What is Contact Less Payment?
Customers can pay with Contactless Payment without needing cash or a card swipe. To use this method, users must “Tap” or “Wave” their card over a card reader. The terminal will then establish a connection with the bank account, which will immediately result in the payment. The market database suggests that payments made with near-field communication (NFC) technology are referred to as contactless payments. Devices near one another can effortlessly connect and share data via contactless payment NFC. There are many different types of contactless payments, such as contactless cards and digital wallets. Credit and debit cards, key fobs, smart cards, and other items, such as smartphones and other mobile devices that use radio-frequency identification or NFC fall under this category.
The Change in trends across the no-touch payment market
According to the market database, the advent of the pandemic was noted to have sharpened the existing trends within the market for contactless payment. This was predominantly due to the norms instated by national and state governments to ensure a minimum spread of the pandemic. The instating of non-contact periods and lockdowns across the global markets caused a surge in payments across digital platforms. Market analysis suggests that as customers and companies explored solutions to reduce handling cash and touching shared surfaces like PIN pads in 2020, the use of contactless payments increased. Between March 2019 and June 2020, contactless payment usage increased 150% in the United States alone.
The increased use of online shopping and similar platforms led to a boost in the use of contactless payment NFC as well. The number of shoppers that visited virtual stores surged owing to the lockdowns imposed across the global markets. Banks imposed restrictions on the monetary amount of transactions done with contactless payment systems because they were initially utilized mostly for modest purchases. Many banks upped their contactless transaction limitations in 2020 due to the rise in contactless payment usage.
The market analysis states that the increased use of contactless payment methods is noted to be one trend which remains prevalent within the global markets since the pandemic. It is seen that the number of small businesses and restaurants post the gradual re-opening of the global markets are still making use of QR code-based transactional methods to conduct monetary transactions. The ease of payments conducting payments is seen to increase substantially owing to the use of contactless payment methods.
Another factor that is poised to drive the growth associated with the contactless payments markets is a surge in the usage of subscription-based payments/ recurring payments. The increase of entertainment outlets like Amazon prime, Netflix, etc is poised to drive the growth associated with this sector. With a card-on-file transaction, a company saves a returning customer’s payment information and charges subsequent purchases to that method. Recurring payments happen when a company routinely charges a customer’s saved payment option, such as once per month. With subscription-based businesses like wine club memberships, entertainment channels, and virtual stores for routine consumer products, this technique is frequently employed.
Business intelligence tools suggest that the increased proliferation of no-touch payment also suggested a rise in cybercrime activities between 2020 and 2022. Business intelligence tools state that this was predominantly due to the aftermath of the pandemic, which led to a global loss in employment opportunities. The number of people that were a victim of cyber spoof and associated activities were hereby seen to increase during the pandemic which can be a key market restraint. The growth in such activities has led to a subsequent increase in investments within the cyber security domain.
Future trends within the contactless payments market
The global markets are poised to observe the emergence of new contactless payment methods, such as payments made using biometric verification like iris scans or voice recognition, in addition to greater use of contactless cards, mobile wallets, and QR codes. VISA forecasted that by the end of 2020, 300 million contactless cards would be issued in the US, up from the anticipated 100 million by the end of 2019. There are currently over 58 million contactless-enabled cards and over 147,000 terminals in operation in the UK alone. Additionally, the market database indicates that in nations like the UK, card purchases now outnumber cash purchases and makeup about one-third of all card transactions.
Moreover, the “scan-pay-go” technology, which has already been used by several food stores in the United Kingdom, could see further development. All things available for purchase are identified using this system by a barcode or QR code. In this method, the customer is noted to use their smartphone to scan the code and make the transaction, thus skipping the checkout line entirely.