03 / 07 / 20

Contactless Payment Options Explained

The U.S. has been slow to adopt contactless payments, but the COVID-19 outbreak is shifting consumers toward alternative payment methods. We all know that cash is filthy, and consumers are now more interested than ever in minimizing contact.

When it comes to contactless payment options, you have the common players like Apple Pay, Google Pay and Venmo, but also up-and-coming options such as blockchain and cryptocurrency.

The preloaded digital wallets on smartphones (Apple Pay, Google Pay, etc.) use secure storage apps that store credit cards and debit cards, putting your cards in a full contactless environment. Consumers appreciate the convenience of having their credit and debit card information stored in one place, and it eliminates the need to carry around a thick heavy wallet.

The technology behind preloaded digital wallets is NFC (near field communication) where an NFC-enabled point of sale terminal can communicate with your mobile device that has the technology (most new phones have this built in). This solution has been around for several years and is widely used.

Peer to peer (P2P) apps such as Venmo, Cash App, and Zelle allow people to transfer funds without having to exchange cash. This is traditional fiat currency that can be transferred.

Blockchain and cryptocurrency: the future of contactless payments

The newest contactless payment technology is blockchain and cryptocurrency (Bitcoin, Litecoin, Ethereum, etc.). The ease of moving funds quicker, easier and more securely has made these emerging currencies very attractive to consumers and merchants alike. Blockchain enables merchants to receive payments from anywhere, from any device, with no foreign-exchange fees, currency conversions, or traditional wait times. Fintech players in the payment space using this technology are Coinbase, and Square with the Cash App, and Aliant Payments with the CryptoBucks app. It is also rumored that PayPal is developing a cryptocurrency expansion on their platform.

 

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