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Contactless payment: what you need to know

What is contactless payment?

Contactless payment is any payment that occurs without a buyer inserting a payment card into a point-of-sale terminal. The term “contactless” generally refers to “tap-and-go” payments.

What are contactless payment methods?

EMV chip cards

“EMV” stands for “Europay, Mastercard and Visa” — the companies that created the technical standard for contactless payment technology.

Whereas traditional debit and credit cards have a magnetic strip that contains a user’s bank account information, EMV cards have a chip that generates a unique code for every payment.  

Digital wallets

Apple Pay Australia, PayPal and Google Wallet are all types of digital wallets — applications that securely store a user’s payment information.

Once you’ve stored your information in a digital wallet, you can use your smartphone or smartwatch to make purchases.  

Some types of digital wallet applications include features beyond payments. The Opal Travel app, for example, lets users plan trips and see their travel history, in addition to paying travel fare.

Digital wallets may also store event tickets, discount codes and digital proof of identity.

There are 3 types of digital wallets:


A closed wallet — like Amazon Pay — allows transactions only with the issuer, and any refunds automatically appear in the wallet. 


A semi-closed wallet allows customers to pay merchants who have a contract with the issuer. Payment processing companies Square and Stripe are both semi-closed wallets.


PayPal Australia is an example of an open wallet. Anyone with a PayPal account can use it to exchange funds, so it’s not just for retail purchases.

Why should businesses allow contactless payment? 


Card skimming, which is the act of placing a small, illegal card reader at POS terminals or ATMs, accounted for $5.5 million AUD in losses in 2022.

The magnetised strip on debit and credit cards contains static data about the user’s bank account, and skimmers allow criminals to access that information. Contactless payments are much more secure because they don’t reveal bank account data.

Businesses that accept contactless payments can help shield customers from skimming fraud. 

Customer satisfaction

According to the Reserve Bank of Australia, mobile wallets accounted for 25% of all debit and credit card transactions in 2022. And 38% of Australians made purchases using their smartphone or smartwatch in 2022, up from 19% in 2019.

Given the growth of mobile wallet usage, businesses should enable contactless payments to improve customer satisfaction.

Marketing opportunities

With digital wallet adoption increasing, more brands are expanding their marketing efforts to include wallets.

For example, brands can boost sales and upsells by creating special discounts just for wallet users. Some brands are also developing their own closed wallets that allow customers to earn points or rewards with each purchase. 

Faster payments

Importantly, businesses often get payments faster if they offer a digital wallet payment option.

With payment information already loaded into the digital wallet, customers can make payments at the double-click of a button rather than having the hassle of inputting their credit or debit card details. 


During the pandemic, the demand for contactless payment skyrocketed, because handling cash and manually using EFTPOS machines posed a risk of infection for workers and customers.

Safety-conscious habits that arose during the pandemic made a lasting impression on how people shop and the payment methods they prefer.

Enabling contactless payment can help keep workers and improve customer satisfaction.

Get paid faster with MYOB

MYOB is a business management platform with a bench of payment options built in. This includes accepting all the major credit cards, BPay, Apple Pay and Google Pay.

With MYOB, you can invoice customers, track the status of outstanding invoices, accept payments and account for income, expenses and GST to make tax time easy. 

Catering for the 6 core workflows that any business needs to address — customers, suppliers, employees, projects, finance, and accounting and tax — MYOB is the business management platform you need, whether you’re just starting out, or whether you need a raft of software solutions to manage an increasingly complex business.

Cloud-based, you only pay for the software you need, but you can have the confidence to grow your business with a business management platform that can scale and extend to meet your upcoming needs.

Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.

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