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'Tap’ payments: What you need to know

By Danielle van Wyk

The banking services industry has seen a surge of innovation in the last decade, the latest being the ‘tap’ payment method. This allows consumers to make use of contactless payment technology, and according to First National Bank (FNB) consumers are lapping it up.

“Contactless refers to cards that have a Near Field Communication (NFC) antenna built into the plastic card and is able to be “tapped” or presented in close proximity to an NFC enabled Point of Sale (POS) Terminal to conclude a purchase payment within seconds,” stated head of payment acceptance at Absa Retail and Business banking, Aldo Laubscher.

This method creates a convenient and secure payment environment for both customer and merchant, said Gareth Rimmington, head of operations at FNB Credit Card. 

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Advantages of Tap payment method

“The current perception is that contactless payments are for small ‘on-the-go’ amounts, but in reality the tap functionality is available for high value amounts and the customer would merely have to enter their card pin to verify larger amounts. However, some retailers may have their own limits,” added Rimmington. The Absa contactless enabled cards for example have a limit of R200 or less, “There is currently a limit of R200 in place for such purchases without the terminal requesting a PIN, above R200 a PIN is requested after the “tap”,” Laubscher explained.

The adoption of new payment technology is almost always accompanied by a degree of scepticism but this is where customer education plays an important role to ensure there is a level of comfort, added FNB’s Rimmington.

There is the realisation that embracing anything new when it comes to money management is always a risk, but Laubscher, shares why it needn’t be:  

-Contactless payments enables customers who are in a hurry to securely tap and pay for small items without a need to carry cash around.

-It also allows for faster, more seamless payment experiences in a Face-to-Face payment environment.

Which banks offer this feature?

FNB: “All credit and debit cards issued by FNB are now contactless ‘tap’ enabled, meaning that customers are able to securely pay for their goods at merchants without the card leaving their hands. The bank started issuing contactless enabled cards in May 2015 and already has over one million in the market,” explained Rimmington. “If the client card is not contactless they may replace their card and the next card will be contactless by default. A contactless card can be recognised by the contactless symbol (four curved lines) on the plastic.”

While the number of contactless transactions by FNB customers averaged 1.5 ‘taps’ per month in May 2015, this further climbed to an average of 2.5 per customer by January 2017. “Significantly, the number of customers using the technology has risen sharply by 227% in the last six months,” Rimmington added.

Absa: “All new debit cards and credit will be contactless enabled, and all card replacements will be contactless enabled. Should existing customers prefer to immediately migrate towards contactless payments, they can request an early replacement of their cards,” Laubscher highlighted.

Absa introduced contactless payments via debit cards back in 2011 and has since then further expanded its presence to now also include contactless payments on all new VISA credit cards, with Mastercard credit cards to follow shortly.

Nedbank: Nedbank is currently rolling out contact less cards to its client base in phases. “So all new cards have contactless payment capability, and when clients request a new card, it will be enabled as well, as all new POS machines have the functionality” iterated Tobeka Lwana from Nedbank Group Communications.

Where can you use the ‘tap’ payment method?

According to FNB: “For merchants, contactless ‘tap’ payments make a big difference in terms of queuing time as payments are faster. These types of payments are finding wide adoption both nationally and internationally, so we can expect the payment space to continue to evolve rapidly as new technologies are developed.”

“In South Africa there’s generally a healthy uptake of this functionality from merchants, and consumers can now use this method of payment in many stores, particularly when paying for low amounts,” Lwana added.

Absa merchants enabled include, PnP & Mr Price, and they are currently in conversation with some of the other large retailers. “From a merchant perspective we will offer it via most of our Merchant Accounts.  Currently already live for Large Retailers like PnP & Mr Price.  Transport operators such as MyCity Cape Town, Rea Vaya in Johannesburg (and soon Tshwane) also offer contactless payment via tap-and-go to commuters making use of their services,” added Laubscher.

“Globally, a lot of innovation is taking place in this space. Contactless payments via face-to-face “tap-and-go” is not a destination, but rather another stepping stone in the perpetual evolution of payments,” Laubscher concluded.

*Both Standard Bank and Capitec were contacted but failed to comment at the time of publication.

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