Impact of Contactless Payment on Retailers - Literature review Example

Impact of Contactless Payment on Retailers Name: Course: Institution: Date: Impact of Contactless Payment on Retailers Introduction The main objective of this literature review process is to provide an in-depth analysis on the effects of contactless payment on the retailers. Through an analysis of existing books journals and publication, the literature review process will assess the impact of contactless payments with regard to security, customer requirements and resource implication for retailers. Impact of contactless payments on retailers Security According to Ryan (2012, p.1), the popularity of contactless payment emanates from the understanding that it is a relatively faster, convenient, easy and secure way of making payments and acquiring products and services. The fast and easy nature of using this technology is because for consumers they only need to touch their contactless cards against a reader to enable instant payments. This means that customers do not need to find or carry cash but they can keep track of their purchases on a banking application or statement. According to Ensor (2012, p. 16), despite the perceived success and efficiency of this device with regard to increasing the levels of customer satisfaction, there are security concerns in the use of contactless payments. this is because the use of personal identification number (PIN) it is possible for an individual to engage in theft of a contactless card and make payments without the authority of the owner so long as they have knowledge of the PIN (Ryan 2012, p.1). However, for retailers, compared to the use of cash, contactless payments use the Chip and PIN as effective measures of protection the customer and the retailer for theft (Ryan 2012, p.1). Retailers hold little cash as most of the transactions are handled directly from the bank. For the customers and retailers, contactless payment facilitates the reduction of the burden emanating from handling large amounts of cash within their business premises (Ryan 2012, p.1). Flower et al (2013, p.12) assert that additional security measures taken by contactless payment in handling theft of cards and fraud related possibilities include the introduction of a transaction limit. Through this limits, the retailer has the ability of regulating the number of purchases that a customer makes. Furthermore, there are also limits to the number of contactless transactions that a customer can make before being asked provides the PIN. Customer requirements For customers contactless payment is considered as effective and reliable alternatives in accessing products and services from different retail outlets. For customers, the adoption of this approach to making payments requires some form of registration, which will provide the banking facilities with the authority of registering the customer for the services (Lerner 2013, p. 6). For customers, the registration process is not only to meet the necessary security measures but also to ensure that they acquire satisfaction by engaging in contactless transactions. Through the built level of protection in the contactless process, the retailer has the ability of verifying that the valid cardholder is making payments. This explains why contactless cardholders will occasionally be asked to sign or provide their PIN (Lerner 2013, p. 6). There is the alternative of making contactless payments through smartphones. In this situation, customers often have different levels of verification within the applications. These are used in authenticating their identity before proceeding to execute a contactless payment (Hendry 2014, p. 32). The challenge for some of the retailers when handling customers is in the proper use of contactless cards. This is because any presentation of more than one card or an additional device together with the card often interferes with the terminal and the entire payment process (Roebuck 2011, p. 3). For instance, it is possible for the customer to be holding a purse or wallet with more than one card inside or have an activated smartphone next to the card reader. In such situations the card reader my decline to perform the transaction while demanding the presentation of a single card. This is the problem of card clash and it is a requirement among retailers to ensure that their customers are trained on the process of executing transactions (Roebuck 2011, p. 3). Resource implications for the retailer For contactless technology to improve with the nature of retail business and customer satisfaction, The UKCards Association (2014, p.6) asserts that it is important for the retailer to invest in training their employees on handling different issues retiled to this mode of payment. Staff training is one of the major areas of investment. This form of training will be important in proving the employees in retail businesses with information on how to help customers use this mode of payments. According to Slawsky and Samee (2015, p. 6), the growth and expansion of the use of contactless payment among customers means that it will increasingly become one of the most popular payment alternatives. To solve the problems of long queues within the contactless payment terminal, employees must be trained on self-propagating initiatives that will enhance speed of transaction and through the reduction of the time consumed in queues when making payments. According to Ryan (2012, p. 1) for the employees, training will be in the provision of information on the basics of contactless payments such as the maximum transaction limit, and the security measure involved. This is based on the realization that the employees play an essential role in enhancing the comfort and trust levels of making payments through this mode. An additional resource implication for contactless payment lies in the need to invest in a card machine that has the ability of taking contactless payments. This will involve the process of acquiring the machine and contacting the payment providers to enable effective working of the machine (Worldpay 2014, p. 1). For the retailers in the view of Worldpay (2014, p. 2), an investment in contactless payment will also require the consideration of essential security measures aimed at protecting their customers from fraud and theft related activities. This means that these retailers must invest in security identification machinery, which will improve in the confidence levels mong customers while reducing the risk of customer loss. References Ensor, Benjamin. 2012. Why Contactless cards Aren’t Taking Off in the UK. Channel Strategy Professionals. http://blogs.forrester.com/benjamin_ensor/12-10-05-why_contactless_cards_arent_taking_off_in_the_uk Essvale Corporation Ltd. 2013, Business knowledge for IT in retail banking: a complete handbook for IT professionals. London: Essvale Corporation Ltd. Flower, Graham., Fawcett, Phill and Harle, Stuart. 2013. Banking: In Search of Relevance: A New Model for a New Reality. Oxford University Press: Oxford Hendry, Mike. 2014. Near field Communication Technology and Applications. Cambridge University Press: Cambridge Lerner, Thomas. 2013. Mobile Payment. Wiesbaden: Imprint: Springer Vieweg. Roebuck, Kevin. 2011. Contactless proximity cards: high-impact strategies - what you need to know. [Place of publication not identified]: Emereo Pty Limited. Ryan, John. 2012. How Will the Contactless Payment Threshold Impact Retailers. London: Retail Surgery Slawsky, Jeff H., and Samee Zafar. 2015. Developing and managing a successful cards business. Aldershot: Gower. The UKcards Association. 2014. Guide for Retailers: Accepting Contactless and the Higher Value Contactless Payments. The UK Cards Association’s website Worldpay. 2014. Contactless Payments Made Easier: What Every Small business Needs to Know. www.worldpay.com Read More