Cashless vs Contactless
Contactless and cashless technologies have had a great boost recently due to the need to reduce the exchange of cash due to the pandemic that the world is experiencing in 2020. However, being relatively new technologies, it is easy to get both terms confused And, therefore, businesses can make the wrong decisions regarding which one is best for them to implement according to their company’s line of business and their intrinsic needs.
Well, despite sounding and looking the same, each of these technologies has its own characteristics that can benefit or even harm businesses as the case may be.
Cashless payments, as its name says in English means cashless, that is, they are devices that are tied to some type of bank account or even some are recharged with cash that allow making payments without using money in currency or paper . People with this new system can use it to make all kinds of payments and services within authorized establishments, which allows businesses to better understand the consumption habits of their customers, and thus generate Big Data that helps them make correct decisions in the future.
On the other hand, contactless payments are those that allow payments to be made through systems that do not require physical contact between the devices intended for this, such as credit, debit or even cell phones with the point of sale terminal, since it is only enough to bring the device closer to the terminal to make the payment. In fact, it is estimated that, by 2022, 58% of payments will be made through this system in regions such as Europe, the United States and Canada.
This type of option is possible thanks to NFC (Near Field Communications) technology, since they emulate the magnetic stripe of the cards by generating an electromagnetic field that allows the exchange between devices or even RFID, that is, via radio frequency. In this particular case, the companies do not have the data directly, since these are sent to the issuing bank of the device, which does not allow a knowledge of the consumer’s habits. It should be noted that all contactless payments are cashless, but not vice versa.
Due to the recommendation of the WHO to reduce cash flow, both technologies have acquired a much greater boom since, in addition, they reduce the physical contact between operators and customers. On the other hand, it is very convenient since any company or business can be digitally transformed by hiring a POS (Point of Sale Terminal) integrated with contactless technology from a financial institution or a POS to manage cashless payments and a device with NFC technology as recognition of the user.
