Government lockdown rules and health organisations’ instructions have created a boom in the use of contactless payments – a new habit that is likely to remain after the coronavirus crisis subsides, says Luc Gueriane, chief commercial officer at Moorwand.
“The pandemic has accelerated the adoption of contactless payments,” he says. “The government endorsements will instil some new habits that will remain post-pandemic as a lot of people enjoy the convenience of it. It has also pushed retailers to acknowledge the economic benefits of investing in contactless terminals.”
The health crisis has accelerated the relatively slow adoption of contactless payments, something which bankers have been “looking to nurture for years.”
A recent Mastercard study found that almost eight in ten consumers now use contactless payments, with contactless payments increasing twice as fast as non-contactless transaction in grocery and drug stories between February and March.
Championing the widespread use of contactless payments, Blake Rosenthal, executive vice president and head of Mastercard Acceptance Solutions says it offers a “safer, cleaner way to pay” with “speed at checkout, and more control over physical proximity,” during the coronavirus lockdown.
The pandemic has also decreased the fear of fraud as consumers opt for more hygiene services, according to Gueriane. The pandemic is yet unlikely to “quash at 100 percent” customers’ concerns when it comes to contactless payments.
Despite skyrocketing contactless transactions during the crisis, cash payments will persist in light of the crisis..
“There will be some fundamental changes in the level of cash, but for different user cases, cash will remain strong. Smaller merchants have resisted for years on taking card payments because they don’t buy into the argument that the cost of cash is there – they feel that cash is free,” he says.
Cash is also the “best way to budget,” for many people struggling to preserve money in their accounts, Gueriane adds. “Clearly, a lot of fintechs are investing in developing clever budgeting tools that allow good visual representation. People are using bank apps and moving away from bank branches – there is clearly a strong cultural shift.”
Maintaining cash within a society is also key to ensuring financial inclusion.
“More and more retailers move away from accepting cash, meaning more consumers will be excluded from being able to spend their money,” he adds.