Flute
You only have a few minutes before your meeting, but it’s your turn to pick up coffee. You drop into a local cafe, place your order, and reach for your wallet — only to realize you left it at home. There’s no time to double back, so you pull out your phone, hold it near the terminal, and in seconds, the payment is done. You grab your drinks and are out the door with time to spare.
As a customer, that kind of payment experience feels effortless. As the coffee shop owner who made it possible, you didn’t just make a sale; you earned a regular.
Consumer expectations are shifting. People are reaching for their phones instead of their wallets, tapping cards instead of swiping them, and choosing businesses that make checkout feel invisible.
Younger shoppers, especially those who’ve grown up with digital payments as the norm, won’t think twice about going elsewhere if a business can’t accommodate how they want to pay. And that’s backed by data: 70% of consumers say the availability of their preferred payment method is very or extremely influential in deciding where to shop.
If you’re a business owner who’s been wondering whether contactless payments are worth the effort, or even what they actually are, this guide is for you. We’ll cover how to accept contactless payments, what consumers expect, the real benefits for your business and your customers, and what they actually cost.
Contactless payments are any transactions completed without swiping a card, inserting a chip, or exchanging cash. Instead, they rely on wireless technology, most commonly near-field communication (NFC), to pass payment data between a device and a reader.
In practice, that looks like a customer tapping a phone or smartwatch near a payment terminal to pay through Apple Pay, Google Pay, or Samsung Pay.
It also includes contactless-enabled credit and debit cards. Most cards issued in the past few years include this feature by default, indicated by the small wave icon on the card’s face. It also includes QR code payments, where a customer scans a code on a screen or printed display to complete a transaction through a mobile app.
Contactless payments are more convenient than traditional methods: the customer taps, scans, or hovers their device, and they’re done. It also allows businesses to accept payments from a much wider range of devices and payment methods than traditional card readers.
Here’s a quick breakdown of the most common types of contactless payments:
The shift toward contactless payments isn’t a trend on the horizon; it’s already the mainstream. Mastercard reported that 70% of all in-person transactions on its network were contactless in the third quarter of 2024, and that number is growing. That means contactless payments have moved from early-adopter territory into everyday use.
Younger shoppers are driving much of this shift; for many of them, using a digital wallet for business and personal transactions is already second nature. Worldpay’s 2026 Global Payments Report found that digital wallets are the most-used online payment method for 39% of 18-to-24-year-olds and 41% of 25-to-34-year-olds. The same report projects that by 2030, $4.1 trillion in U.S. spending will flow through digital wallets, a 64% increase from 2025.
This matters across all industries, not just retail.
Consider a home services contractor who just finished a week-long renovation project. Their customer wants to settle up on the spot, but they don’t have any digital payment options available, so they mail an invoice instead. That invoice takes a week to arrive, only for the customer to then misplace it. Instead of receiving their money on the spot, cash flow stalls, and the contractor has to spend weeks chasing down their payment. It’s not only a bad experience for the customer, but it’s bad for the business, too.
Contactless options solve this problem, allowing the contractor to process the transaction immediately rather than waiting weeks (or months) for their customer to pay a paper invoice.
The data makes it clear what’s at stake. A 2024 Applause Digital Payments Survey found that 76% of consumers are likely to abandon a transaction if they can’t pay the way they want. And research from PPRO found that 42% of U.S. consumers said they’d walk away from a purchase if their preferred payment method wasn’t accepted.
These aren’t customers who reconsidered and came back. In most cases, they went somewhere else.
For growing businesses, there are three places you’ll see the greatest benefits: checkout completion rates, the ability to serve shoppers without adding more time, and more customers.
Fewer abandoned sales: Payment friction is notorious for quietly draining your revenue. When customers can’t pay the way they want, they often don’t say anything; they just don’t complete the transaction. Removing that barrier is one of the best ways to improve your conversion rate without changing anything else about your business.
Faster service: A tap takes seconds. Compare that to inserting a chip and waiting for approval, counting out change, or flipping through a wallet for the right card. For businesses with consistent foot traffic, like cafés or retail stores, that speed adds up fast. Straightforward transactions mean more throughput, shorter lines, and a better experience for everyone.
A broader customer base: Gen Z and Millennial shoppers have strong preferences when it comes to paying for goods and services. Offering the payment options they already use will help you reach more people and build lasting loyalty.
On the other side of the counter, the benefits to your customers are just as tangible. They’re the kind that build goodwill and bring people back.
Speed and convenience: This is what customers feel most immediately. Worldpay’s 2026 Global Payments Report notes that consumers are drawn to digital wallets because they’re fast, safe, and easy to use. A smooth, fast transaction is a small thing that leaves a lasting impression.
Better security: Contactless payments are more secure than magnetic stripe swipes, which surprises a lot of people. NFC transactions use tokenization, so instead of transmitting a customer’s real card number, the terminal receives a one-time token that applies only to that specific transaction. There’s no static data to intercept and no card number to copy, so your customers are protected at every step.
Payment flexibility: Not every customer carries the same thing. One shopper might have their phone, another might have a contactless card, and another might only have a smartwatch. When your business accepts a range of contactless options, customers can pay with whatever they have on hand. That kind of flexibility is easy to offer and hard for customers to forget.
Security is often the first question business owners raise, both about protecting their operations and their customers. It’s a fair question, but fortunately, contactless payments are among the most secure payment types available.
NFC payments use end-to-end encryption and tokenization to secure each transaction. That means when a customer taps their phone or card, the terminal receives a unique encrypted token in place of their actual card information. Because tokens don’t represent specific card numbers, even if that data were somehow intercepted, it would be useless to fraudsters.
Let’s compare that to magnetic stripe cards. The data embedded in a magnetic stripe is static, so it’s the same on every single swipe. That makes it possible for fraudsters to copy data using special equipment, which is why mag stripe card fraud has historically been so common.
NFC-based payments don’t carry that vulnerability.
The biggest fraud risk for most businesses today isn’t contactless transactions; it’s outdated hardware that doesn’t support modern encryption standards. Upgrading to contactless-enabled devices will not only make it easier to meet customer expectations but also help keep your business safe.
Contactless payments, including NFC-enabled cards and digital wallets like Apple Pay and Google Pay, have the same interchange rates as standard chip card transactions, so your rates depend on your payment processor and the type of card being used, not on how the customer pays.
The main upfront consideration is hardware. If your current device doesn’t support NFC, you may need to upgrade. That said, most modern point of sale systems include NFC capabilities as a standard feature, so most businesses just need to enable the functionality rather than buy new equipment.
For businesses looking to reduce costs even more, zero-cost processing programs allow you to accept all payment types without dealing with processing fees. When set up correctly, these programs compliantly shift the cost to customers who choose to pay by card, keeping your margins intact regardless of how they pay. With the right provider, that can mean offering more flexibility while spending less on processing.
The way people pay is constantly changing. Consumers (especially younger ones) are making decisions about where to spend their money based in part on whether a business offers the payment experience they’re used to. That’s a real consideration, and one that growing businesses can’t afford to ignore.
When you make it easy to pay, you make it easier for customers to choose your business over someone else’s.
Flute makes contactless payments simple. With transparent pricing, NFC-ready hardware, and built-in zero-cost processing options, our platform is designed for growing businesses that want powerful payment tools without a high price tag or complicated setup.
Getting started is easier than you think. Talk to our team, and we’ll find the right setup for your business.