What the Evolution of Contactless Payments Means for You
The pandemic expedited the adoption of low- and no-contact payment methods, and they're here to stay.
Some people go shopping for the shopping "experience." But for those of us who shop as little as humanly possible — and as quickly as possible — technology is making it increasingly easier for us to remove "shopping" from the equation and get right to the point: buying.
A world where you can walk into a store, pick up your items and walk out without any contact with a human being or a terminal has already arrived. If you live in Seattle, New York or San Francisco, you've likely seen Amazon Go convenience and grocery stores that have completely removed the need for cashiers or checkout terminals. There are no self-checkout terminals either, which as we all know, still require a cashier 85% of the time.
Whether that image conjures up thrill, skepticism or fear in the hearts of consumers, the fact is that it's already happening — and fast.
What is the difference between contactless and contact-free?
If you've used Apple Pay or other tap-to-pay payment methods, you may wonder how it's possible to remove any more contact from the process. Many people carry credit or debit cards, phone applications or a smartwatch that allows them to tap instead of inserting or swiping a card. The reason this exchange isn't technically "contact-free" is that the user often still has to interact with the terminal by entering a PIN, signature or other verification method determined by the bank, processor provider or network terminals.
What makes a purchasing experience "contact-free" is the removal of that interaction with a point-of-sale terminal. The Amazon Go stores are one example of a contact-free environment, but it's not just retailers that are taking on this new system. Restaurants, partially motivated by the pandemic, have created ways for patrons to eat out without ever having to interact with a person. You can make a reservation online, place your order from your phone, earn restaurant rewards and pay (and tip) without depending on waitstaff. Those who prefer a personal touch to their dining experience might cringe at the thought, but this technological future may make it possible for the thousands of restaurants currently displaying "Help Wanted" signs to survive.
What's the most secure way to authenticate your payment?
The idea of stores scanning your face when you enter to confirm your identity makes many people more than a little nervous, but when you think about it, which method keeps your money more secure?
Debit cards, credit cards or cash payments are actually the least secure ways to spend money — there's no way to truly ensure the money actually belongs to the person using it. Signatures can be forged, and PINs can be stolen.
Many of us have used fingerprint or face-recognition technology with our smartphones, but these innovations continue to diversify. Using behavior recognition, computer programs can identify whether your keystrokes or how you hold your phone is consistent with your typical baseline. Safeguards like these can help a company quickly identify that a customer is not, for instance, typing in his or her native language.
Related: 4 Digital Payment Trends for 2021
What's the right model for the user to "opt-in"?
Users' comfort levels span a wide spectrum when it comes to these new methods of payer authentication. While affording a higher level of security, these methods also raise questions about privacy.
The new systems are creating a higher standard for authentication across all three layers of a transaction stream:
- Creating an account
- Initiating a purchase
What makes the evolution of technology so fascinating is that you can never predict how long adoption will take. It's true that technology companies are always three or four (or ten) steps ahead of what we see in the marketplace, and there's usually a systematic plan for unveiling these developments to ease consumer shock (and maximize profits).
Events like our global pandemic can speed up a process that would have otherwise taken a decade to implement. Consumers will keep driving this growth as they see a vision for the future and will likely become comfortable with a frictionless shopping experience the same way they have with curbside pickup — in time.
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