indicatorAdvice for Alberta businesses during the COVID-19 pandemic

Contactless payments: Not just a nice-to-have anymore

By ATB Financial 26 June 2020 3 min read

Since the global pandemic hit Canada, the use of contactless payments has skyrocketed to 80 per cent, up from 15-20 per cent pre COVID-19. Between February and March 2020, credit card giant Mastercard saw a worldwide spike in contactless usage as physical distancing and other challenges changed the ways consumers shopped.

Overnight, offering the option to tap your card on a terminal instead of touching the screen and inputting information has gone from a nice-to-have to a need-it-now for many businesses. Along with growing acceptance of wearing face masks to reduce the risk of infection, contactless payment options give consumers more comfort and confidence about managing their personal health risks.

Benefits include:
A touch-free payment experience
Transactions that take seconds to complete
Encrypted payments
Liability guarantees, which protect the business and the cardholder
Seamless customer experience

But there still are concerns and sometimes confusion around contactless payments. Cost, credit card versus debit, safety and limits are all key considerations for business owners. Here are some considerations around this increasingly essential payment option:

The value of contactless functionality is well worth the cost

One of the top issues keeping entrepreneurs from subscribing to contactless payments is the cost. While there’s a small cost to offering tap for credit cards and flash for debit, considering Visa and Mastercard charge for keyed transactions, making transactional fees a day-to-day expense as it is.
And in terms of streamlining your customers’ experience and gaining a competitive advantage, the small increase is worth the cost—particularly in today’s contact-averse world.

“The value proposition is huge,” Krista Gullage, Director, Advisory Core Products with ATB says. “And it adds to the user experience. For you as a business owner, small amounts cost less to transact. Consumers want the convenience of tap and go. And it adds to your competitive advantage, too.”

Contactless payment, whether by bank card or Apple, Garmin or Google Pay, provides safety and convenience for both merchant and consumer. As a business owner, the technology enables you to handle more customers efficiently, from reducing line-ups at your till with simple tap-and-go, to quicker curbside delivery. You’re also providing another layer of physical security to your customer.

Different payment cards, different limits

Prior to the pandemic, customers could tap a maximum of $100 per purchase. Now, most can tap up to $250 on their Mastercard, Visa or American Express card, as card issuers respond to new shopping behaviours. Interac, which controls the debit card market in Canada, has not increased its limit from $100.

You may notice that the tap function doesn't work for all customers and credit cards. In most cases, when tap fails and a customer has to insert their chip and enter a PIN instead, the problem isn't with the electronic payment device. All ATB merchant devices accept contactless payments and there are no lowest spend limits, though the merchant still needs to turn on the functionality, Gullage notes. The challenge comes from the credit card issuer—while most issuers automatically increased their customer limits on contactless payments, several did not.

“It has to be a meeting of the minds,” Gullage says. “The device may be $250, but the credit card issuer has to have increased the limit from pre-COVID. Some have done it automatically, and others require the holder to request the increased limit. Alternatively, the card issuers may have increased the limit, but the merchant hasn’t turned on the tap function of the device. These could be two reasons why the functionality works on one merchant and not the other.”

Safety in contactless payment numbers

Contactless payments are done using a chip rather than outdated magnetic strips. The benefit is each payment is a totally encrypted transaction with one-time codes protecting the user’s information each transaction. The data associated with the credit card constantly changes, so even if the system were hacked, the data found would be useless.

“Your business and your customers are also protected from fraudulent activity by the credit card company’s liability policy—anything under the $250 limit is covered by Visa, Mastercard or American Express. If the charge is fraudulent, neither the cardholder nor the merchant is liable,” Krista notes.

You’ve always worked hard at making your business a welcoming place for your customers. Enhancing their sense of security while providing the convenience of contactless payments delivers an even better customer experience—and boosts your bottom line.

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