Are contactless payments redefining retail transactions? Or are contactless payments completely creating a new retail future? And if COVID-19 persists, could it even become mandatory for businesses to adopt contactless and cashless payment options? How is the changing behavior of consumers impacting on merchants’ activities? In this blog we explore how this global pandemic gave rise to adoption of contactless payments and redefine the future of payments in the post-COVID world.
What is in a name?
Contactless is a buzz word that has become very fashionable in the payments industry, around the world. Contactless payments are also referred to as tap to go technologies. Commonly used contactless payment options include Contactless cards and E-wallets. The customer places the contactless card near the check-out terminal in order for the sale to be facilitated. To make it safe, the card generates a unique code for each transaction. There is no requirement for a PIN or signature but the card comes with a limit per transaction, which also serves to protect the card holder’s accounts. E-wallets, also referred to as electronic wallets or mobile wallet solutions enable merchants to offer their customers easy, safe and convenient payments. This is one of the most secure payment options due to the use of tokenization. In tokenization, all the sensitive data is replaced with a token or value, protecting the sensitive data from frauds and scams.
The new normal?
The COVID-19 pandemic has changed all facets of life. From the way people work, to the way people buy and pay; these among other changes means globally, businesses have to redefine their operations to suit this new normal. One such new way forward is the increased use of contactless payments, which supports businesses’ efforts to honour social distancing rules, protect their consumers with health concerns and address the changing consumer shopping habits.
In March this year, RTi Research carried out a survey that found out that around 30% of the respondents started to use contactless payments when the pandemic began. And 70% are likely to continue using contactless payments post-COVID-19. Earlier this year, the World Health Organization encouraged increased use of contactless payment options in order to reduce the spread of the coronavirus. Thanks to the COVID-19 pandemic, the industry has seen a seismic shift over the past six months in the way consumers pay.
In a post Covid-19 world, the rise of contactless payments is directly related to our 360 degree understanding of social distancing. Social distancing not only defines the person to person interactions but also defines contact with shared devices in public, for instance the point of sale machines and checkout counters. There are a number of benefits that contactless cards offer to customers and merchants but in this current era of uncertainties, the greatest benefit is enjoying peace of mind with the increased health and physical concerns we are being faced with. Contactless cards have also increasingly used to facilitate purchases during the lockdown period, when movement was restricted.
In these unprecedented times, contactless payments have greatly disrupted the fintech industry. Another contributor to the disruption has been the impact of the Covid-19 pandemic on businesses, globally. The new normal post COVID-19 has been the biggest driver of digitization. Payment service providers such as Virtual Pay have provided fool proof tools for businesses and merchants to operate in the new normal post COVID-19. To learn more on the Virtual Pay service offer, reach us through www.virtual-pay.io