The world is going through an unprecedented time due to the spread of Covid-19. There is no facet of human life untouched from the impact of this pandemic. A large part of population is working, studying, and shopping from home in order to stay safe and keep wheel of life running. At the same time, we are also trying to prepare ourselves for a new normal in the post Covid-19 world.
One of the new normal during and post Covid-19 world is the way people buy their day to day requirements. The need for social distancing has brought contactless payments at the forefront of our shopping experience. This shift in consumer behavior is clearly visible at the checkout counters.
Mastercard global transaction data and consumer research suggests a significant acceleration in the use of contactless payments. The poll conducted across 19 countries indicates that in March 2020, as many countries imposed necessary restrictions on social distancing, groceries and pharmacies remained open, and the number of contactless card payments at these locations, as a proportion of all face-to-face card payments, grew by 25 percent compared to the previous year. Citing safety and cleanliness, 79 percent of people worldwide and 91 percent in Asia Pacific say they are now using tap-and-go payments. The data reinforces how people look for alternatives in store, seeking to avoid handling cash, pens, and keypads in favor of a safe and quick tap to check out.
The trend is no different in India where we have more than more than 2 million merchant point of sale (PoS) locations across the country. We have also seen a significant growth in adoption of contactless payments since 2018 with contactless transactions growing at a rate of 15 X over the last 12 months. Endorsing the importance of contactless transactions, Reserve Bank of India has also allowed tap-and-go functionality on card payments for all purchases, even above Rs 2000 with a Pin, at retail stores and shopping centers.
This rise of contactless payments can be attributed to the common understanding that social distancing needs to go beyond interpersonal connects to include contact with publicly shared devices like point of sale terminals and checkout counters. Contactless cards offer consumers a safer, cleaner way to pay, reduce long queues at checkout counters, and more control over physical proximity during such tough times. Therefore, consumers and merchants alike, have the much-needed peace-of-mind. During the lockdown period, people also had the opportunity to experience the convenience of contactless cards. This is a game-changing moment as more people will be inclined to use contactless cards, even when Covid-19 becomes a page in the history books.
Technology innovations also promise mass adoption of contactless payments in the future. This will be possible as near field communication (NFC) enabled smartphones can be used for Tap & Pay payments both on the consumer and merchant side. In other words, almost everyone with an affordable smartphone will be able to start accepting and making payments, without the need to own any other PoS infrastructure.
It is clear that the change that we are witnessing in consumer behavior is here to stay. As always, the future has promise of something better, something life changing.
