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Ann WilkinsonDec 7, 2021 4:01:31 PM4 min read

Contactless vs cashless payments – what’s the difference?

Although the terms sound very similar and are often used interchangeably, there are some marked differences between contactless payments and cashless payments. For the U.S. market ‘touchless payments’ or ‘wave and pay’ are also very popular alternative names for contactless.  

So if you’re looking into offering a cashless payment system at your event or venue, it’s vital that you understand the differences between the two types of systems and the benefits each type can offer.

Make the wrong decision and you will miss out on the opportunities to collect first party customer data which can be used to gain insights to help maximise sales, reduce administrative costs and improve the fan experience.

What are contactless payments?

Contactless payments are transactions that are completed using contactless cards, or by mobile phone. 

Instead of swiping or inserting your bank card into a reader and typing a PIN, you simply ‘tap-and-go’ or ‘wave and pay’. To make a payment, you place your bank card or contactless-enabled mobile phone near the reader. An initial set up and verification is required to enable a mobile phone for contactless payments. 

Contactless payments use either near-field communication (NFC) or radio frequency identification (RFID) technology. Bank card payments, RFID (commonly used in wristbands or cards) and mobile wallets such as Apple Pay are all examples of contactless payments. 

A brief history of contactless payments

It’s hard to believe that it’s only 2007 that contactless cards first appeared in the UK. Today, and in no small part due to the global pandemic, which saw mass adoption of contactless payments across the world, contactless payments are ubiquitous. In the UK 83% of people now use contactless to make payments. In the US, the adoption of contactless cards has been slower in part due to lack of contactless infrastructure but this is improving and the popularity of contactless payments continues to grow.

What about contactless payment made via mobiles?

Whereas contactless cards are readily used across all age groups, there’s a marked skew towards younger people paying contactless via their mobile phones. Google Pay and Apple Pay are two of the most popular third party mobile wallets today with adoption rates much higher for younger users.

What are cashless payments?

A simplified explanation of cashless payments is a type of payment that is made without using cash. Bank transfers, credit card payments, mobile payments and digital wallets are all examples of cashless payments. The customer doesn’t need to have any cash on them to complete the purchase.

However in the events industry we define cashless payments as much more than simply payments that are made without using cash. Cashless payments systems are in fact a means of creating a financial ecosystem, which eliminates the need for third party involvement. Instead, the buyer and seller join a payment system and the data is collected and held within this system.

Still not clear? It’s all about who owns the data

The marked difference between cashless payments and contactless payments comes down to information flow and who owns the customer transaction data. Let’s take a sports stadium who decide to implement a contactless payment system as an example. The stadium enables customers to pay with their existing contactless bank-issued debit or credit cards or via contactless-enabled mobile phones with Apple Pay and Google Pay.

Every time the customer pays for items in and around the stadium, whether that be food, drink or merchandise for example, all of the customer transaction data and information goes to the bank. The stadium doesn’t have any visibility of what the individual purchased. They don’t have control of their own financial ecosystem. Stadia cannot gain insight into their fans’ behaviour.

Cashless systems operate in a different way. If the stadium implements a cashless payment system, their customers can pay via an in-app mobile wallet (if the stadium has an app) via QR codes, or an RFID wearable. 

The customer securely purchases whatever they want in and around the ground including car parking, programmes, merchandise at the club shop, and food and drink. As there are no third parties, no intermediaries involved, all the data is retained by the stadium. This enables them to understand individual fans’ spending habits, such as what they are buying, when and where, which they cannot get from a standard contactless system. 

Such data can provide information to control stock, offer insights to help improve future events and experiences, and devise tailored, personalised marketing to help reinforce the sports club’s relationship with individual fans. In addition, the technology virtually eliminates payment fraud.

Open loop vs closed loop payment systems

What we’re describing here is a closed loop payment system (cashless payment system) vs and open loop system (contactless payments).

A closed loop payments system operates without any third party (banks) involvement. Instead the end users (event attendees and vendors) directly join the payments system. 

Key takeaway:

Cashless payment systems give vendors ownership over the entire vendor/customer process. Vendors have complete control of their own financial ecosystem and retain all payment data as a result.


The difference between cashless payments and contactless payments all comes down to information flow and ultimately who own the customer payment data. First party data collection is higher priority for businesses today who are battling with the demise of third party data.

The data you get from a cashless payment system is reliable, accurate and can be used in a multitude of ways for competitive advantage.

If you'd like to know more about our cashless payment systems and how they could benefit your business, do get in touch with us.