Contactless payment options are surging in the wake of the coronavirus pandemic. Forecasts for the digital payments market are robust; it’s currently projected to grow at a compound annual growth rate of 13.7% between 2021 and 2026.1 It’s not only because people are more often shopping online. Governments are welcoming contactless solutions to fight counterfeit currency and reduce the cost of printing currency. The overall effect has been a rapid shift in how we pay for goods and services.
What Are Contactless Payments?
Contactless payments don’t require a direct handover of cash or another method of payment. There are two forms now available:
- Contactless Technology: Embedded directly into a credit/debit card, the contactless elements are read by a payment terminal with near-field communication (NFC) capabilities. The customer just has to hold the card near the reader to complete the transaction, with no need to insert it or hand it over to a cashier.
- Mobile Wallet/App Payments: Mobile wallets enable you to make payments using your smartphone. All the while, you can verify your account with a PIN, password, or even fingerprint or facial recognition. Stores and e-commerce sites are also increasing acceptance of mobile payment applications like PayPal, Apple Pay, and others.
Why Digital Payments Are Popular in the Pandemic
E-commerce surged more than 32% in Q4 2020 over the year before, with Amazon leading the way. During this time, over $1 of every $5 spent on retail purchases was through online channels.2 MasterCard alone reported a 40% jump in contactless payments in the Q1 2020, according to CNBC3, while Visa reported a 100% year-over-year increase in tap-to-pay transactions.4
Retailers have been forced to adjust to pandemic-era guidelines. The less contact an individual has with others, the lower their chances of being infected and getting COVID-19. With social distancing and lockdowns, consumers resorted to online shopping. In addition to things they’d buy in stores, people also used contactless solutions to stream videos and movies.
The Growth of Contactless – and What That Means
Contactless card technology is now supported by almost every major credit card issuer in the United States, but, as recently as 2016, just 3% of credit cards were equipped with contactless technology.5 Even if your card doesn’t have the latest technology, it can still be added to a mobile wallet, so you can use your smartphone to make touch-and-go payments.
The growth of contactless has also coincided with an increase in demand for smartphones globally. It’s become clear how important e-commerce is, especially where small- and medium-sized businesses help drive the economy. Contactless payments not only support digital payments during COVID-19; they are faster than other methods and cut costs related to IT infrastructure, recruiting, and procuring point-of-sale terminals and other equipment.
Is Cash Going to Disappear?
The current trends are accelerating the process of transition to more card-focused transactions, but cash will still be relevant, especially among the elderly and low-income consumers. It would also be harmful if access to banks and ATMs was reduced. Many people still rely on cash, and the latest technologies are simply not accessible to some.
Are Contactless Payment Methods More Secure?
Contactless systems use the same layer of protection that card chips use. While contactless payments happen in a fraction the amount of time, they leverage the security of a one-time token. This token has no card information. It cannot be used to make additional purchases if the transaction is compromised. Tokenization prevents unauthorized access to card data, even if a hacker were to try to get close enough to the equipment.
Invest in Advanced Mobile Payment Processing Solutions
Digital payment in the pandemic is one of the advances we’ve seen gain traction over the past couple of years. Contactless payment options are more accessible than ever before. Adept Payments offers payment processing services that support mobile transactions and contactless payments, so you can provide customers with a greater degree of flexibility than ever before.
Our mobile payment service includes NFC-enabled wireless card readers, QR code scanning, and payments via text message or mobile bank transfer. We also offer high fund-transfer speeds, data security, data tracking, and full merchant support, among other features that merchants have benefited from with online payment during COVID-19. To learn more, speak to our knowledgeable professionals who can answer your questions and provide a custom solution for your business. Call Adept Payments at 888-732-3838 today.