With the pandemic in play, contactless payment adoption is at its peak. In this article, we cover how businesses that are quick to invest in high-tech contactless payment channels will reap the greatest rewards.
The way we pay has changed forever!
Contactless payments seem to be having their much-anticipated moment.
The pandemic, of course, has a role to play in this massive adoption.
With consumers craving touch-free, hygienic payment alternatives, the need to shift to contactless payments has never been more compelling; and I say this from both the consumer’s and the merchant’s point of view.
The numbers testify to this new reality. Owing to safety concerns, MasterCard reported that today, eight in ten shoppers in America use contactless payments. In Europe, consumers are now increasingly investing in wearable devices that support contactless payments. The UK just went all out and more than doubled the contactless payment limit to £100.
Visa’s Back to Business Study claims that contactless payments have brought about the biggest shift in shopping behavior. The study further reported that face-to-face transactions across the globe witnessed a surge in contactless penetration by 43% last year.
During Apple’s quarterly financial call in October 2020, the CEO of Apple, Tim Cook made quite an interesting statement and I quote:
“Contactless payment has taken on a different level of adoption and I don’t think we’ll go back.”
With over 441 million users, today Apple Pay is the third most popular contactless payment solution in the world. China’s Alipay and WeChat are leading the charts with over 1 billion users each.
Undeniably, the adoption of contactless payments has gained prominence as a response to health concerns brought about by the pandemic. However, the proliferation will not end here. The convenience and ease of these payments have ensured that this tap-and-pay trend is here to stay!
While security concerns around data privacy have been doing the rounds, industry experts maintain that near-field communication (NFC) payments are highly secure. With mobile device locks and safer methods of transmission being used – contactless payments stand out as one of the most secure ways to make payments and conduct financial transactions. Organizations today are doing all that they can to add more levels of security to this technology and win over the customers’ trust. Adding multi-factor authentication, enabling device-centric cryptography, and ensuring that all transactions via contactless payments are encrypted, are just some of the efforts that are made in this direction.
It’s time to make way for mobile point-of-sale devices (mPOS).
With an increasing need to find an alternative to touching pin pads or handling cash at checkout counters, tap-to-phone payments are on the rise.
According to a recent survey by American Express, 81% of merchants reported that they plan to make contactless payments, a permanent option for their customers even in a post-pandemic world.
Businesses have been quick to jump on this trend. With an aim to streamline the contactless payments option and simplify the process for merchants, companies today are working out ways to turn smartphones into payment processing units.
With the help of NFC, smartphones will be able to process transactions with the tap of a phone or a card. A handheld payment terminal will enable merchants to accept payments on the go.
This marks the next big opportunity in the payments ecosystem. There is a significant uptick in need for mPOS terminals, with over 20 million devices being shipped globally this year.
Compared to conventional POS devices, mPOS is more cost-effective and can be integrated easily into an existing bill payment solution or a mobile wallet app.
The likes of Apple and Visa are already making advances in the field to capture the proximity mobile payments market.
Convenience is cited as one of the main reasons for the growing popularity and adoption of contactless payments. Being 10 times faster than other modes of payments, contactless payments take the cake for quick, hassle-free checkouts.
So, one thing’s for sure, contactless payments adoption is at its peak. Businesses that are quick to seize the opportunity and invest in high-tech contactless payment channels will reap the greatest rewards. Act now or get left behind.
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Chief Executive Officer, Opus