It doesn’t take a payment expert to tell that Contactless payments have popularized this year, thanks in part to the ongoing global health crisis.
But being a multifaceted payment avenue that requires both shopper and merchant adoption, mainstream adoption may not happen as fast as we speculate.
While COVID-19 may have pushed buyers to try contact-free payments, existing data does not show huge mainstream adoption.
According to Fiserv Inc.’s The Harris Poll, 19 percent of interviewed US grownups cite tap-and-pay cards as their favorite option. A whole 48 percent preferred the chip. The Fiserv poll conducted in May interviewed over 3000 US adults.
But why aren’t customers using tap-and-pay? Perhaps the problem lies with retailer acceptance and availability.
About 58 percent of merchants allow tap-and-pay transactions, a significant boost from 2019’s 40 percent, as hinted by data from the National Retail Federation.
Furthermore, 69 percent of the interviewed merchants cited witnessing a boost in contactless payments.
Even though 94 percent of retailers admitted they expect mainstream contactless adoption in the coming 18 months, existing customer data points otherwise.
The Challenges Facing Contactless
So why do customers still prefer inserting a card over paying contactlessly?
The number-one challenge is consumer shopping habits. Overall, shopping has gone down, but maybe more significant are the changes in people’s shopping habits.
McKinsey and Co. interviewed over 2,000 US shoppers in June. During the study, 75% of subjects admitted to having tried a new shopping habit amid COVID-19.
Nearly ⅓ admitted to using grocery delivery frequently for the first time, and approximately ¼ said they’re using curbside pickup often for the first time.
A contact-free solution makes little sense if the buyer is no longer visiting the physical point of sale.
Consumers have gotten used to the convenience of products like grocery shipping to their doorstep and may likely never go back to stores even if the situation allows.
Factor number-two is acceptance at the point of sale. By last year, less than half of merchants supported contact-free payments.
Customers are embarrassed at the idea of trying to tap and pay at a terminal that isn’t contactless-ready and will likely choose to insert it rather than wave it around.
The payment sector and merchants must shape the future of contactless to ensure mainstream adoption. Failure to do so means it may fade away when COVID does
Payment industry guru Taylor Cole is a passionate payments expert from bestpaymentproviders.com who understands the complex world of high risk merchant accounts insert keyword. He also writes non-fiction, on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice-cream on his backyard porch, as should all right-thinking people.