5 Reasons Contactless Payments Will Outlast the Global Pandemic
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The COVID-19 pandemic has generated fear in both consumers and merchants worldwide. This fear is not unfounded. The COVID-19 virus can be transmitted both via respiratory droplets, such as those produced through a cough or sneeze, as well as by touching infected surfaces, including credit card machines. Shopping is now a public health issue and the Centers for Disease Control and Prevention has recommended using contactless payments as a way to prevent transmission.
In a Post-Pandemic World, Contactless Payment Is Here to Stay
The pandemic has created a surge in contactless payments. Here are five reasons why contactless may continue to be popular even after the pandemic ends:
One of the biggest draws of contactless payment systems is reducing the transmission of viruses and bacteria through surface contact. Contactless payments can be made through various means. One of them is by bringing a smartphone or smart device, such as an Apple Watch, close to the POS terminal.
Mobile wallet payments are made by using Near Field Communications (NFC) technology, which allows devices in close proximity (about four inches) to communicate and share data. “Tap-and-pay” cards use radio-frequency identification (RFID) technology. RFID technology is also used in other industries, such as chips to track pets and inventory.
A second way is to use a “tap-and-go” debit/credit card. And a third is to pay by scanning a QR code using a smartphone. All three methods achieve payment without physical contact.
Touchless payments offer the customer a quicker checkout process. They can be twice as fast as credit card payments and be completed in 15 seconds. If you have a smartphone with face recognition, you can even approve payment simply by looking at the phone without having to enter a PIN.
Contactless payments also reduce the burden of carrying cash or even remembering to get some from the cash machine. With the ability to send and receive receipts electronically there’s even less to carry—something especially useful when managing shopping bags, the kids, purse, and keys.
Mobile wallets don’t exchange your credit or bank data. When making a mobile payment, all your personal banking data can be replaced by non-confidential data through a “token.” The token is then transmitted to the POS terminal, which eventually will be verified with the credit card issuer. If everything checks out, the transaction is approved.
These security features may actually contribute to the growth of contactless payments, because they make consumers feel more at ease in using contactless payments instead of cash or cards. In fact, a total of 48 countries have found them so secure that they have increased their contactless payment limits. In the UK, the limit for contactless payment has nearly doubled from £45 to £100 and in Canada the limit increased by 150% from C$100 to C$250.
Your mobile wallet may even be safer than your real wallet. If you lose your phone, someone else will not be able to use it for payment unless they have a PIN or can cheat a biometric check, such as a face scan (unlikely, unless you’re an identical twin). In contrast, if you lose a wallet filled with cash the only way to get it back is through a good Samaritan.
Related Read: 3 Undeniable Global Stats About Mobile Wallets
It’s a Differentiator (for Now).
Right now touchless pay is a differentiator, but it could be turned into a demand by future customers due to their convenience, speed, and security. The rise of a new type of consumer, Generation Z (those under 40), is expected to contribute to the growth of mobile pay. In 2026, these digital natives are expected to comprise 59% of all consumers in the US market. In addition, the size of the mobile payment market itself is expanding. According to a report by Fortune Business Insights, in 2019 the global mobile payment market reached $1.18 trillion and is expected to reach a staggering $8.94 trillion by 2027.
More Payment Methods = More Business.
Some traditional, in-store POS systems only allow merchants to take plastic debit or credit cards. However, other systems are more flexible, allowing customers to pay by scanning a QR code displayed at the store, through a digital wallet, or by texting/emailing the customer a unique URL for payment (Pay by Link). Now more than ever it’s critical it is to accept more payment methods without having to turn people away because of an antiquated payment system.
Multiple payment methods also allow merchants to offer the preferred payment method to different customer segments. For example, when it comes to younger customs, 32% of Millennials use PayPal, while 28% of seniors have an American Express card. These variations also occur regionally with some mobile wallets being a preferred method of payment over others, such as AliPay in China, Paytm in India, Boleto Bancário in Brazil, and PayPal in the US.
Request a Demo of the Citcon Payment Gateway
Ready to improve your business’ customer experience by accepting more contactless payment methods? Citcon allows merchants to accept digital payments across platforms on a global scale, providing solutions for any device, channel, or business model. Contact Citcon today or request a commitment-free 15-minute demo to learn more .