Why “tap to pay” could be on the rise this holiday season
Contactless cards, mobile device payments expanding payment options – and safety
The holiday season is upon us, and millions of Americans are heading to stores to find something special for their loved ones.
Whether it’s a gift card or a cashmere sweater, bought online or on Main Street, the number of ways to pay for items is growing. One of those options is contactless cards, which have been recently reintroduced to the American shopper and are now widely accepted.
Contactless cards have a “tap to pay” action that’s similar to making a purchase with a mobile device, and payment industry stakeholders agree the U.S. is on the way to supporting both contactless cards and various types of mobile payments. This holiday season could be a good test of whether they’re right.
Tap to pay aims to make payments more efficient, but it’s also more secure
The National Retail Federation estimates that Americans will spend an average of $1,048 this year, and Ibotta’s 2019 Holiday Shopping and Mobile Payments Study found that two-thirds of shoppers plan to use mobile payments for holiday shopping.
As consumers ramp up the seasonal spending, and pull out their devices to do it, expanded payment options are also leaving them better protected. It’s tough for the average consumer to notice, but payments are getting safer, and contactless cards are one reason why. While their initial rollout never gained traction 15 years ago, a lot has changed in the payments industry since then, and financial institutions are shipping improved contactless credit and debit cards to customers. The contactless cards have the same security as the EMV chip cards that people insert in a payment terminal, and tapping to pay offers better speed and convenience, according to a recent Federal Reserve Bank of Boston report.
Even without a contactless card, tap to pay remains an option with a mobile wallet like Apple Pay, Google Pay, or Samsung Pay. These choices all use the same near field communication, or NFC, technology that transmits a signal between the device and a payment terminal, and they are even more secure than contactless cards.
That’s because when consumers add a credit or debit card to Apple Pay, Google Pay, or Samsung Pay, a substitute account number is generated (aka a payment token), and their actual account number is not shared with merchants. For online shoppers, mobile wallets like Apple Pay and Google Pay also offer speed and security. Consumers can check out with one click at mobile retailer websites or with apps that accept Apple Pay or Google Pay, then authenticate the purchase by scanning their fingerprint or face – without entering shipping, billing, or payment information.
Contactless cards are being accepted by more retailers – and for “red kettle” donations
Today, shoppers can tap to pay almost anywhere, from the largest national retailers to small, independent shops. According to Visa, 78 of their top 100 merchants (by transaction volume) now accept contactless. But tap to pay isn’t just available in retail stores. New York City shoppers, for instance, can tap to pay for subway fare to get from the Grand Central Terminal Holiday Fair to the shops in SoHo.
This holiday season, consumers can also make donations with a mobile phone. Using a system dubbed Kettle Pay, the Salvation Army’s iconic red kettles will display NFC chips and QR codes that allow shoppers to tap or scan their phones to make donations.
With contactless cards and mobile devices offering ways to get, give, and donate, holiday shoppers can do almost everything this year by tapping to pay. The question is, “Will they?”