The Rise of Contactless Payments: What ISVs Need to Know to Stay Competitive in 2025

Tap. Pay. Done. Today’s consumers expect fast, frictionless transactions—and contactless payments are delivering exactly that across every vertical, from wellness to field services to nonprofits.

As contactless adoption becomes the default across industries, ISVs must ensure their platforms are ready to meet modern expectations. Falling behind could cost you merchant satisfaction, market share, and future growth.

In this article, we’ll break down what’s driving the rise of contactless payments, how contactless payments differ under the hood from chip & PIN EMV, how expectations vary across industries, and what ISVs need to do to stay competitive in 2025 and beyond.

Here at Payroc, we help ISVs accelerate time to market with secure, cloud-based payment solutions that support the full range of contactless payments, from EMV tap-to-pay to mobile wallets and more. With remote deployment tools, processor-agnostic flexibility, and dedicated partner support, we help software providers thrive across every industry.

Why Contactless Is Taking Over

While consumers often dislike technology that forces them to manually manage processes (think coordinating multiple remote controls for a TV system or fine-tuning nested, obscure settings on an iPhone), they do like plug-and-play technology.

When it comes to paying for goods and services at a checkout counter or kiosk, tapping to pay is as plug-and-play as it gets. A 2025 global survey shows that 71% of consumers prefer contactless payments over traditional methods—up from 62% in 2022. And 87% of U.S. shoppers prefer using contactless in-store. Compared to inserting EMV Chip & Pin cards at a payment terminal, tapping a card, digital wallet, or smartwatch at checkout feels faster and easier. It’s a more modern, sleek experience that, since the COVID-19 pandemic, also seems safer and more hygienic.

How Contactless Differs Under the Hood

Let’s take a closer look at how contactless payments work.

First, “contactless payments” is an umbrella term that includes a number of different communication technologies. When we talk about tap-to-pay, we’re usually talking about NFC, but there are other contactless-payment data transmission methods as well. And second, the communication technology may be embedded in the payment terminal itself, a special-purpose reader (think fuel pumps or event gates), or in the software. In other words, the contactless capacity may fall inside or outside the payments partner’s scope, depending on the technology.

• NFC (Near Field Communication)—A device (card, phone, or smartwatch) is tapped on an NFC-enabled payment terminal. This includes contactless or dual-interface (both EMV chip and NFC functionality) credit and debit cards as well as digital wallets, such as Apple Pay and Google Pay, on smartphones and smartwatches. NFC is considered secure because its range is just 1.5 inches, it allows two-way communication (which enables the device and terminal to exchange cryptographic messages), it supports tokenization (though EMV contactless cards are not typically tokenized), and it complies with EMVCo contactless specifications used by Visa and Mastercard.
• RFID (Radio-Frequency Identification)—Similar to NFC but used in specific access-controlled or logistics environments. RFID has a longer range (up to 100 feet), communicates one-way (tag to reader), and provides less security (usually no encryption). RFID is less common for consumer-facing payments but is used in certain applications, such as event or theme park wristbands, toll passes, and fuel-station fobs.
• QR-Code—Customers scan a merchant’s QR code (or vice versa) and complete payment in-app. Common uses are food trucks, pop-ups, and small merchants.
• BLE (Bluetooth Low Energy)—Devices with built-in BLE detect each other via Bluetooth and authorize payment passively. This technology is used in some in-app, location-aware, and hands-free payment systems. An example use case is drive-throughs and curbside pickup, where payment is triggered automatically.
• Cloud-Based In-App—On devices that can support it, payment can be triggered by proximity, order placement, or geolocation—no tap needed. Examples are Starbucks app, Uber, and Amazon Go. This technology often overlaps with BLE or geofencing.

Contactless payments made with NFC communication protocol are the most common type. They are almost always a form of EMV payment, yet they differ from EMV Chip & Pin payments after the card read is made. This may seem counterintuitive, especially to consumers. After all, if you have a dual-interface card, aren’t tapping or inserting it—at the same end of the same card—the same thing? The answer is no. Behind the scenes, that tap or dip sets in motion different payment paths.

As you know, EMV stands for Europay, Mastercard, Visa. It’s a global standard developed by the major card companies to improve payment security and reduce fraud. EMV relies on embedded computer chips and other technology—such as a unique, dynamic, cryptographically generated transaction code for each purchase—to authenticate chip-card transactions. EMV replaced the older “swipe” or magstripe technology, which stores static data that can be easily copied, making it vulnerable to counterfeit fraud.

But now, with contactless payments in play, there are two types of EMV payments. When a dual-interface EMV card is inserted, the payment happens via contact EMV protocol. When the same card is tapped instead of dipped, the payment happens via EMV contactless protocol.

For physical cards, contactless protocol skips certain steps in the EMV flow, such as cardholder verification or full online authentication for low-value transactions. The lighter data exchange enables faster transactions. EMV chip transactions, on the other hand, involve more complex back-and-forth, such as cardholder verification method (CVM) checks and issuer authentication. But it’s also important to note that neither form of EMV card transaction—dipped or tapped—uses tokenization. The actual primary account number (PAN) is transmitted in both cases.

For contactless payments made with mobile wallets, on the other hand, the security architecture is more rigorous. The real PAN is replaced with a payment token (DPAN), so the actual card number is never exposed. What’s more, mobile wallets also verify identity via biometrics or passcode before tap.

Why It Matters and What to Look for

ISVs are the technology backbone behind the software merchants rely on in every vertical. Adding contactless capabilities to your payments integration provides you with a number of potential benefits, including:

• Better merchant acquisition and retention as a result of better consumer satisfaction
• Differentiated software thanks to modern checkout flows
• New monetization opportunities via faster funding and other value-added services

It’s no longer enough to have a serviceable payment integration. Today, to ensure you remain competitive, your platform needs a state-of-the-art payment integration that offers merchants and their customers all the expected bells and whistles.

Your payments integration should not only offer contactless terminals and protocols but comprehensively support:

• Omnichannel Capability: Contactless for in-person, mobile, curbside, and kiosk environments
• Device Compatibility: Modern, NFC-enabled terminals with Android smart options.
• Security and Compliance: EMV and PCI DSS built-in
• Cloud Architecture: Centralized terminal deployment and remote updates (ideal for field and unattended payments)
• Developer-Friendly Tools: APIs, SDKs, and test environments for rapid integration

In other words, to meet merchant and consumer expectations for contactless payments, you need a payments partner with deep contactless experience, exceptional technology, and impressive system-design capabilities.

Assessing ISV Vertical Considerations

In addition to embracing general contactless-payments fundamentals, it’s equally important for ISVs to assess vertical-dependent use cases, requirements, and trends. Here’s a sampling of specialty-vertical considerations for contactless payments—plus a mention of Payroc’s experience in each vertical.

As you can see, each unique business sector has its own contactless-payment needs and potential. No matter your software specialty, having a robust, future-proof contactless strategy is a wise move that will pay off now and for years to come.

As you look ahead, also consider other contactless-payment value-adds, such as all-in-one reporting across payment types and terminals, unified APIs to minimize your dev burden, and support for wearables (watches, wristbands, badges), mobile wallets, and future form factors.

How Payroc Helps ISVs Lead in the Contactless Era

It’s for good reason that Payroc is known as the payments platform built for partners. We’re helping numerous ISVs lead in their verticals, and our contactless experience and product offering is a big reason why. We offer:

• Flexible integration models: Hosted, semi-integrated, and cloud APIs
• Vertical-specific hardware: From kiosks to tablets to countertop terminals
• Remote key injection (RKI): Faster scaling with cloud provisioning
• Omnichannel support: Contactless acceptance across web, mobile, and in-person
• Real-time reporting tools: Detailed insights to empower your merchants
• An ISV-first approach: Alignment with your roadmap so we can build with you

Contactless isn’t a trend—it’s the standard. And in 2025, software platforms that don’t support it will fall behind. ISVs who act now can future-proof their products, improve merchant retention, and unlock new revenue streams.