Touchless Payments: Ease, Convenience and Safety Drive Accelerated Adoption

PSCU

Denise Stevens, SVP, chief product and digital officer for PSCU, explores how 2021 has transformed payments—specifically, the rise of contactless payments. “Data indicates that demand for contactless is at an all-time high, with nearly half of millennial and Generation Z consumers making contactless cards their top-of-wallet choice,” she says. “What might have at first seemed like a trend has now become routine for many credit union members.” Read more of Stevens’ insights, along with those of 32 other executives, in “The Way Payments Are Now Done.”

The COVID-19 pandemic has been an impetus for change, forcing consumers to alter their behaviors in many aspects of their lives. Some innovations that were considered “nice to have” prior to the pandemic have risen to the level of basic requirements in the eyes of consumers, who now expect safer and more convenient choices in how they transact. One such capability is contactless payments, which have increasingly become part of consumers’ daily payments routines over the past year.

With consumers transacting digitally more than ever, they expect these payments to be swift and seamless. As hygiene became an important factor in the pandemic era, consumers quickly discovered the convenience of touchless forms of payments. With more and more merchants enabling near-field communication (NFC) technology, widespread adoption of tap-and-go payment methods has given consumers the ability to choose how they pay.

In the Credit Union Innovation Playbook, a PYMNTS and PSCU collaboration, research has shown that contactless credit and debit cards are the most popular payment options with credit union members, followed by mobile wallets. Nearly twice as many credit unions indicated that they are investing in contactless cards than were doing so in 2020.

According to PSCU’s monthly Payments Index, contactless transactions leveraging debit and credit cards have more than doubled since January 2020 among the same-store population of credit unions. Mobile wallets have also experienced exponential year-over-year growth and, in recent months, have benefited from the increased volume of card-present activity – further illustrating that options like contactless cards and mobile wallets are now necessities.

Looking at demographic data, millennials and Generation Zers are part of the next wave of credit union members who will impact preferences and expectations. These younger generations are digital natives who grew up during a time of rapid technological advancement. They represent a mobile-savvy generation open to embracing new technologies, including an assortment of touchless payment options. Data indicates that demand for contactless is at an all-time high, with nearly half of millennial and Generation Z consumers making contactless cards their “top-of-wallet” choice. What might have at first seemed like a trend has now become routine for many credit union members.