Contactless payments: how they work
14/04/2022While NFC contactless payments have been widely adopted by physical retailers, QR Code payments are a local and cross-border e-commerce trend.
A few years ago, credit and debit card purchases could only be made in person. In addition to swiping or inserting your card into a machine, you also had to manually sign a paper receipt. This is simply unthinkable in 2022, a year after contactless payments grew 385% in Brazil.
The Brazilian payments market is making great strides forward alongside proposals on the AgendaBC# to make finance more democratic – this is the Central Bank of Brazil’s (BCB) strategic plan to increase financial welfare in Brazil. One of the AgendaBC#’s most successful projects is Pix, an instant and contactless payment system broadly adopted by Brazilians.
What are contactless payments?
Like the name says, contactless payments are when two compatible devices – a contactless card and payment terminal – come into close range. This is a very secure payment method even though it doesn’t require a password: a unique token is generated for each transaction, the data transmission is encrypted and the terminals do not record and client information.
Brazilian consumers have already embraced this very practical solution. According to the Brazilian Credit Card and Services Companies Association – Abecs – this type of payment grew 384.6% in 2021. A total of R$ 198.9 billion in purchases were made using this system. Abecs estimates that a quarter of in-person credit transactions use contactless, a number expected to double by the end of this year.
Contactless payments: mobile and NFC technology
NFC (Near Field Communication) contactless payments are not exclusive to magnetic cards. The radiofrequency function works provided both devices are between 2 and 10 cm apart. The range of devices mainly includes smartphones (using applications like Samsung Pay, Apple Pay and Google Pay) or wearables like watches and wristbands.
QR Code payments: fast and secure online payments using Pix
Pix was launched in 2020 and has revolutionized the purchasing experience, encouraging many Brazilians to leave credit and debit cards out of their wallets. So far, Pix has 122 million users, equivalent to 57% of the Brazilian population. The Pix differential is that it is an instant payment system: the payment arrives in the recipient’s account in seconds, whichever bank they use.
New features are gradually being incorporated, such as QR Code Payments. This is one way of making Pix payments even more convenient – as it doesn’t require keys – and an especially good match for e-commerce businesses, which includes fraud mitigation, which mainly targets cards.
Trends: ecommerce and QR Code Pix
Consumers have a complete purchase experience using Pix QR Code when using a desktop. This is because they need to access their bank’s app on their smartphone at the same time and select the “pay with QR Code” option. The device camera automatically opens: simply point it at the Pix QR Code on the checkout screen and conclude the payment.
If the purchase is being made on mobile, the best Pix payment option is “Pix Copy and Paste”, which reduces the chance of a mistake when typing in the key and speeds up conversion.
When using Pix for companies, the process will depend on the number of requests and the need for automation. For smaller e-commerce businesses, it could be easier to manually generate a Pix QR Code using the bank’s app. However, to guarantee a fluid process, e-commerce businesses should ideally incorporate a payment API that offers the Pix payment method.
Stay abreast of e-commerce trends in Brazil as we move forward by accepting local currency anywhere in the world
Bexs Pay solutions not only give you access to a market that continues to grow, your cross-border e-commerce business will be ready to accepts the payment methods Brazilians prefer. You are paid in the currency of your choice, at the bank of your choice anywhere in the world. Find out more about our digital payment solutions!