The outbreak of the COVID-19 pandemic had brought a lot of buzz the use of contactless payment solutions. The thinking is that people are concerned that the POS terminal and cash can potentially be virus laden vehicles of disease transmission. I will leave that to those more scientifically inclined than me to opine on that issue.
Here at Mercator, we have been on top of this “trend.” We have penned several articles on Payments Journal as part of our ongoing coverage of the COVID crisis.
- Giving Contactless a Nudge
- Contactless and COVID-19
- Will COVID-19 Hasten Contactless Adoption?
- The Fate of Cash in a post-COVID World
What we’ve seen, largely via consumer self-reported survey data, is that contactless payments are on the rise. In fact merchants are starting to ask for contactless usage at the POS.
Yesterday Mastercard issued a press release based upon their findings on the use of contactless since the COVID-19 crisis. In a recent multi-country survey they found that 79% of consumers are using contactless payments, further:
In a Mastercard global consumer study, nearly eight in 10 say they use contactless payments
Between February and March, contactless transactions grew twice as fast as non-contactless transactions in the grocery and drug store categories
They go on to say that contactless cards are migrating to the top of wallet as consumers become more confident in using the technology to pay.
It is important to note that there are two types of people responsible for the increase in contactless usage. There are new people trying contactless payments for the first time and those who have were light or moderate users increasing their usage. Of course there are those of us who use contactless payments every time we get a chance.
While these stats and articles are all encouraging for the wide spread adoption of contactless, I think there is still more work to be done to get contactless to go mainstream in the long run. More consumers need to be educated on the benefits of the contactless payment from a convenience, safety and fraud security standpoint. Not to mention the fact that many people do not even know if their card is NFC enabled or not. Additionally, merchant education is pivotal, particularly for the front line staff (think cashiers). Front line staff need to know that contactless payments are accepted and that the hardware is working. For example, every time I check out at my local grocery store, the conversation goes like this:
Me: Is Apple Pay working today?
Cashier: You can give it a try. Sometimes it works sometime it doesn’t
This frequent interaction tells me that the cashiers do not know enough about contactless transactions and that the hardware is not ready for prime time.
In summary, I think that the pandemic has gotten many consumers to think about contactless, try contactless or to use contactless more. That said, there is a lot more opportunity for contactless use to grow – especially in the U.S.
Overview provided by Peter Reville, Director, Primary Research Services at Mercator Advisory Group.