What Is the Difference Between POS and Contactless Payments?

Contactless payments provide customers with a quick and easy way to purchase through modern point-of-sale (POS) systems. With a simple tap or hover of a card or device, transactions are completed without the need to insert the card or enter a PIN.

Although both systems operate the same way in banking, the tap-to-pay method offers an edge in speed and ease of use, making it an ideal hassle-free quick transaction option.

Here, we’ll explain the difference between POS and contactless payments, how they work, why contactless has become the go-to choice for many shoppers, and why it’s valuable for your business.

Understanding the Key Differences in How POS and Contactless Payments Are Used

The way we pay for goods and services has evolved significantly. Modern contactless payment options now complement traditional POS systems. While both methods offer reliable transaction solutions, they differ in several key areas.

• Convenience and speed: With contactless payments, customers can pay with only a tap or hover, skipping PINs and signatures for smaller transactions. On the other hand, traditional POS systems often involve extra steps, like entering PINs or inserting cards, offering a more familiar process for those who prefer it.
• User interaction: Customers interact with each system differently. Traditional methods involve swiping or inserting cards, while tap-to-pay eliminates extra steps and completes transactions in seconds. This shift delivers a faster, more intuitive experience, saving time and eliminating unnecessary steps.
• Security features: Both systems prioritize secure transactions, but contactless goes further with encryption and tokenization to safeguard sensitive information. Equinox Payments’ retail POS systems, including the Luxe product line, are designed to support these advanced security features, ensuring safe and reliable payment options for customers and businesses.
• Adoption and technology: Tap-to-pay is a cutting-edge payment method, while traditional systems are valued for their well-established reliability. Traditional POS systems remain a standard that is valued for their familiarity. Together, they equip businesses with versatile solutions to meet shifting customer expectations.

POS vs. Contactless Payments

What Are Some Examples of Contactless Payments?

Contactless payments have become a go-to choice, and you’ve likely used some of these digital transaction options, commonly known as digital wallets, yourself:

• Apple Pay: Available on Apple devices, this system combines security and ease of use, supporting quick payments at retail stores and within apps.
• Google Pay: A top choice for Android users, Google Pay offers straightforward payments across physical stores, apps, and websites while integrating with other Google services.
• Samsung Pay: Samsung users can access this feature by swiping up on supported devices and tapping their phone against a payment terminal. Unlike many others, it also works with magnetic strip terminals, making it compatible with almost any credit card reader.
• Tap-to-Pay cards: These credit and debit cards feature embedded contactless technology, allowing fast, secure payments at most terminals without needing a device.

These examples highlight the accessibility and flexibility of such payments, making them an essential part of modern commerce.

How Contactless Payments Operate Through POS Systems

Touch-free payments rely on advanced technology to securely transfer data between a payment device and a terminal. When the devices are within close range, they enable touch-free payment transactions. Contactless POS systems achieve this through the following methods:

• Near-Field Communication (NFC): This technology enables secure, short-range communication between the POS terminal and a payment device, such as a card or smartphone, requiring close proximity to complete the transaction.
• Radio Frequency Identification (RFID): It transmits payment information over a slightly longer range and is widely used for identification and secure payments.
• QR Codes: A simple yet effective method where customers scan a unique code with their mobile device to finalize the payment. Its ease of use and minimal hardware needs have made it increasingly popular.

Adopting these methods enables you to reduce checkout times and build customers’ trust through secure and versatile payment solutions.

Contactless Payments in Numbers and Why They Matter

In the U.S., more and more consumers choose contactless payments for their daily purchases, from grocery runs to morning commutes. According to a Mastercard survey, over half of American shoppers use contactless payments, and 38% prefer this method when shopping in retail stores. 

Younger generations, especially Gen Z, are leading the shift. They are three times more likely than older age groups to use alternatives like tap-to-pay, with 39% calling PIN entry a pain point compared to 29% of older shoppers. Visa also reports that one in every 10 transactions made with Visa cards in the U.S. now uses contactless technology.

But popularity isn’t the only reason retailers should adopt contactless payments—it’s also about meeting customer expectations and improving their experience. As a leader in payment solutions, Equinox Payments provides innovative POS systems that make it easy for merchants to offer secure, efficient, and customer-friendly contactless options.

How Can Retailers Start Accepting Contactless Payments?

Setting up contactless payments is straightforward, especially if you already have an EMV-ready POS terminal. Many of these devices come with built-in NFC technology, allowing you to accept contactless transactions without additional hardware.

Countertop POS Terminals

When upgrading or purchasing a POS terminal, confirm it includes NFC capabilities for contactless payments. Most NFC-enabled terminals can also process mobile wallets, smartwatches, and other devices. If you’re transitioning to EMV chip technology, enabling contactless features ensures your business stays current and ready for evolving payment trends.

Using a POS system like the Equinox Luxe 8500i or Luxe 8700x, with its integrated payment processor and support for EMV and NFC contactless technology, makes it even easier to keep up with new payment methods and seamlessly meet customer expectations.

Mobile POS Systems

Contactless payments go beyond the counter, enabling transactions anywhere in your store. Mobile POS systems like the Luxe 6200m, with its modular design and support for wireless connectivity, allow staff to process payments wherever customers are, removing the need for traditional checkout lines.

Handheld terminals are a great choice for this flexibility, offering a faster, more convenient way to enhance the shopping experience and keep up with customer demands.

How to Choose the Best Payment Processor for Tap-to-Pay Solutions

With so many options, narrowing down the right payment processor for tap-to-pay can feel overwhelming. Consider these factors to find the best fit for your business:

• Customer support: When technology fails, quick solutions are essential. Select a provider like Equinox Payments that prioritizes responsive support and comprehensive resources. This will ensure that you can easily navigate the system and resolve any issues that might arise.
• Integration with tools: Besides processing payments, ensure the platform connects with tools like accounting or payroll software. Proper integrations save time and simplify tasks like managing finances and taxes.
• Omnichannel compatibility: The platform should seamlessly connect your channels if you sell online and in-store. Look for a processor that syncs inventory and transactions to keep your operations organized.
• Data insights: Strong reporting tools help you track performance, spot trends, and make decisions that drive growth. Choose a processor that provides clear, actionable analytics to guide your strategy.

With the right insights, you can boost sales and unlock new revenue stream opportunities.

POS vs. Contactless Payments: Key Takeaways

Tap-to-pay methods offer unmatched speed and ease of use, completing payments in seconds without requiring a PIN or card insertion. While POS systems remain a reliable standard, contactless options offer modern convenience and cater to evolving consumer expectations.

Both systems ensure secure transactions, but contactless payments add layers of encryption and tokenization for enhanced safety. With NFC-enabled POS terminals, you can quickly implement contactless options to meet customer demand and improve the shopping experience.

Looking for a payment processor that handles contactless, in-store, and online payments while helping you grow revenue? Explore Equinox Payments’ innovative solutions to see how we can support your business’s continued success.