Enhancing Customer Convenience: Exploring Contactless Payment Options in Physical Retail

Published on
August 25, 2023
Written by
Olivier Roy
Read time
5 minutes

Olivier Roy

Co-Founder & CEO

Top 4 current contactless payment options in store and their implications

Lately, the Contactless Payment market has experienced a remarkable surge in adoption, capturing the interest of both retailers and consumers. This momentum can be attributed to its unparalleled advantages and ease of transactions compared totraditional card and PIN payments. The rapid digitization of the retail sector has propelled contactless payment to new heights, driven by a desire to minimize fixed costs and enhance accessibility for customers. The continuously growing popularity of digital payment alternatives is expected further to drive the expansion of the contactless payment market.

Key factors fueling the widespread use of these systems include their symbiotic relationship with the digital wallet and banking industries, catering to increasingly time-sensitive consumers who constantly seek simpler methods of shopping. Rising costs of manufacturing of kiosks components and labour scarcity forced retailers to adapt to new alternatives to remain optimally operational even under pressure from market shocks.

What are the main solutions currently on the market?

1)     Self-service Kiosks

Traditional self-checkout kiosks automate retail store processes, enabling customers to scan, bag, and pay for items independently. They include a touchscreen, barcode scanner, weighing scale, and payment terminal. Originating in the 1990s, they gained popularity in the late 1990s and early 2000s through pioneers like Home Depot. Ongoing advancements improved reliability and user-friendliness, making them commonplace today.

Benefits: Self-checkout empowers shoppers, reducing reliance on staff by enabling independent scanning and payment. For retailers, it cuts labor costs, enhancing operational efficiency and saving money.

Drawbacks: However, less tech-savvy customers may struggle, needing extra help for scanning and payments, disrupting the process. Technical glitches like scanning errors or payment issues can cause delays, marring the shopping experience. Many shoppers also feel they should not have to work on behalf of the retailer at checkout.

2)     Fully autonomous checkout systems

Fully autonomous checkout systems create a hands-free shopping experience through computer vision, AI, and robotics. Shoppers can select items and purchase them without human help. Originating from advancements in computer vision and sensor fusion in the early 2010s, this concept spread to various industries, including retail. In 2016, Amazon revolutionized with Amazon Go, using computer vision, a variety of sensors, and deep learning. It tracks customers, updates their cart, and handles payment upon exit.

Benefits: Customers enter, grab items, and exit without manual scanning or lines. Time-efficient, skipping manual scanning and checkout lineups. Can lead to lower operational costs by eliminating cashiers and associated expenses. Enhances security through surveillance and theft prevention.

Drawbacks: High capital expenditures related to hardware required. Long payback period of over 36 months.


3) Mobile POS

Mobile POS simplifies transactions using smartphones and tablets, ideal for on-the-go payments. These systems now encompass inventory management, sales reports, and CRM integration, enhancing business operations. NFC/RFID and mobile wallets drive contactless payments and better customer experiences.

Benefits: Convenient transactions anywhere,using existing smartphones or tablets, eradicating fixed checkout needs. Idealfor diverse settings like pop-ups, trade shows, and outdoor events. User-friendlymobile apps allow quick training and transactions.

Drawbacks: Hardware limitations compared to dedicated systems, lacking features like cash drawers and printers. Hardware purchases upfront might inconvenience businesses with limited resources.

4)      Mobile Self-Checkout

Mobile self-checkout scan & go gained popularity in the early 2010s with smartphone adoption. Retailers like Walmart and Sam's Club introduced apps allowing customers to scan barcodes, add items to a virtual cart, and make payments within the app. This eliminated checkout lines, offering convenience and time savings. Retailers benefited from increased efficiency, reduced labour costs, and valuable data insights. Mobile self-checkout scan & go continues to evolve, offering personalized offers, loyalty programs, and integration with digital wallets — a significant shift in retail, providing a convenient and frictionless checkout experience without relying on retailer-maintained hardware.

Benefits: Mobile self-checkout process leads to shorter customer wait times, curbing cart abandonment rates and driving upcompleted transactions, thereby boosting average revenue per customer. This option also eliminates the need for bulky fixed cash registers, effectively freeing up valuable retail space. Retailers can allocate their checkout staff to provide personalized assistance, leading to higher sales and improved customer satisfaction 

Disadvantages: Security issues of full autonomy, loss prevention issues might incentivize theft. Not convenient for people without a smartphone or with difficulties operating a smartphone. Not adapted to the frictionless adoption of physical cards or cash payments.

Which solution is right for you?

Many of the existing contactless solutions face limitations in terms of integration and personalization, which prevent the full realization of the potential of self-checkout for both retailers and customers. While other forms of contactless payment systems have emerged as a natural evolution from traditional self-checkout kiosks, the rapid adoption has been hindered by factors such as hardware requirements, the costs associated with transitioning, and retailers' reservations about their value proposition.

If budgetary constraints are of no concern and your primary focus is on enhancing sales fluidity regardless of the lengthy payback period, AI computer vision technologies could be the ideal solution for your store. This technology has the potential to reduce variable overhead costs, and attract a new segment of tech-savvy consumers.

On the other hand, if you're a smaller retailer with limited resources and a desire to streamline checkouts without investing significant capital in kiosks or costly hardware and integration, Mobile POS might be the right fit for you. The ROI gained from mobilePOS will be practically eminent and allow you to scale more effectively.

However, in terms of offering greater convenience, minimizing capital expenditures, enabling high scalability, facilitating advanced consumer data collection, and providing customization and personalization throughout the consumer journey, then Mobile self-checkout is the obvious choice.

What now?

If you're searching for a self-checkout solution that genuinely adds value to your business, consider one of Leav's solutions. Liberating store staff to concentrate on enjoyable and valuable tasks such as merchandising, sales, and customer service not only elevates the shopping experience but also alleviates staff stress.

Leav empowers shoppers by offering up-to-the-minute basket details, promotions, and recommendations, leading to well-informed choices and heightened loyalty. At the same time, it enables retailers to foster meaningful connections with shoppers on a larger scale.

Opting for a software-driven checkout solution like Leav comes with the advantage of reduced hardware expenses, quicker return on investment, and a more efficient use of checkout space.