Definition: Contactless Payment

What is contactless payment?

Contactless payment refers to digital transactions that can be completed by simply bringing a payment card, phone or portable device to a terminal. Unlike the traditional contact-based payment method, contactless payment works on the tap-and-go principle and doesn't require a card to be inserted into the payment terminal and swiped.

Contactless payment is becoming increasingly popular worldwide because it saves time and enables faster and more efficient transactions than the traditional contact-based payment method. By simply tapping the payment device or scanning a QR code, the payment process can take just a few seconds, reducing waiting times at crowded checkouts. Customers also benefit from the ability to pay with their smart device instead of having to carry physical cards. The tap-and-go experience is very convenient for on-the-go purchases and can also incentivise increased spending as impulse purchases are easier to make. In addition, contactless payment methods such as encryption and tokenisation offer greater protection against fraud than contact payment methods, where there is a risk of card skimming.

As contactless payments become more popular with consumers, merchants are incentivised to use this technology to drive customer loyalty. A growing majority of customers clearly favour seamless and contactless payments in-store. According to Visa's Consumer Payment Attitudes Study 2022, 93% of consumers in Southeast Asia use multiple cashless payment methods, and nearly four in five plan to use them more frequently. Offering consumers their preferred contactless payment method encourages them to visit the shop again and continue their spending — a mutually beneficial arrangement for businesses and consumers.