By Adrian Valeriano, SVP & MD, EMEA Lightspeed

Contactless payments are no longer just a matter of making a payment for goods. They provide a seamless link to omnichannel retailing, a pre-booking system, online ordering, customer data and personalization, and more.

There have been numerous predictions for the death of cash over the past decade, but the COVID pandemic seems to have accelerated its demise a little more sharply. Fears over the virus’s transmission via notes and coins have persuaded many hospitality businesses and retailers to ditch hard currency entirely.

But contactless payments have proven their worth for years, not just for ease of use, but how they can integrate into a business ecosystem. Contactless can connect to the back office via the Point of Sale (PoS) system, keep control of inventory, integrate on-line and physical sales, coordinate table booking systems, and help customers split bills. It’s something that hard cash could never do. In the UK, the limits for contactless payments have recently risen from £30 per transaction to £45 to £100, and fears over fraud and card misuse have been largely reassured.

The Convenience of Contactless

Research from Mastercard revealed that mobile contactless payments in Europe doubled in the first quarter of Q1 last year, undoubtedly as a result of the pandemic. Three quarters of all payments across Europe (78%) are now contactless.

Contactless does not just provide convenience, but also safety. Our recent survey shows that more than half (52%) of merchants say they’re worried about the safety of employees and customers.

Contactless is used not just by physical stores and hospitality outlets, but for e-Commerce too. More than eight-in-ten (83%)  e-Commerce entrepreneurs in the United Kingdom use mobile payments. The beauty of contactless payments is that they are protected by the EMV standard; a global standard of inter-operation of integrated circuit (IC) cards and IC card capable point of sale and automated teller machines.

The small microchip in the credit card protects buyers against fraudulent transactions. Because of the change in credit card security, banks have phased out magnetic stripe cards in favour of these more secure, authenticated ways to pay.

Apple Pay leverages a payment security method called ‘tokenization’. Rather than storing sensitive card data on a mobile device, it replaces that data with a ‘token’, which is just a random series of numbers and symbols used to represent the card data. The numbers are meaningless on their own.

The only parties that can decrypt, or detokenize the token are the card networks that have access to the tool. They do so under very strict protocols. It’s this level of security that has made contactless payments, either through the EMV validation, or Apple Pay’s tokens, so effective.

But card companies – much the same as commerce platforms such as Lightspeed – are also finding more ingenious ways to utilise card technology. Contactless provides retailers with access to crucial sources of customer data. With every swipe or tap it provides the business overview they need to make better informed decisions.

Lightspeed research shows that 94% of UK business owners believe that integrating payments directly into their operations will save them money; another 79% believe it will save them time.

Beyond the Brick & Mortar POS

The Lightspeed platform helps retailers and the hospitality sector keep control of stock levels and inventory, manage guest data, reservations or shopping appointments, and connect the POS seamlessly to the back office. But one of the smartest features is the ability to link physical and online stores seamlessly across any platform – providing the true omnichannel experience.

Lightspeed’s newest integration with Google seamlessly connects the Lightspeed commerce platform to Google Local Inventory Ads, Smart Shopping Campaigns, and Google My Business, driving more local foot traffic into retail locations as well as raising awareness around local businesses online.

Contactless shopping is no longer just presenting your card to a machine for a simple method of payment. It’s part of a fully integrated e-commerce and back-office integration system. It’s no wonder retailers and the hospitality sector love the simplicity and security so much.

With innovations coming on stream all the time, the sky’s the limit for the potential of contactless for independent businesses.