Businesses Embrace Contactless Payments

Contactless payments options can come in many forms, from mobile wallet payments to tap-to-pay transactions. In fact, 85% of customers surveyed in Square's Future of Retail 2022 Report said businesses with contactless options made shopping more enjoyable.

This article is for educational purposes and does not constitute legal, employment or tax advice. For specific advice applicable to your business, please contact a professional.

The use of contactless payments surged at the onset of the pandemic, and 50% of consumers surveyed in Square’s Future of Retail 2022 Report say they want them to stick around in the future. In fact, 85% of customers surveyed said that measures put in place to make shopping more contactless have made the shopping experience more enjoyable.

Contactless payment options can come in many forms, from mobile wallet payments to tap-to-pay transactions. These payments don’t require any physical contact to complete a purchase. Both retailers and restaurateurs have adopted a range of contactless options that not only make the shopping experience touchless but shorten wait times to check out as well. Business owners can connect with their customers on multiple platforms by leveraging an omnichannel strategy and allowing them to pay where and how they prefer.

Consumers Want More Payment Options

The separation between shopping online and shopping in-store is narrowing. Shoppers say they are looking for more of a hybrid experience. Adopting an omnichannel strategy as a part of your business growth plan enables you to capitalize on customers who want more of a hybrid experience. They may start by browsing your products online or booking an appointment before coming in person for that product or service. Once customers are in-store, they’re looking for a seamless and integrated shopping experience.

For restaurants, tableside payments are often considered part of those touchless payment options. The majority of restaurateurs surveyed also offer contactless payment options, with more than half of those considering tableside payment options in addition to their current contactless offerings.

Pay-at-the-table devices can facilitate higher tips as the device prompts customers with the option on the spot. These devices also offer a secure way to check out and an experience where customers can pay with a card or mobile device without it ever leaving their side.

Wallets Are Evolving With Customers

According to research, 88% of Canadian consumers have a smartphone, 74% know they can use that phone to make typical purchases and 47% more are paying digitally now than prior to the pandemic. While more consumers are making digital payments, younger generations who prefer using a mobile wallet instead of carrying physical cards or cash make up a higher percentage of those consumers.

Businesses are readying themselves with mobile wallet payment options so that customers can transact in the way they’re most comfortable, increasing the likelihood of a sale. Of the 93% of retailers surveyed that offer contactless payment options, 58% offer mobile wallet app payments, 54% offer touchless card payments and 47% offer QR code payments.

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QR Codes for Browsing and Buying

Window shopping, or browsing products through shop windows or displays, is a term that has taken on new meaning as social distancing and safety protocols have shaped a new kind of window-shopping experience. About 21% of customers are now interested in window shopping with QR codes. Among Gen Z, that number jumps to 28%.

Use QR codes as an interactive tool in retail windows to promote special offers, scan-to-pay options or to follow your brand on social media. Retailers aren’t the only ones leveraging QR codes for business. Restaurants have been increasingly turning to QR code menus for a touchless option that not only makes browsing and purchasing food and drinks more socially distant but also cuts down on hands-on time staff would have typically needed to bring a menu to customers, take the order and return with the cheque at the end of the meal.

Offering different payment options that resonate with your customers can attract new customers and retain loyal ones. The added benefit of contactless payment methods like QR code-related payments, mobile pay wallets or tap-to-pay transactions is that they tie to a digital record so you can easily glimpse at your sales. From there, you can see trends that can inform your business decisions and help you better manage cash flow for your business.

“I think people in the future are going to go more for anything that is definitely contactless and is quick. We notice that a lot of our customers that come in want to be able to pay quickly,” said Freeman, adding that many of their customers pay with Apple Pay and Cash App Pay. She believes this shift towards quicker transaction times to quicker transactions being more commonplace at businesses in addition to her younger clientele adopting it.

Pulling sales reports through Square Dashboard regularly gives Freeman more insight than ever into who her customers are and how they like to transact. In addition to highlighting perennial customer favorites, these reports enable the Freeman family to plan ahead to stock and promote popular in-store options like seasonal sugar cookies or farmers market options like cinnamon rolls. This has helped build the bakery’s customer community on social media and in person, giving customers options for order pickups, surprising them with social media giveaways, and always being prepared with the base ingredients the bakery needs.

Seamless payments from in-store to online

Kei Collective co-owner Andrea Jonas reported, “There’s been a huge rise in contactless payments. Most of our off-site sales.” The business has experienced an increase in demand for mobile wallet app payments in person at pop-ups and conventions. “Customers at our booths used to ask ‘Do you accept card?’ but now the question is ‘Do you accept Cash App, Venmo, Apple Pay?’” She adds that transactions from the Cash App Pay option they recently added at checkout have made sales so quick and seamless that some customers double check to make sure they were charged.

For customers who aren’t requesting mobile wallet payment options, the majority use the tap feature on Square Register. Through the pandemic, this function has made business more seamless to operate and reduced physical contact. “We’ve loved having everything be on the customer terminal so that they don’t need to hand us a card and we don’t have to hand them a paper receipt. A quick wipe down of the Terminal between customers and we’re good to go!” said Jonas.

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Kei Collective is a Phoenix, Arizona, based shop that features over 80 independent artists. The three co-owners, Andrea, Stella, and Skylar are artists themselves who brought their own brands together. The business has a brick-and-mortar retail shop as well as an online presence and artists who are part of the collective pay a monthly fee to be in-store upfront and are paid out any sales made on their behalf at the end of each month.

Future of Commerce Retailer Data

While Kei Collective caters to customers in-person, they have seen many of their returning customers turn to online shopping/ “We’ve seen a steady move towards online shopping, even by local customers,” said Jonas. After adding pickup orders as an option for online customers in 2020, they’ve seen continued adoption of the feature. Customers who had come in-store for trips in the past would use the pick-up orders option to make repeat purchases rather than going in-store. Jonas says the website has not only helped customers shop and pick up their orders but browse new items before heading into the store so they make sure to keep the page up to date with the latest front and center on the homepage.