Utilizing a Contactless Payment Card to Reduce Risk Associated with Cash
In the 3rd post in our series on a cashless society, David Orme, SVP Sales and Marketing at IDEX Biometrics looks at how utilizing a contactless payment card can reduce risk associated with cash. The previous post in our series on a cashless society considered how businesses can leverage biometric identification to promote a cashless society.
Contactless payment cards have a unique place in the world of payment transactions. With their lower transaction thresholds and ease of use, they are perfectly poised to replace cash.
Contactless Payment Card Transactions Increasing
The number of contactless payment card transactions is increasing each year, with approximately 4.3 billion spent each month in the UK involving contactless payment card transactions. (https://www.moneysupermarket.com/credit-cards/contactless-payments/) These transactions tend to be incremental in nature and well below the transactional threshold. The average expenditure on a contactless card is £9.23! Using contactless cards for small transactions is quick, easy, and efficient.
These transactions are perfect as a cash-replacement option, avoiding the risk and nuisance associated with carrying cash and helping businesses avoid the delays and mistakes associated with cash transactions.
Typical Cash Transactions
Most people use cash for small, everyday purchases. From lunch to a forgotten toiletry item, these are the most common uses for consumers making cash purchases. These small purchases add up quickly and are surprisingly common.
The downside to using cash for these types of purchases is that it takes more time, between the consumer counting out the money and the cashier checking it and providing proper change. It is also a very insecure means of keeping track of one’s finances. Cash is not a trackable commodity for the most part, and if it is lost or stolen, it is unlikely that it will be returned or that the culprit will be found.
How Society Benefits From Going Cashless
More people having access to a contactless card will benefit society. From reducing checkout delays to providing consumers with a quick and efficient way to process small transactions, these cards will continue to be a prominent feature of financial institutions.
Furthermore, cards with built-in biometric identification provide even greater security and will help customers to overcome trust issues around digital payments.
Biometric enabled cards also reduce the risk of fraudulent transactions. Since verification is required before a transaction is made, businesses will encounter less large-scale fraud. Furthermore, even when a biometric card is lost or stolen, it cannot be used by anyone else, even via contactless, since fingerprint authentication is required to verify the transaction.
With all of these benefits and so few drawbacks, contactless cards combined with biometric identification can easily lead to a society that has little or no reliance on cash transactions. This has the potential to improve transaction quality, reduce transaction length, increase revenues, and reduce fraud and theft. It is a win-win for consumers and businesses.
Accepting contactless payments allows businesses to help facilitate the promotion of a cashless society and reap the rewards associated with it. Loss adjustments alone are expected to be significant, providing businesses with opportunities for growth and the implementation of additional and more secure technologies to benefit their consumers.
The previous post in our series on a cashless society considered how businesses can leverage biometric identification to promote a cashless society.