How coronavirus will change payments
In May 2019, New York’s Metropolitan Transit Authority made the milestone announcement that it was rolling out a contactless payment system. It was seen as a major innovation, the first update to its payment system—which, until then, had relied entirely on flimsy MetroCards. For other major metropolises, moving to contactless was old news. London’s Underground system adopted contactless payments systemwide in 2014. And while London’s system, which allows riders to tap on with their credit card or digital wallet alone, other cities have embraced contactless in other ways: Paris has incorporated a contactless system with its Navigo card, and in Tokyo, there’s an app that allows for on-phone payment for the subway.
When it comes to payment technologies, the United States has often lagged behind much of the world, particularly as the technology pertains to credit cards—and not just on public transportation. Nearly 60% of all face-to-face Visa transactions made in countries other than the U.S. are contactless, and the overall number of these payments grew 40% from 2019 to 2020. In a global consumer survey from Mastercard, eight in 10 respondents said they use contactless payments. In the U.S. Between March 2019 and March 2020, contactless payments grew by 150% and nine of the top 10 American credit card issuers are introducing contactless cards. But the U.S. is behind many countries in Europe and Asia, as well as Australia, where contactless has become the default method of payment for many consumers.
Coronavirus may be the catalyst
Contactless adoption has been slower in the U.S. in part due to the fact that there wasn’t a pressing need. Yes, it’s faster, and yes, it’s more convenient than using a chip-enabled credit card, but it’s not as if that experience is so poor that consumers are desperate for another option, particularly when they are so loyal to their credit cards.
Coronavirus has created a reason—a vital one. What’s remarkable about contactless payment is that it’s a ready-made solution to a problem arising years after the debut of the technology. (Apple first introduced it in China in late 2015 and began a stateside rollout in 2016.) Human contact has perhaps never been as charged as it is now, and people are looking for ways to avoid it.
That’s the case in stores, where contactless payment takes less time than inserting a chip card into a reader—according to Mastercard, it’s 10 times faster than other in-person payment methods. It’s also the case on mobile, a growing segment in the eCommerce universe. In particular, payment methods like Apple Pay and Google Pay make for a more frictionless mobile payment experience, which will only become more appealing to consumers as mobile shopping becomes more popular. There are also security benefits. When paying with a digital wallet, consumers can complete transactions without ever taking out a physical credit card—they can even leave their wallets at home. That means hackers will never see the magnetic stripe that is so easy to clone.
Consumers have already started to see the benefits. Seventy-four percent of respondents in Mastercard’s survey said they’ll continue to use contactless payments after the pandemic is over. Right now, in the world of Covid-19, everybody is very sensitive to touching things, So, from a consumer adoption perspective, people start to explore this. People who may have previously been wary of trying contactless or those who had tried it and didn’t love the experience may be more easily convinced to start using it now.
Kreston Romania decided to adopt new technology and change paper-based meal tickets (Meal tickets are used for the payment of food and products at the shops and affiliated restaurants) into contactless meal card. The Up Dejun meal card is the modern and simplified version of the meal voucher, a fast and secure payment method developed under the Mastercard license in order to keep up with new buying trends.
Source: Adweek
