It’s a fair question to wonder whether contactless payments are dead – at least in the United States. Some merchants have gone as far as to disable this checkout feature as the payments industry focus has shifted to EMV.
While tap-and-go has not delivered on its early potential for mass adoption, it would not be wise to set aside this model just yet. After all, the contactless consumer experience resolves the main perception issue plaguing the EMV rollout.
Is EMV slower or does it just seem that way?
As reported across the industry, the four major networks have returned to the drawing board to address marketplace concerns centering on transaction times. These initiatives have been broadly lumped under the “Quick ChipTM” banner.
These Quick Chip initiatives largely focus on reducing the time cardholders are required to leave their card inserted in the point of sale (POS) terminal – the part of the transaction that draws attention to response time. It’s worth noting that efforts to shave seconds off the POS experience are hardly new. In the magnetic stripe world, the majority of a sales receipt is printed while card authorization is taking place for this reason.
As with the actual time savings gained by printing the receipts while the transaction is being processed, in all likelihood EMV without Quick Chip is only fractionally longer than the magnetic stripe transaction in reality. However, the perception is that the EMV experience is much slower than a card swipe and, as the saying goes, perception is reality.
Enter the contactless payment model
Now consider a POS experience that is even faster than swiping a card – the contactless payment. With contactless payments the network has a much shorter window in which to interact with the card, as the card is available to receive info back from the network. Therefore, the process must work more quickly, which typically means the exchange of smaller packets of data. (Note: EMV Quick Chip programmers have taken a similar tack to contactless by slightly reducing the amount of data transmitted to save transaction time.)
In addition, the contactless option may not involve a card but rather a consumer device, i.e., a smartphone. Apple, Samsung and Google are often referred to as the Three Pays because they have been the initial catalysts in unlocking potential for this type of contactless payment. Though the adoption of contactless has not been rapid, momentum is growing. The perceived lag in the EMV model may help accelerate adoption since using a smartphone to pay only requires a “hover” rather than a swipe, dip or tap.
Suffice it to say that EMV is but one of the testing hurdles facing organizations in the U.S. as new ways to pay are pioneered to satisfy the consumers always growing need for more and more convenience. It is unlikely that pressures in this area will diminish anytime soon. That is why I am spending more time with a variety of financial services providers discussing what next generation testing software will be needed to address these ongoing challenges.