What is tap to pay — and can it help you avoid late invoices?

Published Wednesday 10 September 2025

Table of contents

• What is tap to pay?
• How does tap to pay work for small businesses?
• Benefits to your business of tap-to-pay technology
• How tap-to-pay technology helps prevent late invoices
• Is tap to pay safe?
• How to get started with tap to pay
• Using tap to pay technology for faster payments
• FAQs about tap to pay technology

Key takeaways

• Tap to pay uses NFC technology for quick, contactless payments that speed up transactions.
• It helps small businesses avoid late invoices by enabling immediate payment collection.
• Tap to pay offers enhanced security features like tokenization and encryption.
• Xero’s tap to pay product integrates with accounting software to simplify payment tracking and improve cash flow management.

What is tap to pay?

Tap to pay is a payment mechanism that lets customers make “contactless” payments by tapping their card or mobile device against a reader, rather than by inserting the card or swiping it and then entering a PIN.

Tap to pay uses near field communication (NFC) technology to send payment info quickly and securely. Because of this and its ease of use, more consumers and businesses are starting to use it.

Here are some of tap to pay’s key features:

• Speed: it ensures an immediate payment to your small business
• Convenience: it only takes the tap of your card or device to work
• Accessibility: tap to pay doesn’t need a special setup or advanced tech skills to use

How does tap to pay work for small businesses?

Tap to pay makes it easy for small businesses to take contactless payments. Payments over tap to pay are secure and fast – the money reaches you in seconds.

Understanding contactless payment technology and NFC

NFC technology is a wireless technology that allows devices to communicate with each other over short distances(1–2 inches). Its short-distance functionality makes it harder for hackers to mess with and since you have to actively tap your card or device, it helps prevent accidental or unauthorized payments.

Tap to pay devices available to small businesses

You can use tap to pay across different types of devices.

• Mobile devices – including mobile devices like smartphones and smartwatches with built-in NFC chips
• Stand-alone NFC terminals – NFC readers like vending machines or donation kiosks that connect by Bluetooth, USB, or Wi-Fi. These terminals read NFC signals without being part of a full cash register or point of sale (POS) system.
• Integrated POS systems – full cash registers or checkout systems with NFC built into the terminal. They’re typically used in retail or restaurants.

Benefits of adopting tap-to-pay technology

Here are some benefits of tap to pay technology for your small business.

Faster transactions and fewer delays

Tap to pay speeds up checkout and gives customers a smoother experience. It’s quick, secure, and doesn’t need a PIN or signature, saving customers time. And because there’s no chip reader, there are fewer payment errors and technical issues.

Better security

NFC payments have strong security measures.

• Tokenization – the system sends a one-time use code, called a token, instead of a credit card number. Even if a hacker intercepts it, they can’t do anything with it.
• Encryption – transaction data is scrambled so only the payment processor can decode it.
• Authentication – tap to pay uses biometric authentication (like Face ID or a fingerprint) or a passcode to approve the payment.

Convenience for your customers

Customers often prefer contactless payments because they’re fast, easy, clean, and secure. An easier payment process could mean they’re more likely to make additional purchases, which can help boost sales.

Prevention of late invoices

With tap to pay, customers pay right away – before they walk away. This reduces delayed or missed invoices because the technology doesn’t require the use of invoices at all. Funds typically get processed faster than with traditional payment methods, too.

Here’s how it helps with common late payment issues.

• Customer forgets to pay: Tap to pay is an immediate payment at the point of sale or service.

• Manual billing errors: Tap to pay is a direct electronic payment, so there are no paperwork or manual entry errors.

• Slow payment systems: Tap to pay is fast and mobile-friendly.

Is tap to pay safe?

NFC payments have strong security measures.

• Tokenization – the system sends a one-time use code, called a token, instead of a credit card number. Even if a hacker intercepts it, they can’t do anything with it.
• Encryption – transaction data is scrambled so only the payment processor can decode it.
• Authentication – tap to pay uses biometric authentication (like Face ID or a fingerprint) or a passcode to approve the payment.

How to get started with tap to pay

Use these steps to get started with tap to pay:

1. Choose a compatible payment platform

Here are some major processors that support tap to pay:

• Square
• Stripe
• GoDaddy
• Venmo
• Adyen
• PayPal/Zettle
• Clover
• Shopify POS
• Revel Systems
• Toast
• SumUp

Xero accounting software integrates with several payment processors for tap to pay functionality, like Stripe.

2. Configure payment devices

Follow these steps to set up your hardware.

• Select your hardware: Depending on your needs, this may include a standalone NFC card reader, a mobile phone, or an integrated POS system.

• Connect the reader: Establish a connection via Bluetooth, USB or a dock, or with built-in.

• Download the app or software: Install the payment processor’s app on your mobile device. Then sign in or create an account and link your bank account to receive deposits.

• Enable NFC payments: Turn on NFC in the app or device settings.

3. Train your team on how to use tap to pay credit card options

Here are things to teach your team about tap to pay.

• The basics of how the tap to pay works: Help your team understand that tap to pay uses NFC to process payments with devices held 1–2 inches from the card reader. Teach them the types of payments that work with tap to pay, such as tap-enabled credit or debit cards, mobile phones, and smartwatches.

• Tap-to-pay user technique: Make sure you’re comfortable showing customers how to place their card or device near the payment terminal.

• Consider common issues: Learn and teach your team how to handle common issues when using tap to pay so they can help customers. For example, the need to re-tap your card closer to the payment terminal, or to ask customers if their card or device is set up for contactless payments.

• Security: Train your staff to help customers feel confident using this technology by letting them know it’s encrypted, secure and that transactions are instant.

4. Integrate with accounting software for better tracking

Tap to pay connects with Xero to automate your bank reconciliation. For example, It works directly with a Stripe account through the Xero Accounting app. When a customer uses the Xero Accounting app to use tap to pay, the payment goes through securely. Xero then marks the invoice as paid and gets it ready for bank reconciliation automatically.

Mistakes to avoid when using tap to pay technology

Here are some mistakes to avoid when using tap to pay:

Know your tap to pay upfront costs

There are upfront costs when adopting new payment technology. For example, a mobile tap reader costs up to $100, while an integrated POS system can be anywhere from $500 to $2,000 – and possibly software, subscription, and transaction fees.

But it should pay off in the long run.

Tap to pay makes checking out faster, which can turn into more sales per hour. More convenience should mean happier customers who are more likely to return to your small business and spend more. Tap to pay also means fewer late or missed payments, since tap to pay transactions happen at the point of sale or service.

Here are some ROI tips to consider:

• Start with a mobile reader as it’s a lower-cost way to test tap to pay – and it’ll give you a chance to gauge consumer interest in it.
• Choose a basic subscription plan with no monthly fees.
• Think about using a payment processor that offers free card readers when you sign up.

Get your customers onside with tap to pay tech

Here are a few suggestions to encourage your customers to use tap to pay.

• Display clear signage near the register: Your signs could read “Tap to pay here”, or use recognizable icons to show you offer this technology.

• Emphasize security: Let hesitant customers know that tap to pay doesn’t share their card number.

• Think of ways to help older adults: Younger consumers may already use tap to pay. Cater to older customers by providing a short demo or reassuring them about tap to pay’s privacy and ease of use.

Use Xero’s Tap To Pay for faster payments

Tap to pay delivers a faster, smoother checkout experience for your customers while letting your small business get paid instantly and maintain healthy cash flow. No card reader or extra hardware needed—just use your mobile phone.

Setup is simple: download your payment provider’s app, link it to Xero, and start accepting contactless payments. Tap to pay works seamlessly with the Xero Accounting app and integrates directly with Xero invoicing. Once a customer taps to pay, the invoice is automatically marked as paid and ready to reconcile.

FAQs on tap to pay technology

Here are some FAQs on tap to pay, to help you better understand this payment technology.

Does tap to pay work for recurring billing cycles?

Yes. While it’s designed for in-person transactions, it can help with recurring billing systems by providing immediate payment at the point of service (when the customer is physically present).

You’ve now received the first payment upfront with tap to pay and can then set up consumers with a recurring billing plan. If a customer’s card fails or the card on file expires, tap to pay provides a secure fallback.

Can I accept tap to pay offline if my internet is down?

Usually, yes – depending on your payment processor, device, and settings. Some tap to pay systems allow offline transactions and process them later when you’re back online.

But there’s a chance of delayed approval, no real-time receipts, and risk of failed payment. Check with your payment processor to be sure.

Will tap to pay work with my existing payment processor?

It depends on your payment processor and hardware. Your terminal or POS system must support NFC technology since tap to pay uses NFC to wirelessly transmit payment data. Check your terminal model to make sure it’s compatible.

Your payment processor’s software must also be able to accept contactless transactions (Square, Stripe, and Shopify all can), and your merchant account needs to allow card-present and tokenized payments.