Contactless payment systems use touch-free payment methods, such as tap-enabled cards, mobile wallets, smartphones, and smartwatches. The customer taps their device, and the store owner relies on connected hardware, point-of-sale (POS) software, and a payment processor to authorize the sale and record the order.
In 2025, Mastercard reported that more than 75% of payments were contactless, while Visa’s Tap to Phone adoption grew 200% year over year. For store owners, that shift makes contactless checkout a standard part of serving customers.
This guide covers how contactless payments work, how to choose a system, and how to set up contactless payments with Shopify.
What is a contactless payment system?
A contactless payment system includes a payment method, POS software, a payment processor, and hardware. These components work together with back-end systems to record sales. Instead of swiping or inserting a card, customers tap their card or device near a reader.
Contactless payment technology uses near-field communication (NFC) to exchange data when two devices are within two centimeters of each other. Customers don’t need to make physical contact with the terminal. They pay using contactless cards, mobile wallets on smartphones, or smartwatches.
To accept contactless payment, retailers need an NFC-enabled reader or a smartphone with Tap to Pay capabilities, as well as a POS system and a payment processor to handle the transfer of funds. Shopify POS connects contactless in-person transactions with other aspects of your business like sales, inventory, customer profiles, and reporting.
Contactless payment vs. tap to pay vs. NFC
Contactless payment is the broad category of payment methods that let customers pay without inserting or swiping a card, such as tapping a card, phone, or wearable device near a payment terminal.
Tap to pay is the action the customer takes to complete the transaction. Near-field communication (NFC) is a short-range technology that enables these payments.
| Term | What it means | Example |
|---|---|---|
| Contactless payment | Umbrella category for touch-free transaction | A shopper paying without inserting or swiping a card |
| Tap to pay | The physical motion a customer makes | A shopper holding a card or phone near a terminal |
| NFC | Technical protocol that transfers data | A card reader and smartphone exchanging data to complete a transaction |
For example, Tap to Pay on iPhone or Android with Shopify POS lets eligible store owners accept contactless payments without a separate card reader. They use their existing mobile devices to process business transactions.
How contactless payment systems work
From the customer’s side, contactless payment is a quick tap. But the payment device, processor, and POS system move through several steps in seconds to complete the transaction:
- The customer chooses a contactless card, phone, watch, or digital wallet.
- They hold the device near the payment reader or a compatible smartphone.
- The device and the payment system exchange data using NFC.
- The payment processor authorizes or declines the transaction.
- The POS records the sale, receipt, inventory change, and customer or order data.
A connected setup keeps those steps tied to the sale. For example, Shopify Payments and Shopify POS keep payment, order, payout, and reporting data in one system.
Types of contactless payment systems for merchants
The right contactless payment setup depends on where your store’s checkout happens.
Countertop terminals
Retail stores and cafés with fixed checkout counters use countertop terminals for high-volume sales. They have customer-facing displays and connect to other hardware like barcode scanners or cash drawers.
The Shopify POS Countertop Kit uses a wired Ethernet connection for reliability and sends digital receipts to customers.
Mobile card readers
Mobile readers let your staff bring the checkout to the customer. This setup is suited to markets, events, and sales floor checkout. Retail associates can use the Shopify Tap & Chip Card Reader to process payments anywhere in the store for line busting and to prevent long queues.
Tap to pay on smartphones
Store owners can also accept contactless payments on a compatible phone without extra hardware. This works well for pop-up shops, service businesses, and overflow checkout.
Benefits of contactless payment systems
Contactless payments reduce friction at checkout for both customers and staff. Benefits of contactless payment systems include:
Faster checkout and shorter lines
Long lines tie up staff, delay sales, and add pressure during busy store hours.
Austin-based pet supply retailer Tomlinson’s switched to Shopify POS to address inefficient checkout processes. “Checkout took too long because each transaction probably had two to three times the amount of taps that should have been required,” says owner Kate Knecht.
After moving to Shopify POS, Tomlinson’s reduced average in-store checkout time by 56% and reduced required checkout taps by 46%. Staff could build carts, apply discounts, accept payments, issue receipts, and update inventory in one checkout workflow.
More payment choice for customers
Customers use a mix of payment methods, including cash, credit cards, Apple Pay, and digital wallets.
The Federal Reserve’s 2025 Diary of Consumer Payment Choice found US consumers made an average of 48 payments per month in 2024. Cash represented 14% of payments, credit cards 35%, and debit cards 30%. Consumers made an average of 11 mobile phone payments per month.
Payment behavior is also moving toward more frictionless payment options, such as tap- and wallet-based. Worldpay reported that digital payment methods grew from 3% of global in-person shopping value in 2014 to 38% in 2024.
Better omnichannel customer data
A contactless payment is more useful when it connects to the rest of the customer journey. It helps store owners treat an in-store sale as part of the same customer relationship as an online order.
Little Words Project used Shopify POS email capture to connect in-store shoppers with their broader customer data. After adding email capture at checkout, they were able to improve customer service by freeing up staff from manually typing emails and better personalize marketing messages.
How to choose a contactless payment system
Before choosing hardware or a provider, compare how each option fits into daily operations. Use this checklist:
- Payment methods. Confirm the system accepts contactless debit cards, credit cards, mobile wallets, smartwatches, and tap to pay where available.
- Device compatibility. Check whether the system works with the phones, tablets, card readers, and receipt printers your staff will use.
- POS connection. Choose a system that connects payments to the POS system, so staff don’t need to enter the same sale twice.
- Inventory syncing. Confirm the system updates inventory after online and in-person sales, so stock counts stay accurate across channels without manual entry.
- Customer profiles. Check whether the system captures customer data, purchase history, and contact preferences when customers opt in.
- Fees and payouts. Compare hardware costs, POS subscription costs, processing rates, payout timing, refund handling, chargebacks, and reporting exports.
- Store workflows. Test whether staff can process refunds, exchanges, discounts, and receipts without switching systems.
- Security settings. Look for systems that support Payment Card Industry (PCI) DSS compliance, Europay, Mastercard, and Visa (EMV) standards, encryption, tokenization, and staff permissions.
- Staff training. Run a test transaction and refund to see how many steps staff need to complete each task.
- Mobile selling. Confirm the system supports checkout at pop-ups, markets, events, curbside pickup, and other mobile selling locations.
Shopify POS provides a unified system, connecting Shopify Payments, compatible hardware, inventory, customer profiles, orders, and reporting in one place.
Jewelry and interior design business Sukhmani Designs illustrates what consolidating those criteria looks like in practice. Sat Gurumukh Khalsa launched the business to continue his family’s jewelry tradition, but struggled with disconnected systems across different locations. By switching to Shopify’s unified commerce platform, the business’s revenue grew by 38%.
“I love that I can access Shopify POS anywhere and process payments right at clients’ homes without worrying about paying extra fees,” says Sat Gurumukh. “Shopify has created more possibilities for sustainability and scalability, allowing us to work on our business instead of just in it. That’s how you build something that lasts.”
How to set up contactless payments on Shopify
Complete these steps to set up Shopify POS:
- Set up Shopify POS. Install Shopify POS, add your products, confirm your retail locations, and make sure inventory is assigned to the correct location so inventory and orders stay in sync across channels.
- Set up a payment method for in-person sales. If your store is eligible, activate Shopify Payments and complete setup. Then choose how you want to accept contactless payments.
- Enable tap to pay or connect hardware. Choose the acceptance method that fits your setup:
- On iPhone, Tap to Pay on iPhone is activated from Shopify POS and requires the proper payment settings permission.
- On Android, Tap to Pay on Android activates automatically on compatible devices with an active Shopify Payments account.
- If you use a card reader, connect it in Shopify POS after your payment setup is complete.
- Check payment options in Shopify POS. The payment methods shown at checkout depend on what is set up and available on that POS device.
- Test your setup.
- If Shopify Payments is in test mode, use test card numbers to simulate transactions. Shopify’s test transactions must be more than the equivalent of $1.
- You can also run a non-card test, such as a cash payment, to check the POS workflow.
- Train staff. Make sure staff know how to open Shopify POS, add items to the cart, choose the payment method, complete a contactless payment, and issue receipts.
- Set up receipts, returns, and customer capture. Shopify POS supports printed, email, SMS, and Shop app receipts in supported setups.
- Review payouts and retail reports. Review payout information in the Shopify admin. For retail performance, Shopify’s POS sales reports can show sales by product, stock keeping unit, vendor, POS location, and staff member.
Contactless payment system FAQ
Are contactless payments secure?
Yes. Contactless payment systems use short-range communication, encryption, EMV standards, and tokenization. They reduce the risk of exposing sensitive payment data but don’t eliminate every fraud risk.
What equipment do you need to accept contactless payments?
Store owners need a compatible POS setup to accept contactless payments. This includes a countertop terminal, mobile card reader, or a smartphone with tap to pay.
Can small businesses accept contactless payments without a card reader?
Yes, in eligible regions. Tap to pay on compatible smartphones lets store owners accept contactless cards and digital wallets without extra hardware.
What should merchants look for in a contactless payment system?
A contactless payment system should integrate with inventory management, sync customer profiles, and support various payment methods. Security protocols, hardware options, and fee structures vary between providers.
