Thursday, April 30, 2020
This is in line with results of a survey in late March by the ETA and The Strawhecker Group. Twenty-seven percent of respondent U.S. businesses that were still accepting in-person payments said they had seen increases in contactless payments, the survey showed.
Contactless payments employ near field communications technology and are initiated using an NFC-compatible EMV card or a mobile payment app, like Apple Pay. But mobile contactless payments have been slower to take off in the United States than contactless card payments. In 2019, Auriemma Research reported that only about one third (34 percent) of consumers with access to mobile payment apps use those apps, compared with 59 percent of cardholders who have used their contactless cards to make payments.
At the onset of the COVID-19 pandemic when consumers increasingly sought ways to quickly get in and out of stores without touching terminals and other devices, these numbers were poised for growth. Mastercard's data revealed a 40 percent increase in contactless payments during the first quarter of 2020 compared to the same period in 2019. Eighty percent of contactless payments were for amounts under $25, a payment range typically dominated by cash, Mastercard said.
"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, executive vice president and head of Mastercard acceptance solutions. "Contactless offers consumers a safe, cleaner way to pay, speed at the checkout, and more control over physical proximity at this critical time."
Both Mastercard and Visa recently increased tap-and-go payment limits from $100 to $150, in response to the pandemic, pending government approvals. NFC World reported that governments in 40 countries raised limits on contactless payments. There are no set value limits on contactless payments in the United States, although some merchants do require signatures for high-dollar transactions.
In two of the countries that raised limits, the UK and Ireland, Barclaycard reported it processed over 7 million contactless payments in April. Mastercard stated that while individual countries are at different stages of contactless deployment and adoption, its data points to strong increases worldwide, particularly at the checkouts of grocery stores and pharmacies. Contactless payments at those locations grew twice as fast as non-contactless payments, Mastercard added.
Mastercard's survey of consumers found 46 percent had made contactless cards their preferred payment method. Additionally, 82 percent said they considered contactless cards the cleaner way to pay, and 74 percent said they will continue to use contactless cards even after the COVID-19 pandemic subsides.
In the call with analysts, Banga said of increased consumer adoption of contactless payments, "[W]e think this trend will continue after the pandemic."
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