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COVID-19 Boosts Contactless Payment

COVID-19 Boosts Contactless Payment

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The first half of 2020 and the coronavirus worldwide pandemic has forced consumers to use new payments methods, including contactless. 

Apple Pay, Square and a few other tech companies have managed to anticipate that need and have observed a surge in their use in the past six months. 

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Since experts have predicted the end of cash, contactless payment seems to fill a gap in the digital world of banking. Will contactless payment becoming the new normal? Yesterday, the New York Times published an op-ed confirming that a “cash free future is near”. 

Contactless is the new cash

Since coronavirus molecules are transmissible on hard surfaces, it has been encouraged for individuals to limit contact with paper. Thus, payments with cash have not been recommended. 

In the United States, numbers show that 50% of consumers used contactless payments at least four times in May. 

Also, 60% of U.S consumers share their positive feelings about using contactless payments especially during the pandemic, saying it made them “feel more comfortable with the idea of using the method in the future”, adds the investment research Zacks. 

Many companies have felt a positive impact, such as Square, whose stock went from $38 in January to $118 in July. Same thing for Visa, which went from a share price trading at $69 in 2015 to a current share of $197. 

Contactless also increases online

Not only have contactless payments become popular in stores, but they also have increased thanks to a surge of ecommerce. 

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According to eMarketer’s latest report, e-commerce is expected to jump 18% this year to $709.78 billion, representing 14.5% of total U.S. retail sales”, read Yahoo! Finance. 

According to PPRO research “23 percent of U.S. e-commerce payments occur by e-wallet. This figure jumps to 49 percent in China”, confirms Total Retail. 

Read on Alvexo: “Apple’s Nasdaq Success Worry Experts”

Will 5G increase ecommerce opportunities? 

Last but not least,  5G technology will increase opportunities for merchants to sell their products online with a more powerful service technology in northern America and in Europe. 5G is supposed to be three to four times faster than 4G.

To some experts, 5G “will revolutionize contactless payments”, according to Total RetailBy 2021, ecommerce sales is expected to reach $203 billion. 

The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.