Viaduct Contactless eftpos

Contactless or Near Field Communication (NFC) technology is quickly becoming the preferred mechanism for making and accepting payments in some overseas markets.  It’s already being used extensively and successfully throughout Asia and America at sporting events, fast food restaurants, bars, cafes, taxis and convenience stores to significantly speed up payments and is expanding rapidly in Australia, the UK and Europe.

As anticipated, some banks in NZ have started to release contactless capable cards which use RFID (Radio Frequency Identification) technology with the use of an embedded chip and antenna within the card.    We are starting to see the first generation contactless terminals enter the market, some of these pilot merchants can be found in hospitality, tourism and retail stores and the two major sports stadiums.  Paymark, Vodafone New Zealand, 2degrees and Telecom New Zealand have announced plans to bring the future of mobile payment services to New Zealand. This will allow New Zealanders to make secure payments, collect loyalty points and use public transport with their mobile phones.

This exciting initiative will create the infrastructure necessary to enable many of the cards held in a wallet today – bank cards, loyalty cards or transport tickets – to be replaced by applications securely stored in a virtual wallet on a mobile phone.

This technology has huge potential in the retail space, especially in places where checkout time matters, such as quick-service restaurants, bars and cafes.  The contactless cards are an interim step before the move to near field communication on phones.

Key Benefits:

Merchant Benefits:

• Fast transaction times - move customers more quickly through the payment process.
• Increased customer spending - increased frequency of purchases, and increased customer loyalty that leads to increased revenues.
• Improved efficiencies - Reduced cash handling, improved payment terminal reliability, and streamlined payment processes improve operational efficiency and reduce operating costs.

Client Benefit:

• Increased Security - the card or device remains in the possession of the customer, which provides a more secure means for processing
• General convenience - customer queues are reduced as transaction times are speedier leading to a better customer experience.
• Doesn’t need to be a card – Phones and other devices such as Key Fobs
• Globally interoperable solution
• Contactless acceptance supports mobile NFC

Viaduct’s Plan:

Viaduct is working closely with its key terminal providers to develop a contactless solutions.  We are delighted to launch our first contactless, NFC capable terminal plus reader the Ingenico SKyPay 300.  If you are interested in providing contactless or NFC acceptance then please call our team on 0800 484 238. 

FAQ’S

Q. How can retailers make contactless payment work for them?

A. For it to work, it must address the individual retailer’s need. With transactions via contactless payment capped at $80, this way of buying goods is not going to be useful for an antique store. However, research has shown the average ticket size when using the technology is around $10, so the system is ideal for companies such as coffee stores and bakeries, where fast and low value transactions are common.

Q. How long before contactless payment options are the norm?

A. For the contactless payment tipping point to occur all it will need is for one of the big retail players such The Warehouse to roll it out. Self-service checkouts are where the real potential comes in and technology will be adopted early by the grocery stores.  It is however all reliant on the issuing banks to ensure there are cards made available for consumers to utilise the technology. The younger generation will adopt contactless earlier than most due to their familiarity with technology.

Q. How much quicker is it to use contactless technology than normal chip and pin?

A. The average contactless transaction is 0.5 seconds, compared to three to ten seconds for chip and pin. Using cash and having to wait for change is also a slower process than contactless. Using the new technology effectively takes the payment obstacle out of the critical process of getting people through tills at peak periods during the day, such as early mornings and lunchtimes.

Q. Why should retailers consider contactless payment technology if they haven’t done so already?

A. Research has shown that using contactless payment technology can typically result in five to 15 per cent higher ticket values and, due to the speed of the system, those who are usually self-conscious about using their credit or debit cards in busy queues have another option at their disposal. As well as the speed of service, it reduces the amount of cash that needs to be handled.

Q. How can I be sure that only one payment is taken from a Contactless card?

A. Contactless terminals are programmed so that they only take one payment from one card for any one transaction. A second payment can only be made if the card is removed from the field and a second transaction initiated by the merchant by entering the amount to be paid on the terminal.

When a transaction is complete the lights on the reader will illuminate and may be accompanied by a short beep.

The transaction will be rejected if the reader senses more than one card being presented at one time.

Q. Does a cardholder have to use Contactless; can they still use chip & PIN?

A. As long as the retailer accepts chip and PIN card payments, the cardholder will still have the option of paying by chip and PIN rather than Contactless.

In the future there may be a limited number of environments where customers will only be able to pay by card using the Contactless functionality – when using transport facilities for example.

Q. Will contactless payments be treated as a cash transaction on a credit card?

A. No, these transactions will be treated as any other purchases on your credit card even if using a Visa or MasterCard Debit.  This means from a retail perspective there will be merchant service fees attached to these transactions

Q. What about Fraud?

A. Contactless Payments are safe and have minimal risk for customers and retailers. 

To prevent fraud and protect the cardholder, the owner/customer must enter their four-digit PIN code after every fifth Contactless transaction.  This is to prove the customer is still the card owner and limit the damaged caused by lost or stolen cards.  However, every time a standard Chip & PIN transaction is completed, your cumulative total of Contactless transactions is reset to zero.

There is also a periodic check where the card owner will be forced to enter a PIN code during a Contactless transaction.  In genuine situations, the cost of fraudulent transactions will not be passed back to the retailer or the cardholder.