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With payment methods like tap-to-pay cards and QR codes on the rise, more businesses are adding contactless options every year.
Still, many businesses and customers might be concerned about the safety of these solutions. Are contactless payments safe? To assuage your concerns so you can take advantage of these powerful tools, we'll unpack different types of contactless payment options and share how they are safe and secure for use within your business.
The short answer: contactless payments are generally considered one of the more secure ways to accept money, because encryption and one-time codes help keep your customers' card details out of reach. Here's how each method helps protect your business.
Businesses can offer a range of contactless payment methods to make transactions fast and efficient for their customers.
Popular contactless payment solutions include:
When it comes to contactless payment safety, QR codes, digital wallets, and contactless cards have a lot to offer. These payment methods often have multiple security features built in and consumers are becoming increasingly used to them as they grow in popularity
Beyond security, contactless payments give your business practical advantages:
QR code payments in particular are one of the fastest-growing options, giving even the smallest business a low-cost way to accept payments.
Even if you know what a QR code looks like, you might not know how it works and what makes it a secure payment solution. Here's a quick look at how QR codes work and why they should be high on your list of securecontactless payments.
QR codes, like regular barcodes, are custom graphics that store information and are read by machines. While barcodes are read horizontally, QR codes are read both horizontally and vertically. This way, they can store more information and be more difficult to hack.
They can also be placed on many different surfaces, like printed on a poster, displayed on a screen, or painted on the side of a building. And they can be easily scanned at any angle using a smartphone camera or compatible app.
Once customers scan a QR code, they can be directed to any URL, like your payment portal. There, they can enter their information and complete their purchase.
A QR code itself isn't encrypted. It's a container for a link or a short string of data that any scanner can read, the same way a barcode is. The security comes from where the code points: if it leads to an HTTPS page or your PayPal-hosted payment portal, that connection is encrypted, and your customer's information is protected there, not inside the code itself.
Even if you use QR codes to send shoppers directly to your payment app or website, you can use data encryption to protect the customer information entered there. You can also set up your QR codes with two-step verification for accepting payments.
Here are a couple of actions you and your customers can take to help ensure your QR code payments remain safe:
Contactless payment security depends on the method, so we'll take them one at a time, starting with tap-to-pay cards and devices, the most common form businesses accept.Every tap-to-pay transaction sends a one-time, encrypted code instead of your customer's actual card number. Contactless cards also transmit over a very short range, about 4 cm or less, so the data can't be captured from a distance. Together, encryption, tokenization, and that short range make contactless one of the safest ways to accept payments. QR codes and digital wallets use their own protections, covered in their own sections above.
How safe is tap-to-pay, really? Believe it or not, tap to pay can be safer than paying with a credit card chip or debit PIN. When you insert your chip or enter your information into a credit card reader, that information can be copied or hacked.
Customers may want to know, is tap to pay safe from skimmers? Skimmers copy data from a card's magnetic stripe when it's swiped, a tactic the FTC has warned about at gas pumps and other unattended terminals. Tap to pay doesn't use a stripe swipe, so there's nothing for a skimmer to capture. 1With tap to pay, your contactless debit card or credit card never makes physical contact with the card reader. Instead, it sends an encrypted, one-time code containing your payment information to the merchant's payment processor. Even if someone were to intercept this code, they'd need the right knowledge and tools to decrypt it. That’s why tap to pay avoids the kind of stripe-skimming the FTC warns about.1
Furthermore, many customers appreciate tap-to-pay because it reduces their need to touch germy register stations and card terminals.
How do contactless payments work, anyway? These payments use a process called payment tokenization to protect customer information.
Here's how it works: a credit card issuer creates a token, or a unique string of numbers, in place of the customer's credit card number and billing address. Instead of transferring that sensitive data every time someone makes a payment, the token is exchanged.
Not only is the token encrypted, but it also has an expiration date. Plus, it can only be used by certain merchants and devices. So even if someone steals the token, most likely they be unable to use it to access or duplicate the customer's payment information.
Digital wallets are equipped with security features to help keep customer information safe. For example, they may require two-factor authentication to access the account or complete a payment transaction. Like contactless credit cards, digital wallet payments also use tokenization to send encrypted information between devices.
On top of that, many people protect their mobile devices with passwords or face scanning so only they can access their apps, including their digital wallet.
You can increase the security of contactless payments with a few operational habits:
With the PayPal app, you can enable Tap to Pay in minutes and accept payments virtually anywhere.
Today's customers want convenient contactless payment options that keep their information safe and make checkout a breeze.
Merchants can meet their needs by accepting multiple payment solutions, including QR codes, digital wallets, and POS systems that support tap-to-pay. If your business chooses to take contactless payments, you may be able to speed up transactions and increase customer trust.
Not sure where to start? Compare your options and choose the right PayPal POS system for your storefront.
Learn more about how to safely and securely accept payments with PayPal.