E-commerce and other payment trends have been gaining speed for some time. However, these trends are now being fueled by the COVID-19 pandemic and the flames are spreading fast. New debit card transaction data released early this month by Houston-based Pulse electronic funds transfer network confirms this.
It is safe to say we are living in unprecedented times. As stay-at-home policies and business closures/altered operations swept the nation in March, consumers were forced to change their shopping habits. From buying groceries and day-to-day necessities to purchasing clothes and accessories, consumers spending was driven online. Many consumers began turning to options like curbside pickup and meal delivery for the very first time.
CNP Payment Processing Takes Off
Card-not-present (CNP) transactions are nothing new. CNP transactions on debit networks grew 21% in 2019 over 2018, reaching 6.3 transactions per active card. According to the network’s 15th annual Debit Issuer Study, that growth was 10 times greater than the rate for card-present transactions. In fact, card-not-present accounted for 27% of all transactions last year (up from 13% five years ago).
The average ticket on card-not-present transactions also grew nearly 2% to $40.50. In contrast, card-present transactions average ticket fell for the first time from $34.49 to 34.10. This trend has also been influenced by consumers’ fear that cash might spread infection during COVID-19. Fewer and fewer cash withdrawals are being made, according to Steve Sievert, executive vice president of marketing and brand management at Pulse.
COVID Causes Stagnant Trends to Take Off
There are a couple of trends that were previously lagging until the pandemic began and consumer spending shifted online. Contactless plastic has now become a preferred option by consumers who are increasingly wary of touching keypads when shopping in-store. Digital wallets are also picking up speed, although Apple Inc.’s Apple Pay is pushing ahead of rivals Samsung Pay and Google Pay; nearly all issuers are now enabling their debit cards to be enrolled for Apple Pay.
According to data, 17.5% of cards are already enrolled in the Apple Pay service. Meanwhile, the percentages for Samsung Pay and Google Pay are 1.7% and 1.2%. Approximately 40% of enrolled cards now use Apple Pay at least once a year, compared to 23% and 22% for the other two services. Sievert says Apple Pay has quickly positioned itself “far and away the wallet leader in debit.”
Card-Not-Present Payment Processing
As preferences and concerns of consumers continue to shift during COVID, it is important for merchants to meet their ever-changing needs. Ensuring your customers have multiple payment processing options is key – especially during these rocky times. To open a safe and secure merchant account, consider turning to a reputable payment processing company like emerchantbroker.com.
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