Covid-19 boosts contactless payments
Global survey: worried consumers are switching to non-contact options
By Mike Jewell
Taiwan has made rapid progress towards the government’s goal of having 90% of the population regularly using mobile phone wallets to make payments by 2025. A new report from Mastercard suggests the coronavirus pandemic will further hasten the switch to contactless transactions, as consumers around the world seek to protect their health with cleaner, touch-free options as much as possible.
According to Visa, 55% of all retail payments in Taiwan in 2019 were contactless via cards, smartphones and wearables, ranking Taiwan fourth in the Asia Pacific region, behind, Australia, New Zealand and Singapore.
The Taiwan government sees making mobile payments ubiquitous as critical in developing a digital economy and is providing strong support to build acceptance of the concept among both consumers and merchants. One-click payments are already available for 114 payment categories and over 10,000 convenience stores, restaurants, supermarkets and other retailers are equipped to handle mobile transactions, with coverage being expanded all the time. The National Development Council estimates that the total value of mobile payments in Taiwan in 2019 exceeded NT$100 billion.
Now, with all the fears surrounding social contact in the Covid-19 environment, a Mastercard survey, completed in mid-April in 19 countries, supported by transaction data, reveals how further impetus has been given globally to the move to contactless purchases.
The act of going shopping for food, toilet paper, medicine and other necessities has changed dramatically this year. Shoppers have had to adjust to new challenges when buying everyday supplies – a shift in behaviour that is particularly clear at checkout as they express a strong preference for non-contact, voicing concerns over cleanliness and safety at the point of sale.
During February and March, as many countries imposed or strengthened social distancing measures, large numbers of consumers turned to contactless card payments for necessary purchases. Citing safety and cleanliness, 79% of people worldwide and a massive 91% in Asia Pacific say they are now using tap-and-go payment methods.
The principal points emerging from the survey:
Contactless cards are moving to the top of the wallet. In Asia Pacific markets, 51% of consumers have swapped their top-of-wallet card for one with contactless capability, based on perceptions of safety and convenience rather than the usual practice of choosing the card with the best reward scheme.
Confidence in contactless. Covid-19 has increased concerns about cash usage and led to positive perceptions about contactless due to the safety and peace of mind it provides. The great majority (82% globally, 80% in Asia Pacific) view contactless as the cleaner way to pay. Furthermore, it is up to 10 times faster than other in-person payment methods, enabling customers to get in and out of stores faster, minimising the time they spend around others and reducing the risk of being infected with the coronavirus.
“Social distancing does not just concern people’s interactions with each other; it includes contact with publicly shared devices like point of sale terminals and checkout counters,” said Blake Rosenthal, EVP and Head of Mastercard Acceptance Solutions. “Contactless offers consumers a safer, cleaner way to pay, speed at checkout, and more control over physical proximity at this critical time.”
Alongside the survey findings, Mastercard transaction data reinforce changing behaviour and consumer checkout preferences, seeing better than 40% growth in the number of contactless transactions globally in Q1 2020.
This is clearly a global trend, because, while countries around the globe are at different stages of contactless card deployment and usage for daily shopping, analysis of trends at grocery stores and pharmacies, where many day-to-day essentials are being purchased, show nearly all regions experienced significant spikes in February and March, with the number of tap-and-go card payments at grocery stores and pharmacies growing twice as fast as non-contactless transactions globally and 2.5 times faster in Asia Pacific.
Looking further ahead, even when the pandemic subsides and consumers are likely less sensitised to immediate health concerns, but back in a more regular frame of mind, it seems highly probable that they will not want to give up the convenience and speed they have experienced with contactless transactions. Indeed, fully 74% of people globally and 75% in Asia Pacific state they will continue to use contactless after the pandemic is over.
Contactless is here to stay.