Canadian Underwriter

Contactless payment in a pandemic: There’s an app for that

May 29, 2020   by David Gambrill

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Retail clients of brokers and insurers can now prevent the spread of the novel coronavirus by taking advantage of digital, contact-free payment methods now available on mobile apps.

Increasingly, businesses will have to operate within the health and safety guidelines developed by government, including requirements to maintain physical distances. But current payment systems often require customers to come into closer contact with merchants and employees, thus creating a potential liability risk for the P&C industry’s retail clients should any such contact result in the transmission of COVID-19, says Jonathan Hoyles, CEO of Perk Labs.

For Hoyles, one liability exposure for merchants is payment at the point of sale.

“The banks, credit card companies and payment processors have been emphasizing the need to prevent the transmission of disease, because the virus can live on plastic and other materials for up to three days,” Hoyles told Canadian Underwriter recently. “They are instructing people to do things like disinfect payment terminals. Or I have seen some notices where they are telling their merchants to wrap the payment terminal in saran wrap or a plastic container.

“They are also giving instructions to tell customers about the use of tap, contactless payment, the ability to tap your plastic card or phone over the card reader. That type of contactless payment is still of much closer proximity to the cashier. You are still getting close.”

Hoyles has a commercial interest in coming up with an alternate form of contactless payment; one that does not rely on proximity to a fixed terminal. His company, Perk Labs, is developing an app-based, contact-free payment technology that uses QR codes – a type of barcode. His business has developed a mobile app called Perk Hero.

“With a QR code, you can scan it from a very safe distance,” Hoyles said of the basic technology. “It depends on the size of the QR code; the bigger the QR code, the further back you can scan. It could be more than six feet away, so it’s a safe distance away. It’s about creating a safer working environment, and a safer shopping and dining environment for shoppers and guests. And really decreasing your [clients’] risk of claims relating to not providing a safe environment for staff and guests.”

The mobile app created by Hoyles has a merchant-facing side and a customer-facing side; the app essentially links the QR code to the customer’s preferred payment method.

“There are two kinds of QR codes, dynamic and static,” as Hoyles explained. “With the dynamic QR code, the merchant can simply enter an amount [into the mobile app], say for $25, and the app generates a QR code for $25. The user (or consumer) then scans the QR code and [the consumer’s side of the app] goes to a screen where the consumer can just press, ‘Pay.’ You can link the app to your Apple Pay or Google Pay, Alipay, any of the major credit cards, and you instantly pay.” A copy of the receipt gets emailed to the consumer when he or she makes the payment.

Of particular note to insurers may be where this mobile technology could be going. Right now, the contactless mobile pay technology covers off situations in which customers pay merchants or businesses. But down the road, the mobile app technology may allow businesses to make contactless digital payments to consumers.

Just think: Paying out your client’s claim with no paper cheques, just the scanning of bar codes produced on a mobile app. Stay tuned.

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