The future of payments is facing monumental changes due to the COVID-19 outbreak. Where in the past, businesses were more cautious about implementing contactless features to receive payment from customers, now many are realizing that not adopting contactless could mean the end of their existence.
Days of simply swiping credit cards could become a thing of the past as new methods such as tap to pay is quickly becoming the preferred method of payment amongst customers wary of contracting COVID-19.
Consumers Concerned About Health And Safety
Now more than ever, consumers are less likely to handle piles of cash and coins, knowing that these articles have been touched by hundreds of individuals.
Contactless payments allow for a stable, quick, and “socially distant” form of payment. Also, customers now want products and services that are available “on-demand”. They prefer that these products and services can come directly to the customer, whenever they need it. It is even more clear that customers are willing to pay extra for the convenience of having their needs delivered to their door.
According to a survey conducted by American Express, the data shows that it expects a boost in contactless payments whether they be for in-store, app-based transactions, or online. Furthermore, of those surveyed, 58% of consumers who have previously utilized contactless payments have mentioned that they will continue to use contactless “now than ever before”.
J.J. Kieley, VP of Payments Consulting Group at American Express, says:
“This survey tells us that U.S. consumers view contactless as faster, safer and more convenient than other forms of payments, which is becoming especially important as people are avoiding contact and are considering how to resume in-store purchasing,”
Contactless payment options are a much easier method of payment in order to reduce touching of surfaces as compared to going shopping in-store and having to pay with cash or using a physical card. However, if customers do wish to shop in-store, most major retailers like Target and Costco, have the capability to accept a contactless card by tapping and using mobile wallets such as Apple Pay.
If there is a merchant that cannot accept contactless payments and customers need to swipe or insert their card inside the store, American Express recommends they clean their card after each use in order to avoid the spread of germs.
What This Means For Businesses
Contactless payments are not an entirely new concept. In fact, it has been a prevalent form of payment throughout the rest of the world. However, here in the U.S., the adoption of contactless payments has been relatively slow. According to global management consulting firm A.T. Kearney, in 2018, only 3% of cards used in the U.S. were contactless, where it was already 64% in the U.K. and up to 96% in South Korea.
However, as Americans emerge from the quarantine, they are beginning to realize just how important and necessary contactless payments really are.
For businesses, the implications are evident. Contactless payments will not simply be a good idea to add to their present business model, it will be an absolute requirement. And the sooner, the better. Traditional, “card-present” payment methods will simply not be enough to keep them afloat. They must adopt contactless payment technology to meet the skyrocketing need of less contact. Customers may start requiring that invoices be sent to their email. Businesses may need to start taking payments over the phone.
It is clearly evident that we have emerged from our quarantine into a new reality of payments. As many customers have grown accustomed to staying home and staying away from others, contactless payments have become the new normal to purchase our needs. It is up to businesses to evolve with the changing times we are currently living in.