The future of contactless payments
Until the beginning of 2020, before the unpleasant situation with covid-19, not everyone was interested in which stores accept contactless payments. Today, the request “How to use a smartphone for contactless payments” has become very popular on the Internet.
If not so long ago, these payments even in the U.S. were considered something new and unique, today they are used all over the world. And this use has turned out to be more than successful. Of course, a positive moment for the future of contactless payments was the situation with covid-19, because these payments began to recommend even some medical institutions. The logic is clear: the less we come into contact with items with which covid-19 infected people may have come into contact, the higher our probability of not getting infected.
In this article we’ll take a look at what are contactless payments, what stores accept contactless payments, where contactless payments can be used, and try to predict what awaits them in the very near future.
Contactless payments: what’s in store for them in the nearest future
Contactless payments are easy, convenient and safe. Without touching the payment terminal, you just need to put a payment card, smart watch or smartphone at a certain distance from it – and the payment will be successfully made.
Users liked this technology so much that there is no doubt that fintech companies will continue to invest a lot of money to create new and interesting solutions for contactless payments.
We will allocate 3 possible scenarios of their further development:
Credit cards and cash will be forgotten. All thanks to contactless payments.
If earlier the idea of refusal from cash itself could cause laughter, today at the time when the whole world is against covid-19 not every person wants to touch bills which were in other hands.
Statistics say the following: in the last year alone 48 countries have increased the spending limit for transactions made using contactless technology. While previously pin code entry was required when spending more than $50, now the average amount has been increased by 131%. Prior to the increase, the spending limit for contactless payments in the United States was $100. After the innovation, that amount will increase to $200 or more.
The real victory of contactless payments over cash can be considered the adoption of this innovation to increase the limit of contactless payments in Germany, the country where most of the population traditionally pays for purchases in cash. If the popularization of contactless payments continues at the same pace, in the near future we will really see cash and credit cards being supplanted by contactless payments.
More and more people will pay for their purchases with contactless cards and cell phones.
Most often, to pay for purchases with a pos-terminal you have to swipe your card and enter your pin code. However, in the near future everything may change. Realizing the advantage of contactless payments, customers will increasingly use contactless cards and cell phones to pay. While such transactions are more expensive for companies to process, the level of convenience is also increasing significantly. The advantages clearly outweigh the disadvantages, as it allows companies to increase revenue, speed up transaction processing time, and reduce the number of people in line.
Physical wallets will be a thing of the past. Mobile wallets are the future
In 2019, only 29% of U.S. residents used mobile payments to pay for purchases. This is a paltry figure when compared to China, where more than 81% of the population used mobile wallets.
RTi Research, however, says this could change in the very near future. A survey showed that during covid-19, 30% of U.S. residents first paid for their purchases using contactless methods. It is expected that in 2021 the number of supporters of contactless payments, at least, will not decrease.
Juniper Research has released its own report predicting that the market for contactless payment equipment will triple in size to $1 trillion by 2024.
What can hinder the growth of contactless payments market?
You can admire the convenience, speed and efficiency of contactless payments, but we should not forget that many fintech companies still have serious problems that can stand in the way of significant growth in the popularity of these payments.
Still, contactless payment technology cannot be considered perfectly secure because it can be tracked. In addition, there are fees for this service, which are ultimately paid by customers. We should not forget that approximately 25 percent of U.S. residents still pay for their purchases without using a debit or credit card.
However, these are nothing more than solvable problems. The important thing is to take care beforehand to stay competitive, and to do that, your company should make sure it has maximum access to the most popular payment methods for its customers.
Want to learn more about contactless payments and add some payment methods on your website? Contact PayDo and we will offer you the best conditions of cooperation.