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Beyond cards and cash: The new world of customer payments

Drew Turney
Technology Journalist

Drew Turney writes about technology, science, film, books, pop culture and the crossroads between any or all of them

Drew Turney
Technology Journalist

Drew Turney writes about technology, science, film, books, pop culture and the crossroads between any or all of them

  • Small businesses can use e-commerce platforms to manage online and in store transactions.    
  • Digital wallet services can provide an effective marketing channel allowing you to office discounts to customers while they’re in store. 
  • Near –field communications systems can make it easier for customers to pay and go. 

New embeddable technologies and connectivity has enabled everything from contactless payments to using PayPal to buy a T-shirt or coffee. But without buying and deploying a new system for each one, how do you stay on top of them all?

The idea that the customer is always right is an old adage, but it’s never been truer than when it comes to new payment methods.

Our compatible smartphones and tablets are the endpoints for a rich new universe of payment choices for customers. An e-commmerce can be an all-digital sales platform that you can use both in-store and online to handle transactions and help keep records across every sales channel.

Many new systems rely on near-field communications (NFC), a communications protocol that lets compatible electronic devices in close proximity exchange information. Instead of having a magnetic stripe or chip, newer-style debit or credit cards can be held a few centimetres from the payment device, rather than being swiped.

When the information from the debit or credit card is transmitted to the POS machine, it can connect with a universe of other networks like bank accounts, card numbers and reporting, potentially making payments even easier for customers.

A customer using a credit card on a tablet in a store.

Tablets for smart waiters

Using tablets and screens to order and pay is getting popular in many restaurants and cafes. Their obvious advantage is that they cut out some work, because staff members no longer have to ferry bills and payment cards across the floor for every customer. There’s an improved experience for customers too, who no longer need to get up and pay at a counter. 

Stanley Martone of Castello Pizza, in the US state of Connecticut, says using tablets has given him an edge over nearby competition. “We’re able to accommodate customers from any part of the restaurant, from the main dining room or the patio, and we also use them for managers to easily monitor employee shifts, sales reports and inventory from anywhere with an internet connection.”

Of course, in Australia we’re famous for being early adopters both as consumers and small business operators, so you’re likely to find cafes and shops in your local area who offer similar tech-savvy payment methods.

If you can’t afford a whole fleet of tablets for your premises, systems such as TableSafe RAIL let staff deliver a small screen device encased in the bill folder. The customer can pay using their credit card or PayPal and keep account numbers and details completely private. TableSafeRAIL is not available in Australia yet, but is currently eyeing international expansion. 

Robert Frost of Emory’s Bar & Bistro in Everett, north of Seattle, says RAIL has made his eatery more efficient, because they can turn tables over faster.

“It’s made our bookkeeping process much easier,” he adds. “We’ve been able to reduce our paper costs, since receipts can be emailed using the device. We wanted to be out in front of the chip card technology and ensure we had an elegant way to accept this form of payment.”

Although he says there’s been a slight learning curve for older customers who aren’t digital natives, knowing the customer’s credit card information is secure gives both him and the bistro patrons more peace of mind.

For smaller or mobile businesses, systems from providers like SquareUp have been popular for a few years. You’ve probably seen the little magstripe Square reader you plug into a tablet or smartphone. 

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Hands-off credit cards

Contactless payments took off when providers including Visa, American Express and MasterCard launched their own systems. It was considered by the companies providing the service that the security was industry leading, with standard-setting encryption and authentication technology. And it meant customers could make transactions anonymously, because the cardholder’s name isn’t recorded. In fact, unlike magnetic stripe cards, the means of payment never left their possession.

But such ease of use can be reverse engineered. With no manual step like inputting a PIN or signing, an appropriately equipped hacker can hold an NFC reader close to a card and perform an unnoticed payment. The risk isn’t just for customers, but for business owners who may carry multiple credit cards with linked accounts. In South Australia, police have reported a rise in handbag and wallet thefts, with thieves targeting contactless payment cards. They suggest people should treat their contactless cards as being as valuable as cash. 

The digital wallet

Closely related to contactless payments are the digital wallets offered by the likes of Google. They’re just like the accounts you hold to buy music apps in Google Play, except the apps let customers pay using NFC technology on a smartphone.

Combined with geo-location data, digital wallet services can be an effective marketing channel, letting you issue discounts or other inducements to shop while your customers are in store or passing by.

The big players will have us believing their systems are safe, and if you use a fingerprint or PIN authentication that may be – but in that case you’re effectively using magnetic-stripe-era security measures.

But NFC still transmits data that can be intercepted. Although the gateways that separate customers’ card numbers and financial information from the software and servers are complex, it’s probably still a matter of when – not if – the big companies will get hacked.

Plus, if you lose your phone without realising, someone has your account at their disposal. And as several high-profile hacks have proven, no system is perfect.

New pitfalls

Step one when adopting any new payment technology is to make sure you fully understand the fee structure. Hidden costs might be included in complicated fee structures.  

In order to spend the least amount of time, training and money on deploying these new payment gateways, find a consolidated system that can handle most of the new style payments you’ll potentially receive.

An informal poll of customers about the payment methods they’d like to use might be quite enlightening. We’re already comfortable buying online using PayPal, for example, so many people would consider it a natural progression to use it in the offline world.

Giving them the opportunity to do so might be your first step into a whole new market.

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