September 22, 2020
Eyes4Research
The pandemic has transformed every facet of the consumer experience. From store capacity limits to mandatory mask mandates, retailers continue to adopt safety measures to stay afloat. With this, contactless payment methods have found their way into the mainstream, as 8 in 10 consumers have changed the way they pay to reduce contact due to COVID, according to a recent study conducted by Visa. Contactless methods range from tap-to-pay cards, smartwatch applications, and mobile wallets. As more businesses offer touchless payment options to consumers, cash may become a thing of the past.
Key Drivers of Contactless Payment
Covid-19 continues to accelerate changes in consumer behavior, as shoppers turn to contactless payment methods to prevent the spread of coronavirus through cash and terminals. According to Mastercard, contactless transactions grew twice as fast in grocery and drugstore transactions between February and March of 2020 compared to non-contactless payments. With this, a growing number of U.S. merchants are adopting no-touch payment technologies to minimize health concerns amongst shoppers.
2. Speed and Security
In addition to minimizing contact with payment terminals, tap-to-pay technologies allow for a quick and secure alternative to traditional methods. Instead of inserting or swiping a card, customers simply hover their device or card over the terminal to complete the transaction, eliminating waiting times and the need to type in a PIN. According to American Express, contactless payment methods are 53% faster than traditional credit cards and 63% faster than paying with cash. Touchless transactions are also more secure compared to traditional EMV cards, as touchless transactions do not contain the user’s name, security code, or billing data.
The Future of Contactless Payment
Though it may be years before the U.S. fully phases out the use of cash, the global contactless payment market is predicted to grow at a CAGR of 12.8% from 2020-2026, as stated by PR Newswire. To adapt to consumer preferences and create a safe transactional experience, businesses both large and small must integrate contactless payment terminals into their operations. Despite the growing need to adopt these technologies, there are several hurdles to overcome before touch-to-pay becomes ubiquitous including the high cost of integration, consumer fears over security, and transaction limitations. Despite this, the integration of touch-to-pay technologies ceases to slow down, as the future of the brick and mortar experience depends on creating a safe and efficient environment for shoppers.
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