Chip cards have been widely used for years. By early 2020, the majority of merchants were either already accepting them or had plans to accept them over the next year.1 At the same time, contactless payments were gaining popularity for their speed and convenience, especially internationally.
It wasn’t until being in public and touching surfaces became a potential health hazard—let alone waiting in long lines— that contactless usage exploded.
Given this rapidly increasing demand, it’s no surprise that merchants that have upgraded their systems to accept contactless payments are enjoying the benefits. By September 2020, for example, Discover® Global Network had experienced a 184 percent increase in contactless spending year to date.1
This important shift—and the close relationship between merchants and providers— gives POS software developers a unique opportunity to educate merchants about the benefits of contactless payments and other payments advances, especially as their adoption continues to accelerate.
Friction during checkout leaves lasting damage
Whether working with developers to design their e-commerce solutions or hiring integrators to deliver the functionality they need to serve customers, merchants are taking note of changes in the marketplace—and turning to providers to bring them solutions.
Independent software vendors (ISVs), gateways, and resellers, for example, are helping merchants upgrade their point-of-sale (POS) technology to accept contactless payments. This is a crucial step toward minimizing undue friction at checkout.
Customers have become so accustomed to having contactless payment options, in fact, they could become confused when those options aren’t available. As a result, some merchants without contactless capabilities might need to post signage telling customers to swipe or insert their card instead of tapping it.
While this might seem like a minor hassle, the last thing merchants want to do these days is create any friction that could potentially lead to a lost sale—especially given the everincreasing competition among merchants, both brick-and-mortar and online.
As more customers experience the benefits of contactless payments, they will expect merchants to make the upgrade—or they might take their business elsewhere. In fact, a 2020 survey by 451 Research found that 60 percent of consumers said they had abandoned an in-store purchase in the previous six months because the merchant didn’t offer their preferred payment method.2 A more recent study found that when that happens, consumers often seek a merchant that can give them the payment experience they want.3
Supporting customer choice
The good news is that many modern POS systems are already equipped with the technology to accept contactless payments—including payment cards as well as digital wallets like Apple Pay, Google Pay, and Samsung Pay. That functionality only needs to be activated, and POS software providers and card networks like Discover® Global Network have dedicated resources to help with the switch.
This is a major selling point for software providers: As contactless payments become even more popular, customers will be attracted to merchants that accept them in all their forms. Just like contactless cards, digital wallet usage via phone or wearable payment device is also on the rise. In fact, digital wallet volume is expected to grow to 56 percent of total m-commerce spend by 2025.4
Adding security measures like fraud detection is also key for merchants to feel comfortable incorporating these new payment methods. Responding to a 2020 survey by 451 Research, 69 percent of merchants around the globe said high fraud rates were their top in-store payment challenge, and 49 percent said reducing fraud was their top priority.2 Fortunately, many merchants have already upgraded to EMV-compliant chip card payment solutions such as Discover® D-PAS for more secure transactions.
Bringing in international customers
It’s also important to consider differences in payment preferences around the world. The reason is simple: Residents of other countries, especially those in Asia, represent a significant portion of all shoppers. Even prepandemic, for example, China and India used mobile wallets more than any other region, and mobile wallet usage in China was nearly 2.5 times higher than the global average.5
When international borders eventually reopen and travel returns to more-normal levels, merchant familiarity with these payment methods will be a huge customer experience factor for these visitors. And because customers could be using foreign cards like Japan’s JCB or China’s UnionPay, POS software providers should recommend that merchants support transactions from all payment networks, including international ones.
Fortunately, catering to these international travelers is relatively simple. Domestic networks are ready to help merchants attract these international customers—by providing signage and other resources that can raise awareness and drive usage of international cards.
With the benefits of contactless payment acceptance becoming clearer by the minute, POS software providers should have little problem selling merchants on the value of activating the functionality. Even beyond its strong appeal for time-crunched consumers, it creates a foundation for broadscale payment acceptance.
By helping merchants understand the importance of contactless payments, software providers can strengthen client relationships—and build new business.
For more information on contactless technology, you can explore a range of solutions here.
To learn about the benefits of partnering with Discover® Global Network, see how we can help expand your global reach to attract more customers.