Contactless Payments: What They Are, Payment Methods, and How They Work

Contactless payments have become one of the most widely used payment methods across retail stores, vending machines, amusement machines, gas stations, self-service kiosks, and virtually any unattended point of sale. Contactless technologies—such as NFC tags, bank cards, Apple Pay, Google Pay, and QR-code payments—have completely transformed the speed, security, and convenience of in-person transactions.

According to Visa’s “Europe Consumer Payments Attitudes Study 2024” more than 70% of in-person transactions in Europe are now made using contactless technology—and the trend continues to grow year after year.

This comprehensive guide explains what contactless payments are, the different methods available, how each one works, and how solutions like Frekuent Spot help operators and businesses implement them seamlessly and efficiently.

What Are Contactless Payments?

Contactless payments are transactions made by simply tapping or holding a card, smartphone, or wearable device near a payment terminal—without inserting a card or entering a PIN (for low-value purchases).

These payments rely primarily on NFC (Near Field Communication), although QR-code payments also play an important role in enabling mobile-based transactions.

Key Benefits of Contactless Payments

• Faster and smoother transactions
• Increased convenience for users
• Enhanced security through tokenization
• Full compatibility with cards, phones, and smartwatches
• Ideal for vending, amusement machines, and unattended environments

Contactless Payment Methods

There are several types of contactless payment methods, each built on technologies designed to improve the user experience and operational efficiency.

1. NFC Contactless Payments

NFC is the most widely recognized contactless technology. It enables payments by simply holding a card, phone, or smartwatch near the terminal.

Common NFC-based payment methods include: Bank cards (Visa, Mastercard), Apple Pay, Google Pay, Samsung Pay, and NFC-enabled wearables.

How it works

1. The user taps or holds the card or smartphone close to the terminal.
2. The NFC chip exchanges an encrypted identifier (token).
3. The issuing bank validates the transaction in milliseconds.
4. The terminal displays approval.

According to Mastercard’s “Contactless Payments Report 2023” NFC payments are up to 10× faster than inserting a card and up to 4× more secure thanks to tokenization and dynamic encryption.

2. Mobile Wallet Payments

Mobile wallets like Apple Pay, Google Pay, and Samsung Pay store the user’s card digitally and use NFC with biometric authentication.

How they work

1. The user authorizes the payment with Face ID, fingerprint, or device PIN.
2. The wallet generates a one-time, non-reusable token.
3. The terminal receives the encrypted data.
4. The bank approves the transaction.

Apple Pay and Google Pay never share the actual card number with the merchant, significantly reducing fraud risk.

3. QR-Code Payments

QR-code payments allow users to complete transactions by scanning a code with their mobile banking app or digital wallet—making them ideal where NFC isn’t available.

How they work

1. The terminal displays a QR code.
2. The user scans it with a mobile app.
3. They authorize the payment on their phone.
4. The terminal receives confirmation.

According to Visa’s “Digital Payments Study 2024” QR-code payments grew 25% globally, especially in self-service and entertainment environments.

4. Tap to Pay (Smartphone as Payment Terminal)

This method enables businesses to accept contactless payments directly on a smartphone—no physical payment terminal required.

How it works

1. The merchant installs a certified Tap to Pay app.
2. The customer taps their card on the phone.
3. The transaction processes just like on a traditional POS terminal.

Tap to Pay is rapidly accelerating contactless adoption among small businesses and mobile operators.

Benefits of Contactless Payments

Contactless payments deliver clear advantages for both consumers and operators.

Benefits for Users

• Speed: payments take just seconds
• Convenience: no need for cash or inserting a card
• Higher security: tokenization + biometrics
• Intuitive experience: easy for all ages
• Fewer errors: eliminates issues with chips or magstripes

According to the “Visa Global Back to Business Study 2023–2024” customer satisfaction increases by 30% when businesses offer contactless payments.

Benefits for Operators

• More sales: less friction = more completed transactions
• Lower maintenance: no jammed bills or coins
• Fewer incidents: reduced support calls and theft-related issues
• Greater operational efficiency: faster, more reliable payments
• Modern user expectations: contactless is now the standard

In vending machines and amusement environments, contactless payments significantly increase conversion rates.

Frekuent Spot: Contactless Payments and Loyalty for Unattended Environments

Frekuent Spot is Frekuent’s contactless payment and loyalty solution designed specifically for unattended machines. It is fully compatible with the most widely used contactless payment methods worldwide, including bank cards, NFC tags, QR-code payments through third-party apps, the Frekuent App, Apple Pay, Google Pay, Samsung Pay, and meal voucher or restaurant ticket systems.

In addition to standard payment options, Frekuent Spot also supports key international methods such as Satispay in Italy and MB Way in Portugal, ensuring operators can serve local customer preferences in multiple markets. And because every operation is different, the system can integrate additional contactless payment methods through custom development, offering unparalleled flexibility for operators expanding into new regions or requiring specific technological capabilities.

Beyond payment acceptance, Frekuent Spot includes robust loyalty features: it enables user identification without requiring app downloads, supports cashback and personalized promotions, and provides real-time analytics for every machine or point of sale, turning each transaction into an opportunity to build customer loyalty and boost recurring usage.

Built-in Loyalty Features

Frekuent Spot not only processes payments, it enables customer loyalty:

• User identification without mandatory app downloads
• Cashback and personalized promotions
• Unified balance and top-up system
• Real-time analytics by machine or point of sale

Contactless payments deliver unmatched speed, security, and ease of use forconsumers, while offering operators fewer incidents, higher efficiency, and increased sales.

Solutions like Frekuent Spot make it easy to integrate these payment methods into vending machines, amusement devices, and unattended points of sale, adding loyalty and analytics features that enhance both profitability and user experience.

The future of payments is clear: more digital, faster, and fully contactless.

Want to enable contactless payments on your vending machines or unattended points of sale? Get in touch with the Frekuent team, we’ll guide you with no obligation and help you upgrade your operation to the next level.