In the wake of the World Health Organization (WHO) declaration that the COVID-19 outbreak was a pandemic, U.S. consumer reaction transitioned daily activities from the physical world toward a digital existence. Turning to solutions minimizing human touch, retail merchants quickly switched to touchless payments, and no matter the outcome of the pandemic, the post-pandemic market will certainly remain digital.
Pushing contactless payments into the mainstream, COVID-19 was the catalyst to carry retailers past previous barriers toward widespread adoption. In attempts to reduce the risk for in-store customers, essential businesses increased sanitization regimens, limited the number of customers in the store, marked the floors for social distancing, and eventually introduced contactless payments – although not all merchants are there yet.
Overcoming Barriers of the Past, Touchless Payments on the Rise
Both legacy point-of-sale systems and learning curves for customers and businesses alike served as barriers accounting for the slow rate of adopting contactless payments. For customers who are looking for a quick method to get in and out of the store without exchanging cash, touching a terminal, or touching anything besides their own phone, contactless payments are the solution.
While the increased curbside pickups eliminate the need for payment exchanges, contactless payments can offer the alternative to customers who want to shop in the store but still not touch anything. According to a survey by Paysafe, a payments provider, 63 percent of Americans say they are using contactless payments more than they ever have in the past. 44 percent even find mobile wallets like Apple Pay or Google Pay are more secure than bank-issued contactless cards.
As video gaming, streaming, and e-tail are noticing an upswing in cashless transactions, according to Daniel Kornitzer, Paysafe’s chief business development officer, other merchants that rely more on in-person transactions, such as restaurants and hair salons haven’t experienced the same increase in digital payments yet. Restaurants like Burger King and Chick-Fil-A implemented contactless payments via apps.
Avoiding Cash & Point-of-Sale Terminals
Once criticized for discrimination against customers without bank accounts, fast casual restaurants like Sweetgreen and Cava quickly dropped their attempt to become cash-free restaurants. Now, consumers are avoiding cash with fears that the coronavirus can live on bills and coins. Avoiding the potential of transmitting germs at the point-of-sale systems is the driving force behind the 51 percent of U.S. consumers who said they were using some kind of contactless payment, according to a Mastercard survey.
Particularly expensive for smaller businesses, adopting new payment options such as contactless payments is cost prohibitive because they don’t enjoy the same rates as larger companies with higher volumes of transactions. It is to be determined whether government regulation or consumer demand makes touchless payments ubiquitous across merchant industries.
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