Faced with dwindling sales at its brick-and-mortar stores, Whole Foods adopted Apple Pay as part of its digital strategy to attract customers. In the year since, the company has seen a 400 percent leap in mobile payments—and achieved an all-time record sales of $4.7 billion in the first quarter of 2015.
It’s all about convenience. Accepting contactless NFC payments such as Apple Pay, Android Pay or Samsung Pay lets customers pay simply by holding their smartphone contactless credit card near the NFC-equipped terminal. Merchants benefit from faster transaction times. Consumers say it makes their buying experience convenient, easy and simple.
Anytime you can remove pain from the sales process, it’s a win—and companies are increasingly turning to NFC payments to satisfy the mobile generation’s demand for more convenience. More than 700,000 stores now accept Android Pay, and retailers processed 1.5 million Samsung Pay transactions, worth $30 million, within a month of its launch.
It’s all in an effort to capture part of the growing mobile payment market, fueled by tech-savvy consumers and expected to reach $142 billion by 2019. At least one in five smartphones are NFC ready, and allowing customers to use whatever payment method they prefer is always better for business.
How NFC Payments Work
With NFC, or near-field communication, data is easily transferred from one device to another without any contact required. When customers scan their smartphones or NFC credit cards at the NFC-enabled terminal, the payment information is encrypted and transmitted by Apple Pay, for example, to the merchant services provider who then processes the transaction and transfers the funds to the merchant.
By installing NFC terminals, businesses can accept credit cards that use the contactless technology while also allowing mobile payments from a smartphone. The terminals simply need to be configured for the providers you want to accept NFC payments from.
Benefits of NFC Payments
Convenience is a compelling reason for both merchants and consumers to embrace NFC payments, but it’s not the only one. Accepting mobile payments makes it easier to implement, track, and manage customer loyalty programs, which can have a powerful impact on sales. Other benefits for businesses include:
Enhanced security. Encryption, tokenization, and multiple layers of security help protect consumers against identity theft. For example, Apple Pay generates a dynamic code for each transaction but keeps sensitive data private. Even if a breach occurs, the transaction information would be useless.
Faster checkout lines. Contactless payments save time—transactions average 12.5 seconds, compared to 26.7 seconds for traditional credit cards and 33.7 seconds for cash. The boost in operational efficiency can result in more revenue, shorter lines, increased customer satisfaction and a need for fewer personnel during busy times.
Competitive edge. Customers who use NFC payments use them often and tend to be loyal to businesses that accept them. MasterCard reports that contactless cardholders make purchases 26 percent more often than regular cardholders.
As more and more smartphones come equipped with NFC technology, contactless payments stand to make an increasing impact on a business’s bottom line. Contact Bankcard Brokers today to find out how you can get a free Apple Pay terminal and start accepting NFC payments from your customers.