Contactless Payments: What Business Owners Need to Know in 2025
Remember when contactless payment was a novelty? Customers would pull out their phones to pay, staff would look puzzled, and the whole interaction would take longer than a traditional card swipe. That era is over. Today, tap-to-pay is the expected default for a significant and growing portion of consumers—particularly in the under-45 age demographic that represents the largest purchasing power segment in most markets.
We see the numbers in our clients transaction data. In 2022, contactless represented maybe 15-20% of in-person transactions for the average merchant we work with. Today it typically exceeds 40%, and in certain verticals—food service, health and wellness, specialty retail—it is the majority of transactions. The customers leading this shift are not going back.
What Contactless Actually Means
Contactless payment encompasses two distinct technologies that look identical to the customer but work differently. NFC (Near Field Communication) is the technology behind tap-to-pay cards and digital wallets—Apple Pay, Google Pay, Samsung Pay. When a customer taps their phone or a newer physical card to your terminal, NFC handles the transaction.
The second technology is QR code payment, where a customer scans a displayed code with their phone camera to initiate payment. This approach is less common in the U.S. for retail transactions but growing in specific contexts like table-side restaurant payments and digital invoice settlement.
Both approaches share important characteristics: they complete faster than chip or swipe transactions, they generate tokenized transaction data rather than raw card numbers (improving security), and they require minimal physical contact with shared equipment.
The Security Advantage You Can Explain to Customers
When customers pay with Apple Pay or Google Pay, the transaction does not transmit their actual credit card number. Instead, a device-specific token is used for the transaction. Even if your payment system were somehow compromised, the tokenized data from contactless transactions cannot be used to recreate a working card number.
This is a meaningful security improvement over magnetic stripe transactions and even a step beyond traditional chip EMV payments. Customers who understand this often prefer contactless specifically for security reasons—not just convenience. Being able to explain this to concerned customers positions your business as security-aware.
What Equipment You Need
Accepting contactless payments requires a terminal with an NFC reader—the antenna that detects the card or phone signal. Most terminals manufactured in the past four years have NFC capability built in, though some processors ship terminals with NFC disabled and require a settings update to activate it.
If you are running equipment that predates widespread NFC adoption, the upgrade is worth doing on its own merits. Older terminals also lack support for the current security requirements, carry higher fraud liability, and often process more slowly than customers expect.
Digital Wallets Are Not All the Same
Apple Pay, Google Pay, and Samsung Pay all use NFC but have different enrollment processes and user experiences on the customer side. Your terminal handles them identically once enabled. You do not need to configure anything differently for each wallet type—the terminal communicates with whatever digital wallet the customer has loaded on their device.
What differs is what the customer experience looks like. Apple Pay requires face ID or touch ID authentication before payment. Google Pay on Android varies by device. The authentication step, which takes one to two seconds, is actually a security feature—it means only the phone authorized user can complete the payment.
The Checkout Flow Impact
Contactless transactions typically complete in under three seconds. Compare that to chip EMV transactions, which require the customer to insert the card, wait for authorization, sometimes enter a PIN, and wait for approval. The time difference per transaction seems small, but over a hundred transactions daily, the throughput improvement is substantial.
Businesses with lines—coffee shops, quick-service restaurants, convenience stores—often see meaningful throughput improvements after contactless adoption. Faster transactions mean shorter lines, which means fewer customers abandoning the queue.
Making the Transition
Enabling contactless on existing NFC-capable terminals is usually a five-minute process with a quick call to your processor. If your terminals are not NFC-capable, a terminal upgrade is worth including in your next planning conversation with your processor. Most upgrade programs involve minimal cost when bundled with your processing relationship.
Staff training is minimal—contactless transactions follow the same prompts as chip transactions from the employee side. The main coaching moment is ensuring staff do not ask customers to insert their chip when they see someone reaching for their phone to pay.