessly in a matter of seconds.
The system relies on EMV chip and NFC standards, which encrypt data and ensure every transaction is securely authorised. Once a customer taps, the terminal and their card or device communicate directly, confirming the payment almost instantly.
This technology isn’t just a trend but a global movement. Analysts project the total value of contactless payments will exceed USD 140 billion by 2029, while the market for NFC-enabled terminals is expected to triple to around USD 43.4 billion by 2026.
How contactless payments work
Here’s what happens during a typical tap-to-pay transaction:
- The customer holds their card, phone, or wearable device near the terminal.
- The terminal picks up the NFC signal and retrieves the encrypted payment data.
- The information is securely sent through the card network for authorisation.
- The customer’s bank checks and approves the transaction in real time.
To get started, you’ll need:
- A contactless-enabled POS terminal or reader
- A merchant account with a payment processor
- Payment software that supports NFC transactions
Contactless methods include tap-enabled debit and credit cards, mobile wallets, and smart wearables—all of which work seamlessly with modern payment systems.
Types of contactless payments
Customers today want flexibility in how they pay. The more options you offer, the easier it is to make a sale, no matter where your customers come from or how they choose to pay.
Contactless cards
Most debit and credit cards issued by major networks—like Visa PayWave, Mastercard PayPass, and American Express Contactless—come with built-in NFC chips. These allow quick “tap and go” payments that don’t usually require a PIN for smaller transactions. For higher amounts, a PIN or verification may be needed.
Mobile wallets
Digital wallets allow customers to store card details securely on their phones. Payments are verified through biometric authentication like a fingerprint or facial scan, adding an extra level of protection.
For merchants, mobile wallets speed up transactions and reduce declines, as authentication happens instantly on the customer’s device. Most modern POS terminals already support these wallets without any extra configuration.
Wearable devices
Smartwatches and fitness trackers like Apple Watch, Garmin Pay, and Fitbit Pay make it possible to pay without reaching for a wallet or phone. These are especially popular for quick purchases in cafés, public transport, and retail shops. If your terminal supports NFC, no additional hardware is needed.
QR code payments
QR-based payments allow customers to scan a code with their phone to pay directly. They’re especially common in Asia through platforms such as Alipay and GCash, and are increasingly used worldwide. For small merchants, this method offers a low-cost, simple way to accept cashless payments without investing in specialised terminals.
Tap-to-phone (SoftPOS)
Tap-to-phone, also called SoftPOS, turns a smartphone into a payment terminal. Merchants can accept card payments directly on their device without needing a separate reader. Solutions like Tap to Pay on Android or iPhone make it ideal for small businesses, delivery services, and market traders.
Why accept contactless payments
Accepting contactless payments makes your business more efficient, secure, and aligned with modern customer expectations.
Faster service and better customer experience
Transactions take seconds, keeping queues short and reducing frustration—especially in busy environments like cafés, restaurants, and retail shops. A faster checkout often leads to happier customers who are more likely to return.
Meeting customer expectations
Digital payments are now mainstream. Research shows 71% of shoppers prefer contactless options, and among Gen Z and Millennials, 9 out of 10 have used contactless payments recently. Retailers offering tap-to-pay options report that customers are up to 45% more likely to come back—proof that convenience builds loyalty.
Reduced cash handling and better security
Going contactless also saves time behind the scenes. Fewer cash transactions mean less time counting tills or making bank runs. Each tap uses encrypted, tokenised data, which prevents sensitive card information from being stored or shared—reducing the risk of fraud.
How to set up contactless payments
Getting started is straightforward. Here’s a step-by-step guide:
- Check your terminal – Look for the contactless symbol on your current POS device. If it’s there, it likely supports NFC. Otherwise, confirm with your payment provider.
- Activate contactless functionality – Contact your payment processor to enable tap-to-pay features and verify any setup costs or requirements.
- Upgrade if needed – If your system doesn’t support NFC, consider upgrading to a contactless terminal or use a certified mobile reader. Small businesses can use tap-to-phone solutions as a more affordable option.
- Ensure secure connections – Keep your terminals connected to a private, encrypted network and make sure your setup complies with PCI DSS security standards.
- Run test payments – Before going live, process test transactions using cards, phones, and wearables to make sure everything works smoothly.
- Train your staff – Your team should know how to handle common issues, explain the process to customers, and resolve failed taps quickly.
- Inform customers – Display signs showing you accept contactless payments. Simple stickers or posters near the till can make a difference. For online stores, mention digital wallet options at checkout.
- Review regularly – After setup, monitor transaction trends and ask for customer feedback. Work with your provider to fine-tune performance if needed.
Best practices for smooth contactless transactions
Once your system is running, consistency and reliability are key. Here’s how to keep things running efficiently:
- Keep your checkout organised: Position your terminal so customers can easily reach it. Avoid tangled cables or clutter that slows things down.
- Update software regularly: Always keep your POS system up to date with the latest software and security patches.
- Use secure connections: Operate only on encrypted Wi-Fi or wired connections. Avoid public networks for payment processing.
- Maintain cleanliness and visibility: Wipe terminals regularly and make sure the NFC logo is clearly visible to avoid confusion.
- Prepare for troubleshooting: Train staff to handle situations where a card or phone doesn’t tap properly. Often, a quick retry or manual entry can solve the issue.
- Promote contactless availability: Let customers know you offer tap-to-pay—on receipts, menus, websites, or social media.
- Track performance: Keep an eye on transaction approval rates and speed. Report recurring issues to your provider promptly.
Conclusion
Adopting contactless payments is essential for staying relevant in today’s business environment. Whether you use NFC-enabled cards, mobile wallets, or tap-to-phone technology, offering contactless options helps you deliver faster service, improve security, and meet customer expectations. As payment habits continue to evolve, businesses that embrace these tools will be better positioned to thrive in the digital-first economy.
