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Providing customers with the right payment method can sometimes mean the difference between paying with a business and switching or going to a competitor to shop elsewhere.
It is therefore important for businesses to know the different payment methods available to them and the contexts in which they are used, as well as how these methods fit with the opportunities out there.
“Determining whether or not to accept scanning at a point of sale is a strategic decision that has less to do with technical differences and more to do with trust,” said Mike Breuer, CEO of Zapper. He was speaking at the Payfast eCommerce Virtual Summit from March 14 to March 15, 2023.
Understanding the security risks of the two payment methods requires knowing how each payment method works. Brier explains:
The token attached to that card is transmitted over the air to the trusted device’s near field communication (NFC) system, which aims to operate within 4cm of a card machine or PIN entry device.
Between the two devices, the trusted device communicates with the bank and can then determine whether a challenge response is required. This is if you are not sure where the transaction will take place or the location itself seems unusual.
Want to start accepting card payments from your Android phone, but need help figuring out where to start? Tap to pay on the Zapper Merchant app and accept payments from NFC-enabled cards and devices. https://t.co/m2EhDaGaSX#taptopay #fintech #nfctechnology pic.twitter.com/p6uWq6BLTm
– Zapper™ (@ZapperTM) February 3, 2023
In this case, the card token is activated by the security of the Apple or Android device, using the same biometric or PIN as the payment experience, and finally the trusted device (in this case a mobile phone), connects to the banks. If they feel there is any risk associated with that particular transaction, they will need a proactive response, which includes 3-D-Secure authentication in scan-to-pay transactions. In this case, banks trust the mobile phone device instead of trusting the card acceptance device.
Assess the risk profile
“The question is, which device should we trust?” asks Breyer. “Is it our own phones that we only control, or the mechanized card acceptance device that is handled by multiple individuals throughout this entire value chain?
In the latter case, there is software installed on the device – from the time the software is installed until it is delivered to the dealer – for that software to work and change, and if it is in the store at the same time. One can take a different view that is more trustworthy.
“Mobile phone security is highly accepted by banks, allowing you to make transactions across all your accounts, whether it’s a credit or debit card linked to a checking or savings account. The mobile phone is inherently trustworthy,” he said.
“Also, during the scan to pay the transaction, the mobile device itself transmits certain identifiers, which allows the service to determine what the device is and who is using it. Therefore, the overall transaction has a high level of trust until the end.”
“The issuing bank has real control, so if the bank isn’t completely happy with a scan to pay for the transaction, there might be a second verification step to make sure the user who issued this card is it. They’re going to require a PIN on the device, or they’re going to want some sort of 3D secure response.”
The question is, does it matter which device is sending the details to the banks? Is the risk profile of each really different?
“Given that identity theft can happen equally to both pay and scan to pay, the risk profile of both payment methods is very similar, if not identical,” Brayer asserts.
Your safety is our priority. Be confident when paying knowing that your card details are encrypted and your payments are protected by your own unique PIN and biometric verification.
Not a Zapper user? Download the app and get started today – https://t.co/KWCnPyw75F pic.twitter.com/vemzJ2dCml
– Zapper™ (@ZapperTM) February 1, 2023
User experience promotes security concerns.
“At the end of the day, the real issue is the user experience and the way payment is made,” Breuer continues.
It designs different scenarios where users can choose one or the other payment method.
“If a user goes for a run and then joins friends for coffee, there’s no doubt in my mind that tap-to-pay wins in that situation, especially if he or she is wearing an Apple or Garmin watch.
“The ability to extend the service to wearables is the biggest advantage of paying with a tube. This card payment is not only very convenient, but also brings a “cool” feeling. I have no doubt that we will add technology to it in the near future. It will be a fist-pump to pay the bill.”
“If someone is in a shopping mall scanning to pay, it works where someone wants to pay for parking.
“Alternatively, if a businessman is eating at a restaurant with colleagues, he may make an ego-driven decision to pay using his new black credit card. But among friends at a restaurant, scanning a QR can be faster. Code on the bill and then have access to more value-added .
“In this case, the checkout platform calculates the tip and gives you the option of splitting the bill with your spouse. It works great when you have to make a decision to enter a promo code.”
“From an e-commerce perspective, when you buy from Takealot and make a credit card payment, you certainly can’t tap to pay, but you can scan to pay.”
Both payment methods have a role to play in the payment landscape in SA, stresses Brier. “At the end of the day, it makes it incredibly important for marketers to embrace both. The role of scanning to pay and scanning to pay applies in many different situations. And while there are risks to using both, implementing them. Make sure your business sees more growth in sales.”
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