Top Contactless Payment Apps for Small Businesses

Highlighting the Touchless Commerce Solutions for Retailers

Customer using contactless payment

 Getty Images/dowell

The ongoing public health crisis has required small businesses—retailers in particular—to make many changes to the way they operate. Perhaps one of the most noticeable changes has been a rise in contactless payments. This technology was already available in many places, but has since become a preferred option for many retailers and consumers as they seek to reduce opportunities for virus transmission.

A survey conducted by Forrester for the National Retail Federation indicates that no-touch payments have increased for 69% of retailers surveyed since January 2020, and among those that have implemented contactless payments, 94% expect that increase will continue through 2021. On the consumer side, 19% of U.S. shoppers said they’d made a digital payment in a store for the first time in May 2020—and more than half said they’d likely continue doing so.

As small businesses acclimate to the changes, contactless payments is a top concern. Here is a review of some of the top contactless payment apps, including Apple Pay, Square, Google Pay, and Venmo, to help businesses determine the best fit for their needs.

What Is Contactless Payment?

Contactless payments allow shoppers to pay for goods or services without needing to swipe a card, enter a PIN, or sign for a transaction—essentially, allowing the transaction to take place without touching anything. 

The most common contactless payment apps either operate with NFC (Near Field Communication) technology, or using a QR code.

NFC is a form of wireless, contactless communication between devices in close proximity to each other—for example, a phone and a card reader at a cash wrap—that allows them to exchange small amounts of data. NFC technology essentially allows a person to link their payment methods to their phone, and to use their phone with a contactless reader to complete a transaction.

Some contactless payment apps, such as Paypal and Venmo, utilize a QR code to complete the transaction instead. In this case, an internet connection or cell phone data is required and the customer usually has to manually enter their payment, which is then transferred to the cash app on the business’s device.

How Contactless Payment Works

A customer using a contactless payment option with NFC will simply hold their phone near the contactless payment reader or tap their credit card with an RFID chip on the reader and the transaction is completed. A contactless payment doesn’t transmit card information, but rather uses a token to stand in for the credit and debit card numbers. In some cases, if the customer is using a mobile wallet, a touch ID, PIN, or face ID on the device will be required. For the business, the payment is processed as any “card present” transaction would be. Contactless payments using major credit cards and NFC are widely understood to have the same security as any other credit card transaction.

For contactless transactions utilizing a QR code, a bit more manual entry is required. Typically, the customer scans the QR code at the business, enters in their payment amount, and the payment is transferred. They’d then show the payment to the merchant, who would proceed with the sale. This method may require more training and information on the part of the staff. It also requires an internet connection. 

Apple Pay 

Apple Pay was launched in 2014 as an easy, secure, and private way to pay with an iPhone, and now works with other devices like the Apple Watch. Users can add their credit or debit card to their mobile wallet—Apple Pay works with most card issuers and payment providers—and the device will use NFC technology to allow for contactless payment at a retailer that accepts Apple Pay. Apple Pay also works with online purchases.

How to Set Up Apple Pay

Businesses that want to accept Apple Pay need a contactless payment-capable point-of-sale (POS) terminal. Apple advises contacting your payment provider to set up your terminal, and telling them you would like to accept Apple Pay. If you are already NFC/FeliCa/contactless payment capable, you most likely can set up Apple Pay without a challenge.

Security Features

Every Apple Pay transaction requires authentication by Touch ID, Face ID, or password. Higher cost transactions may require a signature. A customer’s card information is never transmitted. 

Pricing and Fees

There are no additional fees for merchants to accept Apple Pay. Businesses pay the same credit card rates and fees as they normally would for a card-present transaction and Apple Pay charges the card issuer. The payments are part of the credit card transactions for the business. There is also no special equipment required aside from a contactless payment-capable POS terminal.


According to the International Data Corporation (IDC), 15.5% of smartphone users have Apple’s iOS operating system. Meanwhile, PYMNTS research shows that 51% of merchants accept Apple Pay for retail sales.

Apple Pay Pros and Cons

Apple Pay is widely accepted across merchants and provides a secure way of conducting contactless transactions. There are also no additional fees or special equipment associated with Apple Pay—businesses who are using contactless technology can set up Apple Pay seamlessly. 

However, a customer must have an Apple device to pay with Apple Pay, so businesses may want to have other contactless payment options available.

Google Pay

In 2018, Google announced that it was bringing its various payment options, such as Android Pay and Google Wallet, under a single brand: Google Pay. Google Pay is available online, in store, and across Google products, as well as for peer-to-peer transactions. Users must have an Android device with Google Pay installed on the device. For businesses, Google Pay transactions function as credit card transactions.

How to Set Up Google Pay

Google Pay does not process or authorize transactions. Like Apple Pay, it simply enables the transactions by tokenizing a card, and passing that information on to the payment networks. Accepting Google Pay in store requires a contactless-enabled payment terminal with an NFC reader turned on. Google suggests that businesses should work with POS providers to ensure their systems are ready to accept contactless payment data.

Security Features

Google Pay protects payment information with multiple security layers. It does not store a physical credit card number on a device, and requires that a phone be unlocked for most transactions. Google Pay does not share card numbers in store, but rather a virtual account number, or token, with the retailer. Because it uses NFC technology, Google Pay only works within a few inches of another device, reducing the chances of information being stolen.

Pricing and Fees

Google Pay does not charge merchants fees for accepting Google Pay. When a customer pays in a store with Google Pay, the card network considers it a card-present transaction and the business will pay the associated merchant fees. No special equipment is required aside from a POS terminal that has contactless payment capabilities.


While IDC data shows that Android remains the primary operating system for mobile devices, eMarketer reported that Google Pay users actually lagged well behind those using Apple Pay at around 12.1 million in 2019.

Google Pay Pros and Cons

Google Pay does not have any additional fees or required equipment to allow businesses to use it, and it can be used online or in-store to process payments. Google Pay’s tokenization process means credit and debit card numbers are not collected, thus increasing security for the merchant. Google Pay also works with most large banks and all credit cards, meaning it is easy to use on the consumer side. However, the low adoption rate of Google Pay at this time may mean that many customers who come into the store will not have it set up.


In May 2020, PayPal, which has been in the digital payment business for two decades, announced the availability of contactless payments to allow merchants to take payments directly in store. Using the QR code functionality within the PayPal app, users are able to open their camera, scan a QR code, enter the amount due to the business, and send money immediately. Businesses simply need to generate a PayPal QR code and display it at their shop.

PayPal also offers hardware in the form of a credit card reader that allows customers to do a contactless payment with a microchipped credit card or other contactless payments like Apple Pay and Google Pay.

How to Set Up PayPal Contactless Payments

To begin accepting contactless payments, sellers must have a PayPal app. They can then download a QR code from the PayPal app, print it, and display it at their business. There is no special equipment required, though customers must have the PayPal app downloaded on their devices. PayPal allows you to order printed tabletop displays, stickers or wallet cards with lanyards printed with the QR code, or sellers can download and print it themselves for free.

Security Features

PayPal says that it provides one of the most powerful online risk management systems in the world and leads the industry in privacy and identity protection, with an industry-leading loss rate of less than 0.5%. The company has implemented a variety of fraud prevention tactics, including data encryption, safeguarding financial information by not sharing buyers’ financial information, and other strategies. PayPal also places a hold on funds during any payment dispute until the issue is resolved.

Pricing & Fees

PayPal’s contactless payment option is relatively new, and the company is waiving seller fees until 2021. Beginning January 1, 2021, sellers will pay 1.90% plus $0.10 per transaction. Merchants will also pay other relevant merchant fees from card issuers and banks.


PayPal is a widely used solution, with 346 million active accounts globally, 3.7 billion payment transactions and $222 billion in total payment volume in Q2 of 2020.

Pros and Cons

PayPal’s wide use and merchant-friendly policies make it a good choice for small businesses looking to accept contactless payments—particularly if they do not have a POS terminal or are typically a cash business. 

However, PayPal’s QR code transactions mean that your buyers must be able to access the internet or data to complete a transaction, so your store must have good service or Wi-Fi they can log in to. 

The transactions also rely on the buyer inputting the correct amount and displaying it to the seller, so additional staff training may be required to effectively process these transactions.


In July 2020, Venmo, a mobile payment company owned by PayPal, launched a limited pilot of new tools for sole proprietors with the introduction of its Business Profiles. These profiles offer contactless payments with a business-specific Venmo QR code.

How to Set Up Venmo Contactless Payments

A sole proprietor who wants to accept contactless payments through Venmo must have a Business Profile, which is currently available by invitation only. Larger businesses, meanwhile, can register for a Business Profile by creating an account on Venmo. From there, they’ll need to use an in-store QR code, which can be downloaded within the app and printed.

Customers paying through Venmo can tap the scan button at the bottom of the home screen, and follow the prompts. Alternatively, the business can scan the customer’s QR code to pay, and the user needs to enter the payment amount manually.

Security Features

Venmo uses encryption to protect account information and monitors account activity to help identify unauthorized transactions. Users can also protect their accounts through security features within the app.

Pricing & Fees

Business profiles for sole proprietorships do not currently have fees, but in the future, those with such profiles will pay 1.9% plus $0.10 for every payment made. This is also the current fee structure for Venmo Business Profiles. Users who pay with credit cards also pay a 3% fee, but are exempt when paying a business profile. 


Venmo has more than 60 million users and is commonly used for peer-to-peer transactions, though it has only recently begun to enable business transactions.

Pros and Cons

Venmo for Business Profiles is not currently available for sole proprietors without an invitation, though larger businesses can sign up for accounts now. The transactions are smooth for the customer, and do not have any associated fees for sending or receiving money. However, similar to PayPal, Venmo in-store contactless transactions are done with a QR code, which requires the staff to be trained in accepting these transactions and for the users to input the payment amount manually. 

For businesses without a POS system, Venmo transactions can be a feasible way to accept payments without contact.

The Bottom Line

Contactless payments continue to rise in popularity. 

The best contactless payment app for any business depends on the business structure, customer base and how the business is already accepting payments. 

For businesses with POS systems, Apple Pay and Google Pay provide easy options for accepting contactless payments without major changes for the customer or business.

For companies without a POS, PayPal, and Venmo provide options for accepting cashless, contactless transactions in a way that is easy for the customer, but may require some training for the staff. 

In either case, the growth of contactless payments means that most businesses that accept in-store transactions should consider their options for these very prevalent commerce solutions.