What’s in this article:
- Contactless payment is a major plus for the health and safety of both the customers and the workers in the store
- Using contactless payment options takes 30- 50% less time than standard credit card payment and is over 60% faster than cash transactions.
- Retailers realize that offering their customers a better experience when making a purchase gives them a competitive advantage that will attract repeat business
Today finding a point-of-sale system that is incapable of accepting contactless payments would be harder than finding one that can. Visa and Mastercard called for card terminals to be capable of contactless transactions as of 2020, and terminals with NFC capability are capable of accepting payments from mobile wallets like Apple Pay and Google Pay, as well.
The technology was already in place for customer use. But while some may have held back, coronavirus concerns made them appreciate the benefits of contactless payments.
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Convenience, safety, and speed
For paying at a store, you just wave your card or device at the POS and don’t need to enter a PIN to have the transaction accepted. Those using a device don’t even need to carry a wallet to pay, and those using wearable or using biometric options don’t need to carry anything at all.
Whether they’re using their cards or devices, they can be freed of carrying loyalty cards because their accounts can automatically include that information.
Contactless transactions typically shave off 12-18 seconds from checkout. That sounds like a tiny amount, but it is somewhere between 30- 50% less time than standard credit card payment and over 60% faster than cash transactions.
When people are anxiously waiting in a line, the cumulative effect of faster checkout can add up to the minutes that make the difference between the customer staying the course or abandoning the carts (something I’ve done myself when I didn’t consider the purchase worth waiting for.)
Contact-free growth in 2020
In most cases, the customer doesn’t even need to sign anything. The primary benefit of cutting out the need for signatures and PINs used to be considered the time saved. But in our post-pandemic age anything that eliminates the need to be in contact with something someone else has touched is considered safer.
A Mastercard Study on contactless payments found that “79 percent of respondents worldwide say they are now using contactless payments, citing safety and cleanliness as key drivers.” Specifically, the Mastercard Study found: “The majority of respondents (82 percent) view contactless as the cleaner way to pay, and contactless payments are up to 10 times faster than other in-person payment methods, enabling customers to get in and out of stores faster.”
That was based just on figures at the end of the first quarter of 2020. By the very end of the year, it became even clearer, as reported in January 2021 in How contactless payments took off in just one year.
Adoption of contactless payment was very much accelerated by COVID. As Shekel CEO, Yedidia Yossef, observed about the 2020 survey on contactless payments – it is a major plus for the “health and safety” of both the customers and the workers in the store.
In fact, it was the increased demand for contactless payments in 2020 that gave rise to the release of Amazon One in September and Visa Tap to Phone in October. But even without the biometric capability to read your palm used by Amazon One, it is possible to eliminate all contact for payments when you use a payment-enabled wearable like a fitness band, ring, or smart watch.
Reports and Data predicts that the global wearable device market will enjoy a 15.3% annual CGR that will bring it to over $1.1 trillion in 2026. No doubt, wearable adoption will contribute to even more contactless checkouts.
But not all safety concerns are related to health. People do want to be sure that their financial information is secure from hacking.
Tap-to-pay technology is considered secure because the chip technology is designed to utilize encryption and dynamic data technologies that gives it protection against most hacking attempts. Also, just as they do for their credit cards, the issuing banks provide fraud protection for is contactless payments.
The advantages for retailers
Retailers realize that offering their customers a better experience when making a purchase gives them a competitive advantage that will attract repeat business. Also, the loyalty-card tracking that can be built into the contactless system offers the retailer very valuable data about each individual’s shopping trip. It paints a more complete picture than a loyalty card that some customers might have skipped swiping for some trips.
Anything that cuts down on frustration and wait times improves the customer experience that will likely translate into more return business Given COVID-19 concerns, certainly, shoppers also see a safety advantage in minimizing their time in stores and minimizing contact with a POS as much as possible.
A 2020 survey found “87% of shoppers say they would prefer to shop in stores with touchless or robust self-checkout options.”
Exceptions to the rule
Wondering about the remaining 13%? I suspect that if it is broken down to self-checkout specifically, the percentage would be far higher. I do still see a lot of people in supermarkets and stores like Target lining up for the human checkout rather than sailing through quickly at the self-checkout.
These may be the same people who line up for bank tellers rather than go straight to the ATM. It is possible that I’m seeing the older customers who find changing their shopping habits too daunting.
A stores’ customers likely include some who like to check out with a human even when it takes longer. So, it would be unwise to seek to phase out all the inefficiencies at once. In the future, though, it is highly likely that there will be no cashiers at all in supermarkets where customers will be paying with their phones, their watches, or their palms instead of cash or credit cards.
The post How the Pandemic Pushed Contactless Payment Adoption appeared first on Post Funnel.
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