There is no denying that the COVID-19 pandemic has rapidly accelerated the global shift toward digital commerce. Safety-minded consumers the world over can now be seen tapping contactless cards, scanning QR codes or utilizing voice ordering technologies to make purchases without potentially putting themselves or others at risk of contracting the virus.
The technological seeds that have made these developments possible were planted more than a decade ago, with the steady growth of digital payment platforms and cloud-based technologies that support electronic payments. Many consumers are still using their credit and debit cards to underpin these digital transactions, but the methods they use are evolving rapidly. Ninety-six percent of them expect to use their card details to power emerging digital payment methods like digital wallets or even augmented reality payment apps, for example.
Consumers’ desire to go contactless or cardless during the pandemic presents plenty of opportunities for FinTechs, banks and other card issuers to bring innovative credit solutions to market, but such investments much be approached strategically. Financial institutions (FIs) that rush headlong into the latest technologies without an in-depth understanding of the technical and regulatory complexities they entail risk dumping funding into solutions that fall flat.
The Beyond The Card: Toward The Cardless And Contactless Future report, a PYMNTS and i2c Inc. collaboration, examines the complex and emerging field of contactless payments and the consumer trends that are pushing the development of new digital solutions. It also highlights case studies that reveal how some companies and FIs are tailoring their contactless offerings to realize their potential to the fullest.
The pandemic has in no small way transformed the contactless payments space. Research reveals that more than three-quarters of United States consumers are now aware of such payments, representing a 25 percent year-over-year increase. With this knowledge comes an increase in the share of consumers willing to use such payment methods, especially in certain scenarios. Eighty-three percent say they would use such payments at grocery stores, for example, while 81 percent say they would use them at drug stores.
Health and safety are undoubtedly the primary drivers of contactless payments, as consumers look to avoid physical interactions when shopping or picking up purchases. Eighty-two percent of contactless users view the technology as cleaner than other options. Speed also factors into their considerations, as spending less time waiting in line means they spend less time potentially exposed to COVID-19.
Financial services providers and companies are understandably eager to meet consumers’ voracious appetites for contactless payments, but their approaches vary depending on a host of factors. FinTech Zero, for example, enables customers signing up for its flagship credit card product and use their cards immediately, providing them virtual options off the bat and sending them physical cards only if they are requested. Purewrist, meanwhile, leverages waterproof and washable bracelets that contain NFC-enabled mini-cards that can be linked to users’ debit or credit cards and tapped at any NFC terminal — meaning consumers do not even have to take out their phones to access digital wallets.
These are just a few of the numerous insights we examine in Beyond The Card: Toward The Cardless And Contactless Future. To learn more, download the report.