The future of contactless payment technology

In recent years, financial technology has revolutionized the way people pay for goods and services. One such advancement is contactless payment technology, which is becoming increasingly popular, with mobile payments such as Apple Pay and Google Pay joining contactless credit and debit cards.

The convenience of contactless payment technology has made it an easy way to make purchases without having to withdraw money. This article explores the potential of contactless payment technology and its future direction.

The rise of contactless payments and a cashless society

Contactless payment technology is a unique advancement that has completely changed the way people transact for goods and services on the go. With the rise of mobile payments, contactless credit cards, and other payment systems in recent years, it’s clear that this trend isn’t slowing down anytime soon.

According to a recent report from an investment management company Bailard, “In recent years, we have witnessed the rapid global adoption of a superior form of digital payment: contactless payments (also known as ‘contactless’, ‘Tap to Pay’, ‘NFC payments’). Currently, consumers interact with contactless payments through two main forms: contactless credit and debit cards, and mobile wallets (like Apple Pay, Google Pay, and Samsung Pay). “

The constant reduction in the number of ATMs and the move towards online banking and modernized payment processes, according to Michael Schrezenmaier, CEO Europe of To summarize, has accelerated the move towards a cashless society in recent years. He said: “There is no doubt that some of the biggest innovations in merchant products and services used in the industry are in contactless payment solutions. Additionally, the emergence of COVID-19 and the need for merchants to respect social distancing The health measures and guidelines put in place by the government have meant that this dependence on contactless payment solutions has become even more important in the last 18 months. “

A cashless society has many advantages for both individuals and businesses. From an individual perspective, it is much easier to shop without having to physically carry cash when shopping or dining out. Plus, making payments this way avoids the risk of losing money if their wallet is stolen while on the go. It also greatly helps in tracking payments so that law enforcement agencies can easily identify those involved in illegal activity.

The significant rise in contactless payment technologies is also benefiting businesses. For example, with the rise of mobile payment systems such as Apple Pay and Google Pay, retailers are much more comfortable accepting card transactions on the go without the need for an expensive payment terminal or contactless terminal. . In addition, the payment time is much faster than paying by cash or check, and there is no need for change to make small purchases.

The difference between contactless cards and smartphones

There are three main differences when it comes to NFC on a powered device such as a smartphone on contactless cards, according to Dickson Chu, CEO of The copper and former CEO of Citibank;

  • 1) Peer-to-peer, so that two NFC-enabled devices can establish a connection and share data;
  • 2) Read / write, so that an active device such as a phone can retrieve data from a passive device without the ability to read the information itself, such as a contactless piece of plastic;
  • 3) Map emulation, so people can create digital copies and reproductions of physical maps.

This difference means that smartphones have a lot of potential to play in this space. With the rise of smartphones and mobile devices, there are plenty of opportunities for unexpected use cases of contactless payment technology.

In terms of security, with card emulation on Android devices, users get all the benefits of physical cards (like tokenization) without the drawbacks. For example, unlike contactless cards where people are limited to certain types of payments or have restrictions on how much they can spend per transaction, there is no such limitation with mobile devices.

The future of contactless payments

According to Greg Goldfarb, vice president of commercial products at Come on daddy, “Although many social distancing restrictions have been relaxed, over the past two years consumers have developed new habits that have become expectations of how they shop. much more comfortable relying on a digital wallet and reducing the use of their physical credit cards. “

While there have been many advancements in contactless payment technology in recent years, this is only the start of what appears to be a huge move towards cashless. As society becomes increasingly reliant on mobile devices and contactless payment solutions become part of everyday life, it won’t be long before we enter an era where physical money seems obsolete.

“The pressure from regulators for cashless will accelerate, and we are sure to see the continued closure of bank branches in small towns across Europe, eliminating easy access to cash and further increasing reliance on cashless solutions. contactless payment. At the same time, as consumer behaviors continue to demand better and more innovative products, as well as the continued growth of e-commerce, we are likely to see a greater variety of mobile payment solutions, such as other payment trends. NFC compatible (like portable payment devices like watches and rings), in addition to innovations in QR code payments, ”adds Schrezenmaier.

In summary, the future of contactless payment technology is bright, and it looks like these innovations will continue to develop for the foreseeable future. While many people already prefer digital payment methods over card transactions, the fact that there are now more contactless payment terminals than ever before is just another step in the process. Plus, with new developments like Apple Pay evolving into a cashier-less store concept that doesn’t require any NFC hardware but instead uses Bluetooth technology and facial recognition software means people could live in a society without a cashier. cash in a matter of years.


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Elaine R. Knight