The way Brazilians interact with payments has changed significantly in recent years. Nowadays, financial transfers take only a few seconds without needing touch or physical devices. This is all thanks to contactless technology, widely called "proximity payment."
The agility, innovation, and convenience of this payment method have contributed to its popularity, even though it first appeared more than 15 years ago. Using Near Field Communication (NFC) technology, the financial transaction takes place automatically without the device having to touch the machine.
In this article, you will learn about the types of contactless technology and its benefits.
When contactless technology made its debut in Brazil
Contactless technology was introduced in Brazil in 2008 but gained popularity during the coronavirus pandemic. Due to hygiene measures, contactless payment became an alternative because it doesn't require physical contact.
By 2022, Brazilians were making approximately 30 million proximity payments per day. The total number of purchases increased by 185.6% compared to the previous year. In 2023, proximity payments totaled more than R$570 billion, according to the balance sheet of Abecs (Brazilian Association of Credit Card and Services Companies).
Types of contactless payment technology
The options for making financial transactions have expanded with today's innovative devices. Mobile payments and smartwatches are some of the contactless payment options. Check them out below.
QR Code
The payment by QR code is mainly used for the bank transfer via PIX. The ease with which a mobile phone camera can scan it has led to the widespread use of this payment method. Service providers and commercial establishments can use the QR code in printed form to disclose their payment details.
IoT Devices
Contactless payments are made with a physical credit card. However, the same card can also be used virtually through digital wallets on smartphones and smartwatches, as long as they are linked to the card data. Thus, you must bring the devices together to debit or credit the payment to the registered card.
Facial recognition
The trend in contactless financial transactions is using the user's data for payment, as in the case of biometrics, where only physical characteristics are required to validate a transaction.
With facial recognition, payments can be made using your face, eliminating passwords and the need to carry wallets and cards. This technology is being implemented in Brazil and promises to generate $9.8 trillion by 2026.
Some retailers, such as C&A, already use biometric totems for payments. Customers must connect their digital wallet to the company's network and validate their face to pay. This makes it possible to walk into any store and purchase without needing a mobile phone or other physical device.
Benefits of contactless
Besides variety, contactless offers other benefits to merchants and consumers. These include:
Agility: contactless technology is ideal for those who want to make the most of their time, as it significantly reduces queues due to the speed at which transactions are processed compared to traditional means.
Convenience: the technology eliminates the need to use cards with passwords, avoids Internet issues, and eliminates the need to carry cash or a wallet.
Data protection: proximity payment avoids storing customers' passwords and personal data and is more secure than card insertion. With facial biometrics, for example, the user's personal information is even more confidential.
Security: every contactless transaction is encrypted, which prevents banking information from being shared, increasing security and preventing fraud. For example, setting transaction limits helps prevent fraud.
To further enhance the security of contactless payments, combining other validation methods, such as password authentication or biometrics, is possible.
How contactless payments work
For contactless payments to work, the machine and the device validating the purchase must have NFC technology. The device must be at least 2 inches from the machine to pay. Depending on the local internet connection, the machines complete the transaction in up to 5 seconds.
There are other ways to pay, such as using a QR code, which requires a phone camera. In these cases, the reading distance may be longer.
Contactless Technology: innovation in payment
This article discusses the definition of contactless and the types and benefits of the technology, including convenience, agility, and privacy. We also discussed the main types of payment methods used and the innovations that are coming.
In addition, we found that retailers already enjoy proximity payment benefits. The trend is for secure and agile checkout payment methods to be offered to all businesses.
