Contactless Payments Pave the Path Forward

As contactless payments increase in popularity, retailers should consider which form of technology might be right for their stores and how best to preserve data security.

Emily Boes • Associate Editor

Contactless payments are becoming mainstream in the convenience store industry, as more retailers upgrade to offer the service. As c-store operators consider how they might like to implement new technology, they also need to determine how it might impact data security.

During the height of the pandemic, customers wanted to avoid touching possibly contaminated surfaces, and the use of contactless payments accelerated. Contactless payments can range from tapping credit cards on the screen as opposed to handing them to a cashier to mobile payments and scan-and-go checkout.

“It is important for retailers to have the tools and process in place to accept contactless payments,” said Perry Kramer, managing partner at Retail Consulting Partners.

He noted that transactions are faster with contactless payments, reducing payroll spent at the point of sale (POS).

“In order of priority, enabling contactless payments for all of the major card brands should be table stakes. It needs to be strongly considered during any type of payments,” Kramer said.

According to Linda Toth, managing director at Conexxus, contactless cards have become more popular since the pandemic, as have mobile wallet payments.

“I know that we’ve seen increases quarter over quarter with contactless acceptance and

folks that are consumers that are paying with contactless payment. It’s been very popular in Europe for a long time, and I think we’re finally starting to get some momentum on it,” said Toth.

SELF-CHECKOUT SOARS IN C-STORES

As retailers look to accommodate contact-free payment transactions, many are turning to selfcheckout options.

Located in Utah, Holiday Oil, which recently opened its 68th site, recently adopted Express Lane self-checkout in all stores.

“We compared different self-checkout options and found that Express Lane provided a superior guest experience with a competitive combination of up-front and long-term costs,” said Jay Cahoon, fuel systems director at Holiday Oil.

With the self-checkout in place, the chain’s associates will be able to use their skills on more complex tasks and customers will have a speedier, more convenient checkout experience.

Cahoon shared that although the self-checkout implementation represents a significant investment, the addition is worth easing the burden placed on associates by current labor conditions.

Pete’s Convenient Stores — which operates 50 stores in Missouri, Kansas and Oklahoma — also adopted Express Lane self-checkout in all stores, as it was integrated with the c-store’s current POS. Pete’s also offers scan-and-go technology for customers who prefer to pay via mobile app.

With Express Lane, the customer scans the product and uses cash or card for payment, said Brenda Elsworth, chief operating officer of Pete’s Convenient Stores. Pete’s loyalty is integrated into the register, allowing customers to experience loyalty offers. The self-checkout is set up alongside the store’s POS, which also provides Pete’s with a console to monitor self-checkout transactions.

“The Express Lane/Self-Checkout and/or scan-andgo will become part of the retail experience. With customers’ expectation of speed and choice, the retail industry is tasked with meeting this demand,” said Elsworth.

Cahoon also foresees a shift to contactless payments as the norm in the future, with self-checkout being Holiday Oil’s gateway method.

“Over time I see the customer experience continuing to transition toward a completely contactless model. Self-checkout and other contactless checkout options will become the norm inside retail establishments,” continued Cahoon. “Remote ordering, personal shopping, curbside pickup and home delivery are all pieces of this change.”

PROTECTING DATA SECURITY

With multiple contactless payment options emerging on the market, retailers need to be vigilant about how the new systems may impact data security.

Luckily, the contactless payments movement should make existing systems more secure, according to Kramer.

“A basic requirement needs to be to include the use of encryption of all payment transactions and the tokenization of any payment information stored,” he said.

Kramer noted this is important when considering a mobile application that enables customer payments.

“Additionally, retailers need to maintain their due diligence in checking daily for the installation of skimmers,” he continued. Skimmers are devices used by thieves to steal credit card data.

In another move to help reduce the risk of fraud, retailers over the years have been making their stores EMV compliant, which has garnered them substantial savings.

Kramer noted that retailers who have not installed EMV at the pump are seeing significant chargebacks.

Toth believes EMV is a step in the right direction to eliminate fraud.

“We have, in general, seen fraud go down in stores that have implemented EMV,” said Toth. “I think that’s true for contactless EMV. We have seen fraud trending upward on magnetic stripe contactless.”

Holiday Oil and Pete’s don’t anticipate any data security concerns due to the addition of self-checkout.

“We do not store any credit card data. It is processed by our CC (credit card) processor,” Elsworth said. CSD

fast facts:

• Contactless cards have become more popular since the pandemic arrived. • In general, Conexxus has seen fraud decrease in stores that are EMV compliant. • Retailers are adding self-checkout, scan-and-go and other contactless options to meet consumer demand.

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