Over the last ten years, the credit card processing industry has seen a pivot towards the “contactless digital payment” option. Apple, Google, Amazon, Chase, and a number of other banks have created the option to simply waive your phone to near a card reader and go. The appeal for most people choosing to use these payment platforms is not having to worry about a piece of plastic or remembering a PIN number.
The majority of consumers who choose to pay with credit or debit cards, however, still rely on an EMV-chipped plastic card to make purchases. Along with privacy concerns about the lack of PIN entry, many people use cards because it is what they are used to. Before the “plastic era” of debit cards, paper checks were the preferred method of payment if cash was not readily available. Credit cards were reserved for large or important purchases. It has been about 20 years since card became king, and it was anticipated that it would take at least that amount of time for consumers to ditch the plastic and move towards digital. That was before COVID-19.
As quickly as COVID-19 changed how Americans interact with each other, it changed how we think about paying for goods and services. During stay-at-home orders, consumers are going online and using various platforms to pay for goods. For those who cannot afford to stay indoors, contactless payments for services are also becoming the “new norm.” Many fast food and chain restaurants continue to accept plastic to accommodate the masses, but are quickly finding ways to accommodate tap-and-go methods. Customers are asking merchants and businesses to adapt and change how they accept payments, and companies are hearing the message loud and clear. Limiting the spread of the virus on both ends while ensuring that supply and demand is still met. The online publication researchandmarkets.com recently published an article finding that, “There has also been increased interest from customers who want to send money to friends and relatives in need, pay neighbors for shared grocery deliveries and avoid having to visit shops in person.” Adapting can be tough, but consumers are determined to find a way around the restrictions of COVID-19.
What does this mean for the future of digital payments? It means that the future is now. Contactless is no longer for just the tech-savvy, it’s an essential option for everyone. Just as cash has always backed plastic, now plastic will be backing digital. This virus has essentially cut the transition time in half, and by the end of it, many Americans will carry cash, plastic, and have at least one-to-two different payment apps on hand.
Tell us what you think about this accelerated shift. Will you be ready for the contactless payment revolution, or have you already made the switch prior to COVID-19 restrictions? Comment and we will feature you on our Facebook.