Why Are We Only Now Understanding the Importance of Contactless Payment?

If the coronavirus pandemic has had one positive effect, it is undoubtedly the rapid growth of technological adoption. We have simply been forced to turn to new solutions that make our everyday lives safer and easier to manage. One such solution is contactless payment, which ensures that we do not have to pay with cash, especially as the virus has been proven to remain viable on this surface as well. Even if we use hand sanitiser, it makes little sense if we then pay for a product or service with banknotes.

A portion of the Hungarian population still does not like paying by bank card and continues to use cash wherever possible. However, this is not a sustainable payment solution for the economy — not for the state, not for merchants, and not even for customers — especially during a pandemic. In many ways, the coronavirus has opened new doors for us in the field of technology, whether we think of distance learning, remote work, or new opportunities in card-based payment. It is also impossible to ignore the fact that the currently unpredictable economic crisis will have a serious impact on banks as well. However, the instant transfer system introduced at the beginning of March could become a real trump card for the banking sector.

Financial technology has been experiencing unprecedented growth over the past 10 years. Contactless PayPass payment appeared as a development by Mastercard, naturally pushing competitors into the so-called “FinTech revolution” as well. One-tap PayPass payment has become part of our everyday lives because it not only saves customers time and money, but also makes purchasing as convenient as possible.

From 2 March this year, instant 24-hour transfers became available for retail and corporate customers through the Instant Payment System, known in Hungary as AFR. This system ensures the smooth, secure, and real-time flow of money between parties. Transfer transactions are completed in less than 5 seconds, with the exception of batch transfers, which remain subject to the usual transfer rules. According to experts, this may be the solution that measurably reduces the level of cash withdrawals, which in turn could clearly reduce the intensity of Hungarian forint banknote issuance by the Hungarian National Bank. Several banks have also made cash deposits available to customers through ATMs, which likewise supports the reduction of banknotes already in circulation.

The instant transfer system opens new doors in banking, as payment requests — already active in the Revolut application — may soon become widely available. To use them, all we will need is a secondary identifier, such as a phone number, email address, or tax number. This solution could become a perfect replacement for paying traditional yellow postal cheques — for example for electricity, water, internet, or TV bills — reducing the service provider’s payment collection process to a fraction of its current complexity. Payment request as a financial solution is currently only optional, but some financial service providers are already using this payment method.

Budapest is clearly one of the defining cities of the Central European startup world, providing an ideal economic environment and tech ecosystem for developing the financial solutions of the future. One example is Rollet, a company that turns the user’s car into a rolling bank card.

Rollet is an innovative service that enables drive-through payment by car. Thanks to Rollet’s vehicle recognition technology, the car essentially becomes a payment device, eliminating the need to queue at parking meters.

The contactless Rollet payment process:

1. The user registers their personal details, the licence plate number of their car, and the bank card they wish to use in the application.
2. Contactless payment becomes immediately available to the customer after registration, as the payment operation is completed through camera-based vehicle recognition and the car simply driving through. The automated payment process takes only 2 seconds.
3. At the end of a successful transaction, the user receives an electronic receipt for the paid service. Businesses can also request a VAT invoice through the application.

Drive-through payment is currently active in the parking sector and is available at more than 30 locations nationwide, including Budapest and several cities outside the capital, as well as Debrecen International Airport, where the internationally awarded payment solution was first applied in an airport car park.