Tap to pay: A guide to accepting contactless payments

Tap to pay lets you accept contactless payments with a card reader, iPhone, or Android device. Learn how it works by using NFC, what it costs, and how to set it up.

56% of US merchants now accept tap to pay (contactless) payments, up from 40% last year. Meanwhile, the global contactless payment market size is estimated to reach $164.15B by 2030. 

If you're wondering how to use tap to pay solutions for your business, you're in the right place.

It’s easy to set up and start accepting contactless payments. You can do so with a traditional card terminal, or skip the hardware entirely with Tap to Pay on iPhone or even an Android device. 

This guide covers what tap to pay is, how it works, what it costs, and how to start accepting it with the hardware (or phone) you already have. 

What is tap to pay?

Tap to pay is a payment method that lets customers pay instantly by tapping a card, smartphone, or wearable device on or near a payment terminal, rather than inserting a physical card and entering their PIN.

It's powered by NFC (near-field communication). The device sends an encrypted, one-time token (a stand-in for the actual card number) to the card reader within range.

Usually, devices need to be within a couple of inches of one another for NFC to activate. 

These payments are also known as contactless payments because they need to be within close range, but don't actually need to make physical contact with a reader, terminal, or device.

How does tap to pay work?

When a customer taps to pay with their card or device, NFC transfers a payment token to your reader. The payment is then approved in seconds.

Here's the full breakdown:

1. The customer taps their card, phone, or smartwatch on the payment terminal or device.
2. The customer's device creates a unique digital token instead of sending actual card data.
3. The token and security code are encrypted and safely sent through to the payment network.
4. The customer's bank then verifies the information and either approves or declines the payment.
5. The merchant receives near-instant confirmation that the payment was successful, without ever seeing or storing the customer's full card details or any other sensitive info.

How do customers make contactless payments?

Customers can make tap to pay (or contactless) payments using debit and credit cards, smartphones, and even wearable devices (like Apple Watches and Google Wallet-enabled wearables).

• Credit and debit cards: Most modern credit and debit cards support tap to pay, as demonstrated by the contactless symbol you usually see on one side. This means the cards were built to support NFC and can make payments by tapping or hovering over whichever device is set up to accept tap to pay payments.
• Smartphones: Smartphones enable contactless payments through built-in digital wallets, like Apple Pay, Google Pay, Samsung Pay, and more. 74% of US consumers use digital wallets because they make checking out fast and easy, and global digital wallet payments are expected to account for more than 52% of all online spending by 2030.
• Wearable devices: Wearable devices are also gaining traction as a popular way to complete tap to pay transactions. Similar to smartphones, users simply need to wave or hover their smart watch or other wearable over the payment device and checkout completes within seconds.

How to set up digital wallets for tap to pay

Setting up tap to pay with digital wallets (either on a phone or smartwatch) takes a couple of minutes. 

The customer opens their device's wallet app (like Apple Pay or Google Wallet), adds a credit or debit card by scanning it or entering the details manually, and verifies with their bank. The approval usually happens via a text code or through a banking app. 

From there, they can pay by unlocking their device and holding it within a couple of inches of any contactless-enabled terminal.

How to accept tap to pay at your business

You don't need any specialized hardware to accept tap to pay at your business, just a payment provider that supports it and a compatible device. Here's how to get set up:

1. Choose a payments provider that supports contactless payments: Make sure you consider transaction fees, payout speed, and that the provider supports the way you're selling (in-person, online, or both). Most tap to pay transactions have no extra fees. You typically pay the same transaction fee as regular card payments.
2. Check that your payment device is compatible with tap to pay: Tap to Pay on iPhone works on iPhone XS and newer models; on Android, you'll need an NFC-enabled phone running on a supported OS. If you already have a payment terminal or card reader, you should be good to go (just check that the contactless payment symbol is present).
3. Make sure tap to pay is enabled for your account: You may need to configure your POS settings or contact your payment provider if using a POS or card reader. For smartphones, you typically enable the right settings through your payment provider's app, which may include a verification step. Android users may also need to ensure their device settings have NFC toggled on.
4. Run a test transaction: Tap your own card or device to ensure everything is working before you present tap to pay to a customer.
5. Start selling: Enter the amount at checkout either via your device app or POS. The customer will tap their card, phone, or wearable, and you'll get confirmation of payment within seconds.

Accepting Tap to Pay on iPhone

Businesses can accept contactless payments directly on an iPhone using Tap to Pay on iPhone, Apple's built-in feature that turns the phone itself into a card reader.

No extra hardware is needed; it works on iPhone XS or later running iOS 16.4+

If you sell with Whop and have an iPhone, you're minutes away from accepting in-person payments. The Whop iOS app supports Tap to Pay on iPhone, which turns your phone into a contactless terminal:

Download or make sure you're already running the latest version of the Whop iOS app, and create a checkout link for each product you're selling in person.

The first time you use Tap to Pay on iPhone with Whop, you'll be walked through a quick one-time setup from Apple.

When a customer's ready to pay, tap the "Tap to pay" button under the checkout link's QR code. The customer then holds their card, phone, or smartwatch over your iPhone and payment clears in seconds.

Funds land in your Whop balance alongside your other sales, and customers can add their email address for a receipt if desired.

Note: Tap to Pay on iPhone is only available for one-time payments, not subscriptions. Currently only available to Whop sellers based in the US.

Accepting tap to pay with an Android device

Your Android phone can accept tap to pay if it has NFC and runs Android 10 or later. From there, a payment app like Square, Stripe, or PayPal Zettle turns the phone into a terminal; no reader required.

Requirements vary by app, so check your provider's supported-device list.

We're working on a bringing tap to pay solution to Whop sellers with Android devices in the near future. Stay tuned.

Accepting tap to pay with a card terminal

To accept tap to pay on a card terminal, you need a reader with NFC (which nearly every modern terminal has built in). If you already take chip cards, check yours for the contactless symbol; you're likely set without buying anything new.

How much does tap to pay cost?

Tap to pay is free for customers, there's no extra fee for tapping a card or phone instead of inserting it.

For businesses, tap to pay transactions are treated as card-present payments, so you'll typically pay the same processing rate as any other in-person card payment.

While there's no premium for accepting contactless, a few things affect what you'll actually pay:

• Processing rates: Most providers charge their standard in-person rate for tap to pay. Some may add a small per-transaction authorization fee for contactless payments, so check the fine print.
• Hardware: If you're using Tap to Pay on iPhone or Android, hardware costs are zero. The phone you own is the terminal. A dedicated card reader or terminal can run anywhere from $50 to several hundred dollars.
• Account extras: Depending on the provider, watch for monthly fees, PCI compliance fees, and chargeback fees that apply across all payment types, not just contactless.

Is tap to pay a secure way to make and accept payments?

Yes. Tap to pay's security is one of the main reasons the method has become so popular.

When a customer taps their card, phone, or smartwatch, the payment details don't get transmitted in plain text. The transaction is protected using tokenization, which replaces sensitive card information with a unique code that is only valid for that exact purchase. That means even if that data were intercepted, it couldn't be used again for any fraudulent payments.

Mobile wallets such as Apple Pay and Google Pay add another layer of security by requiring customers to verify the payment with their passcode (or even more securely with biometrics, like Face ID or a fingerprint).

Merchants never receive the customer's full card details, which means there's less sensitive information at risk if a data breach occurs on the card network or business backend.

Businesses using tap to pay can offer their customers a fast, convenient, and highly secure payment experience. That security is one of tap to pay's biggest selling points.

What are the benefits of offering tap to pay?

Beyond security, tap to pay can also help businesses speed up transactions, improve the customer experience through convenience, and reduce the need for expensive payment hardware.

Faster checkouts

Contactless payments take just a few seconds and help reduce physical queues and keep customers moving. This is particularly useful for in-store purchases and pop-up events – but it can also help remove checkout friction online, as for many customers it's a preferred payment method.

Lower hardware costs

Many businesses can start accepting tap to pay with a compatible smartphone or tablet rather than having to purchase a dedicated card reader or terminal. This reduces up front costs and makes it easier for all kinds of small businesses to accept payments, from in-person mechanic services to coffee bars.

Accept payments anywhere

Even if you sell primarily online, tap to pay gives you the opportunity to expand your business into IRL experiences like pop ups, market stalls, networking events, and more. As long as you have a device capable of accepting them (like an iPhone or Android), you can make sales with your mobile data or a WiFi connection.

Helps to mobilize staff

Ever been into an Apple store? All staff use Apple's contactless solution, Tap to Pay on iPhone, to accept customer payments, allowing staff to be completely mobile without standing behind a dedicated checkout desk. Same logic applies if you're running a brick-and-mortar store, cafe, repair shop, market stall – anywhere multiple customers can be served at once.

Cons of tap to pay to consider

While tap to pay is fast, secure, and convenient, there are still some downsides worth considering before implementing the payment method (especially if it will be your only way to process transactions).

Tap to pay is contactless only

Tap to pay can't read cards that need to be swiped or inserted. Most modern cards are contactless, but a small share of customers still have a chip-only card so a backup reader (or a QR code checkout link) is worth having.

It needs a connection

Accepting tap to pay on a phone requires WiFi or mobile data. If you're selling somewhere with patchy signal (think market stalls or traveling to customers for IRL services), you'll need to plan ahead.

Relying on your phone as the terminal

Unless you have a card reader, you need to ensure your phone is in good working order. A dead battery or a cracked screen can become a checkout problem, inhibiting your ability to process payments.

Compatibility

Not every provider supports tap to pay on every device, or in every country. Check compatibility isn't an issue for your business or customers before committing.

Limits on tap to pay transactions

In the US, there's no federal limit on contactless payments. While some card issuers set per-transaction caps on contactless cards, most have no cap at all. Mobile wallets like Apple Pay and Google Wallet typically have no limit, because Face ID, fingerprint, or passcode verification confirms the cardholder on every tap.

Implement tap to pay with Whop

The Whop iOS app supports Tap to Pay on iPhone, so your phone can become your terminal, allowing you to create a checkout link and take contactless payments in seconds. 

Because Whop runs your whole business (payments, payouts, cards, and ads), the same platform that powers your online sales can now handle your market stall, pop-up, or storefront too.

Currently, Tap to Pay on iPhone is available to sellers in the US only, with plans to expand coverage in the near future. Sellers will soon have access to contactless payments with Android, too. 

We’ll keep you updated as these changes roll out. 

Tap to pay FAQs

What is tap to pay and how does it work?

Tap to pay is a contactless payment method using near-field communication (NFC) that allows customers to complete payment using their card, phone, or smartwatch by hovering or waving it within a few inches of a payment terminal or compatible device.

Is tap to pay safe? Can it be skimmed or hacked?

Yes, tap to pay is safe and hard for hackers to intercept as each transaction relies on tokenization, sending a single-use code that encrypts card data and cannot be repeated for more than one transaction.

How do you set up tap to pay on iPhone or Android? 

To set up tap to pay on your device to make payments, you'll need to set up your digital wallet (Apple Wallet or Google Wallet). If you want to use your iPhone or Android device to accept tap to pay payments, you'll need to set it up through your payment provider's mobile app. Android users may need to enable NFC in their device settings.

Is tap to pay the same as contactless? 

Yes, tap to pay is a contactless payment method, allowing customers to make payments with their card, device, or wearable without making physical contact with a payment terminal. This relies on NFC, or near-field communication, allowing payments to be made when devices are within close range (a couple of inches) of one another.

Does tap to pay work without internet or cell service? 

Customers may be able to make tap to pay payments without a working connection as their device has secure stored data tokens. For merchants, however, a working internet connection or mobile data is needed to process payments.

Is there a limit on tap to pay transactions? 

In the US, there's no federal limit on contactless payments – though some banks may have their own transaction limits. Digital wallets typically have no limit, because biometric data or a passcode verification confirms the cardholder each time they pay.

What fees do merchants pay for tap to pay?

Tap to pay transactions are typically treated as card-present payments, meaning merchants pay the same processing rate as any other in-person card payment.

How do I accept tap to pay as a business?

Businesses can accept tap to pay by signing up with a payment provider that supports contactless payments and either acquiring compatible hardware or using an NFC-enabled device as their payment terminal (such as an iPhone or Android).