How the pandemic has forever changed payments
Since the coronavirus began its spread through the US in March, experts and government officials have been constantly developing and updating guidelines to deter the spread of the virus, requiring Americans to drastically change their everyday behavior. Quickly, consumers heeded the risks associated with touching cash and surfaces such as payment terminals, and a very strong trend emerged at the checkout counter: consumers want to tap to pay, now more than ever.
While this recent surge in contactless payment is unprecedented, adoption had slowly been trending upward for some time. Contactless cards have been around for most of the 21st century. 2019 was a pivotal year, as merchant acceptance exceeded 63% with a significant boost coming from contactless card acceptance in public transit systems in NYC, Chicago, and New Jersey. In the meantime, some of the largest issuers were committing to issue contactless cards in the coming years. However, adoption of contactless had been lagging in the US at less than 5% transactions, compared to markets like the UK where 42% of debit volume was contactless as of 2019. Also, unlike other markets, contactless transactions in the US were led by mobile wallets, not the cards.
A few key findings to note as the payments world continues to rapidly change:
- Contactless volume continues to increase: As of July 2020, we observe a 259% year over year increase in contactless volume; looking at monthly figures we expect the growth trend to continue.
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