COVID-19: The Catalyst For Contactless Payment Popularity
Contactless payments have been on the rise for over a decade with total payment volume tripling from 2009 to 2019 in the UK. Paying via a contactless method will on average save a consumer 7 to 15 seconds so it’s not hard to see why it’s proving popular. Even the US contactless market, historically lagging behind Europe in rates of adoption is predicted to surpass $4.6 trillion by 2027.
Throughout the UK there are now more the 106 million contactless cards which can be used to pay at almost 500,000 payment terminals. Up to 40% of retailers who accept contactless now only accept card payments or plan to become completely cash-free in the next five years.
With the advent of COVID-19 cash has lost its lustre. Touching money that may have come into contact with a deadly virus is a no brainer for many, with a corresponding 30% surge in contactless payments according to an RTi Research report during March 2020. The report identified that 29% of that 30% surge are “extremely” or “very worried” about catching COVID-19 from cash and 22% are concerned about exposure to it via card payments. More than one-third of consumers who don’t already have a contactless payment method said they would be “certain, extremely, or very likely” to get one soon.
‘In Europe, for example, the limit for contactless payments has been increased from €30 to €50, opening a whole new category of transactions for this process,’ said Vincent Vinatier, head of Axa Framlington FinTech.
Pandemic fears have also allowed consumers to appreciate the other advantages of contactless payment. Convenience is one, being able to pay via phone eliminates the need to get your wallet out and find the right card, just as contactless cards eliminate the need to make constant cash withdrawals or enter your pin number for each transaction.
‘Once customers have tried contactless payments and see how simple, safe and efficient it is, they are unlikely to revert to cash’ Vince added.
Security is another, with contactless cards such as MIFARE cards having better security protocols than cash, allowing one to contact the bank and cancel it as well as any suspicious transactions. There is also built in protection inside the card that helps to protect the user against any fraudulent activities.
The long term benefits
The clear benefits of going cashless means that the contactless industry can expect to see long term customer retention as a result of the pandemic. A survey conducted by National Retail Federation and Forrester in August 2020 concluded that 20% of consumers made a contactless payment for the first time during the pandemic. Of that 20%, 56% used contactless cards and 62% used mobile wallets. But most importantly, 57% of consumers said they will continue to use contactless payments after the pandemic ends.
With an impressive spike in contactless adoption in barely a year the contactless market is now larger, opening the door to new investment. There will be new opportunities in fintech start-ups from the product design stage, up to management as companies look to expand their product range and services to keep up with market developments.
“Even as the Covid-19 threat continues, demand is expected to sustain into 2021 and beyond” says Mike Champion, Senior Consultant for Headcount.
Whilst the market has grown exponentially, supply of quality candidates has not, making this a great time for a career move in FinTech and payments. Low supply coupled with high demand for talent has created bidding wars in key sectors inflating salaries.
“Naturally then commercial salaries will be some of the highest available” Mike continues. “Experienced candidates should look for significant uplift on their current salary and expect to be courted with generous benefits and lifestyle-friendly working arrangements too.”
If you are looking to take the next step in your career, connect with Headcount, the number one recruiter in payments and fintech. Send us your CV or apply now for one of our live job offers.