Mastercard Sees Global Surge In Contactless Payments

Jul 22, 2020

According to an international study conducted by Mastercard in 15 countries, new payment habits by consumers are rapidly developing due to the COVID-19 restrictions. More and more consumers are abandoning the use of cash and instead are embracing “contact-free” and “digital payment experiences”. 

Two Prominent Trends Found

  • Moving Away From Cash In The Store: Almost 7 out of 10 consumers say that the move over to digital payments will more than likely be permanent. The survey that was launched back on April 27 also cited that almost 50% of consumers will be using less cash, even after the pandemic is over. 

Since the outbreak of the pandemic, 46% of consumers in the Asian Pacific have expressed using cash less often. Two-thirds of Latin American consumers stated that they are using less cash or simply not at all. Europe being the earliest adopters of contactless payments of all regions, 64% have mentioned that the “tap and pay” feature is their favorite way to pay “in-store”.

  • A Sharp Increase In e-Commerce: According to Mastercard SpendingPulse1, which focuses on measuring retail sales for cash and check throughout the U.S., found that e-commerce spending increased by 93% “year-over-year” for the month of May. For the months of April and May, e-Commerce reached 33% of total retail sales in the U.K. alone. This was considered a record-breaking high. 

Jorn Lambert, Executive Vice President of Digital Solutions had this to say:

“While no one could have predicted the state of the world we’re in today, it has reinforced the necessity for us to continue evolving the consumer payment experience to meet the consumer wherever they are. We’ve been focused on building our Digital-First capabilities for years, which have enabled this accelerated shift to digital payments – it’s unlikely consumers will revert to old payment habits.”

Mastercard Is Leveraging Its Insights And Technology

Mastercard is spearheading the future of payments with the use of innovative technology and forming essential partnerships. Here are some of the latest innovative technologies being implemented:

  • The Use Of “Non-Sensitive” Data To Improve Security: With the use of Mastercard Digital Enablement Service (MDES), all card numbers are converted into tokens so that they are worthless to cybercriminals. It also removes the frustration of having to update card information manually. 
  • One-Click Payments Expedite Checkout: Their “one-click checkout experience” called Click to Pay also uses tokenization to protect sensitive card information, without having to rely on passwords. Over 10,000 merchants are able to utilize Click to Pay, including Crate & Barrel, Expedia, and Saks Fifth Avenue, to name a few. 
  • Digital First Debit Card: Mastercard has been shifting its focus from physical cards to designing digital products, making physical cards optional. They have partnered up with Samsung and SoFi to premiere a Digital First debit card, “backed by a cash management account called Samsung Money by SoFi.”

Pandemic Has Ushered In Unprecedented Change

Although this global pandemic has brought incredible challenges and concerns of uncertainty, it has also brought upon a change in consumer spending habits. More consumers than ever have adopted more “digital-savvy” measures to get things done and purchase the things they need. 

Mastercard hopes to aid consumers in embracing the new payments technology.

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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.

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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.

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