Pandemic accelerates adoption of contactless payments

The spread of the coronavirus and governments’ subsequent reaction has led to a surge in the adoption in contactless payment methods such as card and mobile payments.

A report released by global data and insights firm Dynata, surveyed over 11,000 consumers in 11 countries found a universal uptick in the adoption of contactless payments.

The UK leads Europe in contactless payment adoption as well over 80 percent of Britons surveyed said that possessed a contactless payment method. In addition, the number of respondents who indicated contactless as their preferred payment method rose nine points from 50 percent pre-coronavirus to 59 percent.

“This is a consumer led change”, says Andrew O’Connell, managing director for Dynata UK.

“Consumers are creating new behaviours in terms of how they’re shopping and interacting with businesses. This is about the new normal that include other areas like online shopping, online learning, telemedicine and entertainment streaming”.

The US saw the largest absolute rise in contactless adoption, with 46 percent of American responding they had a contactless payment method up from 38 percent previously. However, the country is still a laggard in terms of contactless preference, with only 24 percent indicating it as their preferred method of payment.

O’Connell says regions where key infrastructure such as public transport accept contactless payments have the highest level of contactless adoption.

“One of the things we found was when Transport for London introduced contactless payments on the Underground, consumers who used it, were using contactless more elsewhere. Likewise in other areas such as Sydney and Singapore the introduction of contactless within their metro system did the same. We’re finding increasing use of contactless in all areas for those cities.

Prior to the pandemic, there was already an upward trend of adopting contactless payment methods, especially in the use of mobile payments.

“We actually saw a sharp increase in mobile payments that started before coronavirus hit us, somewhere between Q1 and Q2 of 2019 to Q1 2020. The number of enrolled customers quadrupled and the number of transactions increased fivefold”, says Mark Buitenhek, global head of transaction services at ING.

He adds that countries who are more cash-centric like Germany, are skipping over contactless cards and moving directly to mobile payments.

“Germany is a more cash-based culture. There we actually see that our clients have moved not to transitioning towards plastic cards from cash but going straight into mobile payment solutions.”

Overall, on the consumer side, the survey found among all ages groups and income brackets there was a declining preference of cash

“We have seen that across the board, the preference for cash has gone down globally, somewhere from 22% to 15%”, says O’Connell.

However, some groupings were more resistant to change: 11 percent of low income households said they would not adopt contactless payments as opposed to five percent in the high income bracket.

As the pandemic continues to reshape society, the big question remains is if this a permanent shift or a temporary change.

“It remains a question this is more in the realm of behavioural science. If people use something for longer than three months, it can change their habits”, says Buitenhek.

“What we’re seeing right now in countries where measures have been lifted, we don’t see a very fast return to, ‘normal behaviour’. I do think the shift that we’re seeing, which started over a year ago, before coronavirus and was accelerated because of it is here to stay.”

 

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