With the onset of covid, contactless payments have revolutionized the way we buy things without sacrificing our safety. Through a simple tap or wave of our debit card near a card reader, we can now make purchases and payments without worrying about physical contact with strangers. This has not only made buying things easier, but also faster and more secure as well. Contact-free payments are becoming increasingly popular due to their convenience and assurance of germ-free transactions. It’s no surprise that these modern payment methods have become even more useful during covid—as our world relearns how to do things at a safe distance.
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Data for today’s episode is provided by Mercator Advisory Group’s report –COVID-19: The Power Behind Contactless
Contactless Payments Pre & Post COVID-19:
- While there was a 5% increase in contactless between 2018 & 2019, PIN and signature transactions were far more common.
- 18% of consumers used contactless in 2019, compared to 13% the year prior.
- Much of the jump in transaction activity over contactless is linked to the issuance activities of the largest financial institutions.
- In 2019, 40% of consumers paid for items in a store without a PIN or signature.
- In 2019, 57% of consumers paid for items in a store by signature.
- In 2019, 67% of consumers paid for items in a store by PIN.
- Before COVID, issuers were hoping to capture a greater share of cash transactions with contactless – that job might’ve just become much easier.
COVID-19 has created consumer interest and use of contact-free payment experiences as fear of infection from surfaces, including a point-of-sale (POS) device, drives new behaviors. While reports and surveys proclaim cardholders’ interest in contactless technology, the actual number of contactless debit transactions authorized on a contactless card or mobile app remains elusive. This report, COVID-19: The Power Behind Contactless, considers the available market data and Mercator Advisory Group research to better understand the level of contactless payment activity and the degree to which COVID-19 is affecting its growth.
“The onset of the coronavirus created the perfect storm of events that is driving awareness more quickly than all the promotional activities have to date. Cardholders’ wellbeing is the incentive to adopt a new payment method. More consumers are now aware of the contactless capabilities they have on their debit card, which is driving new users in addition to increased use by current users,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and author of the report.