Multibanco: Why are there places that don’t accept Contactless?

After having analyzed a little the situation of the many commercial establishments in Portugal that still do not have ATM terminals for more practical payments, we also have to look at another situation that is equally curious in this small piece of land planted by the sea.

After all, you have certainly already tried to make a payment by card contactless on a terminal that indicates that it supports this technology, but the payment failed. Do you know why?

Multibanco: Why are there so many places that don’t accept Contactless?

So, in case you didn’t know, the introduction of contactless terminals and cards with technology support started just over 10 years ago on a global scale. However, Portugal is a different market! All because it is a market more or less dominated by banking, which in turn relies on the national Multibanco scheme.

In other words, in essence, contacless is a competing technology, which has only just begun to gain some popularity in our market due to the entry of fintechs in Portugal, as well as the increase in tourism, and of course, the great investment of Google and Apple in their own payment technologies (Apple Pay and Google Pay).

• Note: Not to mention the COVID-19 pandemic, which also served to push this technology a little further, by allowing payments to be made without having to touch terminals, or touch cash.

In short, contactless payment is simpler, faster, and in reality it is also more hygienic, and is also extremely safe, despite the many rumors and myths that we can read on the internet.

However, despite growing every year in Portugal, it is still very common to find establishments with ATMs that do not support contactless payment.

The reason is curious!

After all, as it is a competing technology, Portuguese banks never felt the need to integrate or develop it. Competitor? Yes! Contactless technology is supported by the international payment scheme (Visa or Mastercard), whilst in Portugal the most normal option is to use the Multibanco scheme. Therefore, if the terminal does not accept all schemes, contactless payment is not supported.

It is undeniable that we have seen a lot of innovation in this area, especially after the big investment made by the aforementioned Google and Apple with their Wallets. Of course, they also use the same contactless technology as the latest ATM cards. A strong bet that is actually “killing” the ATM card as we know it.

It is also here that we saw a big investment in the MB Way product! Which for now only works in Portugal, but is growing in other regions, thanks to the many added features it brings to the table, in addition to simple contactless payments.

Interestingly, this is also the explanation why we had to wait so long before it was possible to put our bank cards in Apple and Google wallets. This is to enable payments via smartphone or smartwatch. Portuguese banks. they started to see some flow of customers to Fintechs, and therefore, they had to move a little.

Is there a higher fee for contactless?

As we said in the ATM article, many commercial establishments choose not to have payment terminals, or limit payments to certain amounts. This is because all transactions have an associated fee.

This payment for each transaction can end up “eating” the profit from the products sold. Especially if they are products with low margins. Furthermore, it is also a way to facilitate tax avoidance, especially in businesses with weak stock management (Example: cafes and restaurants)

Well, this gives the idea that contactless has an extra fee associated with it, or a higher fee than traditional payments. But it’s not true. There is no distinction between contactless payments and other cards.

In short, the limitation of contactless in Portugal is more associated with what we said above, and not with “extra” fees or taxes.