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Coins, Cash, Credit, Contactless — Oh My

March 06, 2024

You might have noticed that there has been a shift in how people are paying for goods and services as the COVID-19 pandemic sped up the adoption of contactless payments for many American consumers. Even as we have returned to in-person commerce, some of these new payment experiences and habits have solidified – and even grown further. Convenience and consumer experience are driving the pivot to contactless payments. But to know where we are, and where we are heading, let’s take a quick trip back through history to understand how we got to where we are with the payments experience. 
The oldest form of commerce is bartering. Bartering is the exchange of goods and services between two or more parties without money. Individuals or companies would negotiate based on equivalent estimates of prices of goods and exchange in this manner. While this cashless form of commerce remains in use today, the Coinage Act of 1792 established the United States Mint and the authorization of production of coins being minted using gold, silver, or copper – thus ushering in a new way to pay for goods and services. Paper money printing would soon follow in 1861. Fast forward to 1950 when an iteration of the modern credit card was created by a businessman that went out to dinner in New York City and forgot his wallet. The Diner’s Club Card was born out of embarrassment and as a multipurpose charge card solution. American Express issued the first credit card made of plastic and IBM would assist in creating the technology known as the magnetic stripe. In 1994, Europay, MasterCard, and Visa combined forces to come up with the secure payment technology, EMV, which is still used today by top credit card, debit card, and prepaid card products. 
Now we’ve entered a new era in commerce where direct card to reader contact isn’t necessary, or even the requirement to carry a physical card in our wallet. Contactless payments have risen quickly to popularity and continue to grow across the globe. The two technologies that make contactless payments work are radio frequency identification (RFID) and near-field communication (NFC). The consumer simply needs to be close to the point-of-sale terminal with their contactless payment feature to make the transaction work. 
This technology has improved the customer experience in many ways and has made the payment experience seamless for businesses as well. With the increase in contactless payment acceptance, there are now several options for those interested in this improved experience. 
Contactless Cards 
The most popular option and often used version of contactless payments are the contactless debit and credit cards. You might have heard this form of payment referred to as “tap to pay” cards. The card looks the same as a regular credit card, but it has a small antenna in it that communicates wirelessly with the card reader.  
The tap to pay adoption has had rapid growth in just a few years. The contactless market in the U.S. brings a lot of opportunity and growth, especially as a 2018 study revealed that 95% of new point-of-sale terminals are equipped with tap to pay. 
Digital Payments 
In today’s world of commerce, the term digital payment—and for the purposes of this article—is used to refer to payments that use a device to make payments. With online shopping becoming so popular, digital payments have become nearly mandatory. Many websites offer different options for digital payments, to cater to each consumer’s preferred payment type. These payment types include credit cards, debit cards, or mobile wallets. 
Your trusted payments provider will expertly direct you about ensuring you enable digital payments on your website, and you are set up with the most reliable and dynamic payment solutions that incorporate all digital payment options. 
Mobile Apps and Wallets 
Contactless cards are easy to use and make the process of completing a payment quicker, there is still the hassle of physically carrying cards with you and presenting them during a checkout. Mobile apps and wallets have presented the solution to creating a faster and streamlined payment experience. To make this contactless payment experience happen, you simply need to carry your mobile phone with you – which nearly every person does now anyway.  
Payments through mobile phones have become very popular in recent years because of its convenience, security and users don’t have to touch anything except their own phone. All the user needs to do is download any application they feel is best for making online payments and link it to their bank, debt cards, or credit cards. From there, simply scan the unique QR code and then the consumer only needs to enter their secure pin and the payment is done. Business owners only require the unique QR code and a contactless point-of-sale terminal to offer this method of payment. 
Contactless payments are a technology that is evolving and its possibilities for delivering a simplified payment experience are yet to be discovered. Biometrics combined with the comfort of an easy-to-use mobile device, creates a secure and convenient payment transaction that consumers crave.