Consumers Choose Contactless Payment Amid Pandemic

Jul 02, 2020

Mastercard held a consumer poll where consumer behaviors in 19 countries around the world were studied and found the adoption of contactless payments surging. During the months of February and March, prohibitions were enforced worldwide such as social distancing. This ushered in a significant shift that a considerable number of consumers used contactless card payments in order to make their essential purchases. 

It was discovered that 79 percent of participants worldwide said that they were currently using contactless payments. Their reasons for moving towards contactless payments were for cleanliness and safety. 

Running To The Store Has A New Meaning

Millions of consumers are finding themselves in a new reality, in the middle of a pandemic. The idea of simply running to the store for basic staples such as eggs and toilet paper has taken on a new meaning. Now consumers must navigate through the “new normal” of practicing social distancing measures such as a limitation to the number of shoppers in a store, standing 6 feet away from each other, etc. As people try to comply with the least contact as possible, they have applied this to their checkout experience. 

Nearly one half of respondents or 46 percent have switched use from their regular credit card to the one that offers a contactless option. For those that are under 35 years old, the percentage soared to 52 percent. The largest share of respondents or 82 percent, believe that contactless payments were “the cleaner way to pay.” They also noted that contactless payments are usually ten times faster than other forms of “in-person payments”. This allows customers to get in and out stores at a quicker pace. 

Although this trend was brought on by the pandemic, it may remain the standard post-pandemic, as many 74% expressed their intention to continue with contactless payments. 

According to Blake Rosenthal, Executive Vice President and Head of Mastercard Acceptance Solutions:

“Social distancing does not just concern people’s interactions with each other; it includes contact with publicly shared devices like point of sale terminals and checkout counters. Contactless offer consumers a safer, cleaner way to pay, speed at checkout, and more control over physical proximity at this critical time.”

Mastercard Has Led The Contactless Movement For Years

It is interesting to note that Mastercard has been leading the way in promoting the “worldwide shift to contactless” for many years, endorsing its straightforward, safe, and quick way to pay. With most consumers concerned with getting in and out of stores, without having to touch any terminals, this has only stimulated growth in contactless transactions. Mastercard revealed that overall contactless transaction growth worldwide was over 40 percent. This all happened in just the first quarter of 2020. The data also showed that over 80 percent of all contactless transactions were under $25. This amount range is usually predominantly cash. 

All countries around the world are at different stages in their adoption of contactless payments. However, Mastercard’s perceptions on both pharmacy and grocery trends demonstrated that nearly all areas of the world experienced a substantial growth in contactless usage in both February and March. 

Looking Ahead

The COVID-19 pandemic continues to cause what seems like permanent shifts to our societies and economies around the world. One thing is for sure, consumers are not willing to sacrifice their health and safety in order to get the products they need. This might be the new way for most credit card companies to do business as usual.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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