Tap to Pay: What is it and How Does it Work?

Imagine a customer rushing into your store on their lunch break. They grab what they need, head to the counter, and with a quick tap of their phone, they’re out the door in seconds. No digging for cash, no swiping cards, no delays. That’s the power of tap to pay, and it’s quickly becoming the standard your customers expect. 

With increasing demand for contactless payments, led by younger consumers, combined with Spain’s supportive regulations, the rapid move away from cash and credit cards is not surprising — Spain’s mobile payment market is set to grow steadily, with a projected CAGR of 20.5% between 2025 and 2033. 

As a business owner, it’s crucial to know what this contactless payment method is, how to use it, its benefits, and the devices you need to accept it. In this article we'll discover the types of businesses that use this payment option so you can decide if it’s right for you.

Table of contents

• What is tap to pay?
• How to use tap to pay
• Transaction methods for tap to pay
• What are the benefits of accepting tap to pay?
• Types of businesses that use tap to pay
• How to accept tap to pay at your retail store, restaurant, in your taxi, or on the go
• Accept tap to pay from your phone with MONEI Pay

What is tap to pay?

Tap to pay (sometimes also referred to as tap to phone or tap on phone) lets customers make secure payments with contactless EMV chip cards or NFC-enabled devices like smartphones and wearables. NFC or near field communication is a short-range technology that transfers information between devices without them ever touching. 

It makes processing transactions quicker and more secure because customers can pay without ever sharing their card details.

How to use tap to pay

If your payment terminal has the symbol with four curved lines, portraying a radio signal, as shown below, it supports contactless payments. It will share encrypted information with any NFC-enabled card, mobile phone, or wearable device that’s within two inches to approve or reject the payment.

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NFC allows devices to identify specific frequencies with radio waves. Its specialized frequency of 13.56 MHz ensures accuracy and enables close-range interactions between two devices. It works similarly to other radio frequency identification (RFID) technologies that are used to quickly scan multiple items in shopping malls, grocery stores, and airports. 

Active devices, like a point-of-sale (POS) terminal or a smartphone using Apple Pay or Google Pay, constantly emit radio waves. When two active devices send and receive information across an electromagnetic field, they create an active NFC payment.

Passive devices like plastic credit/debit cards don’t constantly emit radio waves. When a passive device enters an active device’s field, a passive NFC payment is made. As long as you have the right payment terminal, you can accept both active and passive NFC payments.

Tap to pay vs tap to phone vs tap on phone: is there a difference?

The three terms are interchangeable when referring to the technology itself — it works in the same way. But Apple, for example, branded the feature for its smartphone as Tap to Pay on iPhone and for Android devices, it's usually referred to as Tap to Phone (TTP). You might have also heard the term “soft POS” or software point of sale, which refers to a technology that allows you to accept contactless card or mobile wallet payments directly on your own smartphones or tablet, eliminating the need for traditional, separate hardware terminals. This way, you can cost-effectively transform an NFC-enabled Android device into a payment terminal for your mobile checkout needs.

Transaction methods for tap to pay

Originally, this payment method was only possible using contactless cards. Now, there are more ways to make a transaction and this will likely increase over time:

Mobile payment apps

Around 90% of the 8 billion global population owns a smartphone, and according to a report from Banco de España, mobile payments almost doubled from 2022 to 2024, reflecting a shift in payment attitudes, driven by digitalization and the adoption of new technologies.

Most people carry their phones with them everywhere, which is why mobile payment apps and mobile wallets have become so popular.

Customers can hover their NFC-enabled phone over a POS or another device that has NFC (an iPhone or iPad), which will activate their payment app. Their encrypted debit/credit card details are passed from the phone to the payment terminal to complete the transaction.

For example, if the customer has an iPhone, they can either store card details in their Apple Wallet or use Apple Pay for quick, contactless NFC-enabled payments.

📚 Further reading: What are NFC Mobile Payments? All You Need to Know About This Contactless Payment Method

Chip cards

The radio wave symbol that’s on your NFC payment terminal is also on the back of NFC-enabled debit and credit cards. These cards have an EMV (Europay, Mastercard, and Visa) chip that exchanges data to make a payment. Contactless cards are the original tap payment method and they’re still the most popular.

Wearables

It's projected that the wearable payments devices market will be worth $82 billion by 2026. Customer wearing a smartwatch, bracelet, ring, or key fob integrated with NFC technology, can tap or wave their device over the payment terminal to complete a purchase. And because there’s no need for a wallet or even a phone, this is the ultimate convenience for many consumers.

📚 Further reading: What are Instant Payments? (+ How They’re Changing the Industry)

What are the benefits of accepting tap to pay?

Shoppers want it. In fact, it’s projected that by 2026, 32% of all transactions in Europe and 54% globally will be digital wallet payments.

Speeding up the checkout process

A customer can walk into your store, choose what they want, and go to the self-checkout to pay all in under 10 minutes. You and your staff can spend more time helping shoppers when the payment process is quick and frictionless.

📚 Further reading: Cashless Payments: Pros, Cons, How to Accept Them, & 8 Types

Boosting customer satisfaction and loyalty

Increased checkout speed, security, and convenience are more than business benefits. These advantages also help to improve the overall customer experience, which, in turn, boosts customer satisfaction and loyalty.

Increasing sales

Imagine a customer who passes by your store at the end of a run. They want to buy a sturdy sports bottle for their next run, but they forgot their wallet. Their watch, which just tracked their best time in a month, can now be used as a contactless payment method, they don’t feel at all inconvenienced, and you didn’t miss out on a sale.

Improving payment security

According to a European Central Bank survey, payment safety and security are essential among European consumers. Here’s how accepting tap to pay can help improve payment security:

• Encryption. Every time a payment is made, the encryption changes, making it extremely difficult for a hacker to take advantage. Even if they manage to decipher a code, it’ll be too late as it’s only valid for one transaction.
  
• Tokenization. When a contactless payment is made, an algorithm generates a unique random value, replacing a customer’s primary account number (PAN). The value, also called a token, passes safely through the internet, without exposing the customer’s credit card details.
  
• Two-factor authentication. Apple Pay and many other mobile payment methods ask you to set up two-factor authentication (2FA) to verify each transaction with a Face ID, PIN, or fingerprint. So even if your phone is lost or stolen, there’s no way someone else can use it for payment.

📚 Further reading: AI in Payments: How It’s Transforming the Industry

Accepting credit card payments without a terminal

Accepting contactless payments on your phone, means you can process transactions virtually anywhere, without a credit card terminal. You can eliminate costs for POS hardware or extra software, and it makes the whole process faster and easier for customers too, which is likely to boost sales.

Attracting more customers

Different customers prefer different ways of paying. Many elderly people still prefer to pay with cash, but for millennials and Gen Z, digital wallets are now the norm. 

In fact, more than 5.2 billion people (60% of the global population) will use a digital wallet by 2026. In Spain, digital wallets and mobile payments like Bizum are the most popular method of payment in retail stores and restaurants.

Creating time for store staff

Manually processing cash and card payments is time consuming. Smaller lines and quicker transactions are great for customers but they’re also beneficial for store staff. A salesperson can help a customer make a choice, use a mobile POS to take the payment where they stand, and get straight on with the next part of their day.

📚 Further reading: What is Credit Card Processing and How Does it Work?

Types of businesses that use tap to pay

Brick-and-mortar retailers

For brick-and-mortar stores, large and small, it’s invaluable.

Let’s use Jaynie as an example. She walks into “Substance & Style” and is greeted by a staff member who discovers she’s already searched the website for a new handbag and submitted her email address for a 10% discount on her first purchase.

The benefits of omnichannel commerce mean Jaynie’s data is already in the system, so the salesperson can immediately direct her to the handbag she’s interested in. Jaynie left her wallet at home but has her phone with her. She pays for her new purse using her mobile wallet and carries her phone home in her new handbag.

E-commerce brands experimenting with in-person sales (pop-ups or events)

Customers are used to the easy payment methods you offer in your e-commerce store, so if they come to your pop-up shop or your stand at an event, they’ll expect the same level of service. 

Make the payment experience easier and faster for your customers by using an NFC-enabled payment terminal (a mobile POS or your smartphone) to accept contactless mobile payments.

If you're just dipping your toes into physical retail before deciding to open a permanent brick-and-mortar store, using a mobile payment app that supports contactless payments is a great money-saving solution. All you need is your phone, and you can skip the hassle of purchasing expensive POS hardware.

📚 Further reading: How to Accept Card Payments on Your Phone

Restaurants

Your staff serves the finest dessert, followed by an espresso to finish the evening off perfectly for your customers. All that’s left to do is pay the bill. Thankfully, that’s easy too. The waiter takes out a smartphone, your customer pays seamlessly, and everyone leaves with a smile on their face.

Food trucks

Have you ever been to a festival at lunchtime? There are always many options to choose from. The stalls with big queues are tempting because there must be a reason why everyone’s going there. The empty food trucks might be amazing but you wonder why no one’s going there. 

Then there’s the truck with a steady flow. It’s just as busy as the truck with a large queue but everyone’s ordering and paying quickly, mainly because the business lets customers tap their credit card or mobile device over the payment terminal to complete their purchase in seconds.

Taxi drivers

Many customers no longer carry cash. As a taxi driver, you’ve probably experienced waiting for a passenger to get cash from an ATM or to find some in their house, possibly never to return. A better way is to simply pass the NFC terminal (or your NFC-enabled smartphone) to the passenger in the back seat and collect payment.

📚 Further reading: Taxi Card Payments: A Simple Guide to Accepting Cashless Payments in Your Taxi

Nonprofits and NGOs

Let’s say a local NGO sets up a booth at a community festival to raise funds for disaster relief. Instead of asking passersby if they have spare cash, volunteers simply hold out a smartphone. Supporters tap their card or phone, and the donation is complete in seconds. By making giving as easy as buying a coffee, contactless payments help nonprofits collect more contributions on the spot and keep the momentum going at events, fundraisers, and even door-to-door campaigns.

Service-based businesses

House cleaners, plumbers, electricians, personal trainers, or [enter your service], you all need to accept payments. A fast, secure, and convenient method of payment is tap to pay and it’s perfect when you’re on the go. You provide a great service, your customer pays with a tap, and you can quickly move on to your next job.

How to accept tap payments at your retail store, restaurant, in your taxi, or on the go 

There’s more than one way to accept tap to pay, but let's review the most common methods:

Chip reader

First introduced in the UK in 2003, Chip and PIN readers have evolved to accept contactless payments, with the first contactless credit card appearing in 2007. As long as your Chip reader, which is also known as a chip card reader or chip card terminal, has the contactless symbol, you can use it.

Tap to Pay on iPhone

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With Tap to Pay on iPhone, you can securely accept contactless payments by adding a mobile payment app to your phone. You don’t need to purchase any extra POS hardware for this. Simply install the app and start selling products wherever you are using your phone to accept various payment methods.

Tap to phone on Android

The technology is also available for Android and works similarly, but for Android devices, it's referred to as Tap to Phone (TTP). All your customers have to do is tap their smartphone or wearable (with a mobile wallet installed) over your NFC-enabled payment terminal to complete the payment. 

Tap payments on a tablets

As long as your tablet has NFC functionalities and you have the right payment app installed, you can also accept contactless payments. Tablets can be especially useful in brick-and-mortar stores, where you can use them as a sales tool and collect payment at the same time. 

Accept tap to pay from your phone with MONEI Pay

Now that you understand how tap to pay works, the benefits, and the devices that support these contactless payments, the next step is bringing this convenience to your business. With MONEI Pay and your Apple or Android device, you can accept secure payments directly from your phone — no extra hardware required. Get started today and give your customers the fast, simple, and seamless checkout experience they expect.

Alexis Damen

Alexis Damen is a former Shopify merchant turned content marketer. Here, she breaks down complex topics about payments, e-commerce, and retail to help you succeed (with MONEI as your payments partner, of course).