What is cashless or digital payment

Contactless payment on the rise

Contactless and cashless payments are more popular than ever at the moment. Ideally, it is quick and straightforward, and there are some people who - regardless of their fear of germs - do not like to carry around a lot of cash. Numerous such services are now on the market. Friends of such solutions are happy about the choice, others can no longer find their way through the jumble of offers. For a little more overview, here are the most important options for contactless payment with their advantages and disadvantages:

 

NFC debit and credit cards

Most people think of NFC (Near Field Communications) when it comes to contactless payments. This payment method has been available in Austria since 2013. The debit or credit card is held up to the reader and payments can be made without entering a PIN or a signature. There are fewer direct contact points, which reduces the risk for employees and subsequent customers of coming into contact with germs.

However, this is only possible for smaller amounts (currently up to 50 euros) and after the NFC payment of a total of 125 euros in a row, the PIN code of the card must be entered again. NFC is currently not yet a completely contactless alternative to cash.

In any case, the big advantage is that most customers are now familiar with this method of payment. All major debit and credit cards are NFC-enabled. Almost all large retailers and a large number of small shops accept this payment method and the devices are readily available. A disadvantage for the retailer is that here too - as for any transaction using an ATM or credit card - a small fee has to be paid.

 

Digital maps on mobile phones and smartwatches

If you don't just want to do without cash but also your wallet at all, a digital debit card is recommended. Large Austrian banks now offer their own apps in which the card data is stored. The prerequisite for this is an NFC-capable Android smartphone (iOS offers its own service with Apple Pay). The same advantages and disadvantages apply as with the classic NFC card. But be careful: Without a battery, there is of course no payment!

 

Apple Pay

The technology giant Apple responded early and developed its own solution for its devices. This uses Face and Touch ID as security features, but otherwise works in a similar way to other digital cards. As for the technology behind it, Apple has not reinvented the wheel: Apple Pay also works with NFC technology - including all of its advantages and disadvantages. However, Apple Pay is not yet supported by all banks.

 

Google Pay

Google jumped on the trend relatively late: its Google Pay service has only been available in Austria since November 2020. However, it remains to be seen whether Google will be able to catch up with its delayed entry into the market. The big banks have long since developed their own apps and the level of awareness leaves a lot to be desired.

 

Bluecode

The dispute between the US and China is widespread - also in the payment sector. Instead of Google Pay, the Chinese company Huawei relies on the Austrian-Swiss provider Bluecode. The program can be integrated throughout Europe into the Huawei Wallet, which was previously only available for customer cards and coupons. The system differs from NFC payment: When shopping, an anonymous barcode is generated that is scanned at the checkout. This should make the app more secure than competing products and also appeal to NFC skeptics. Another attractive feature of the European service is its independence from American providers. According to their own statements, they are networked with all Austrian banks and are accepted by over 85 percent of local grocers.

 

Scan & Go

The grocer Billa is doing the same as the US retail giant Walmart and is currently testing how queuing at the checkout can be bypassed at all. With the “Scan & Go” app, customers scan the barcodes on the products themselves and then issue payment instructions using their smartphones using a credit card or Mastercard. At the end, a checkout QR code has to be scanned at the branch exit. The system - which is currently being tested in a Viennese branch - is limited to ten products per purchase. Billa advertises primarily with the time savings for customers. One advantage for the company is the collection of information about shopping behavior - which, however, should not please every customer.

 

Transfer

An already established type of contactless payment should also be mentioned here for the sake of completeness: the classic transfer was a very good means of continuing their business activities for many companies during the first lockdown. Customers order by phone or online, transfer the amount and can then either pick up their goods or they will be delivered to them. The transfer works entirely without a terminal and a lot of additional work for the company (a business account is usually available), but it is slower than the other methods listed here and more cumbersome for customers. This variant is not suitable for perishable goods or products that are needed quickly.