An increasing number of people are shifting to contactless payment thanks to the coronavirus pandemic that has changed the way transactions have been done so far. Social distancing to avoid fears of contracting the virus has seen people giving up cash transactions for contactless payment services.
With more than a year into the pandemic, the share of cashless business has more than doubled in many countries, according to a new report from Square, Inc. SQ. Contactless payment has become one of the most convenient ways to transact and is likely to gain further prominence and acceptability in the future given that the virus scare is far from over.
More Businesses Going for Contactless Payments
According to a report from Square, COVID-19 resulted in the share of cashless businesses to more than double in many countries including the United States. The company defined cashless businesses as those where more than 95% payments are done through cashless options.
The report says that in 2020, before the pandemic hit, a meager 6.3% of the Square sellers were doing cashless transactions. However, it increased to 14% as of February 2021. At the same time, the share of cash transactions declined to 30.5% in February 2021 from 37.4% a year ago.
Given that businesses are fast adapting to cashless transactions, customers too are opting for the same. According to a new report by Juniper Research, published in which-50.com, 60% of consumers have shifted to touch-free payment services because of fears of COVID-19.
Following the coronavirus outbreak, 89% of the cashless payment users in the United States have started using contactless cards. Among those who are yet not using contactless payments, 35% plan to start soon.
Contactless Payment Here to Stay
The United States was slow in accepting contactless payment as a mode of transaction although they have been in existence for a quite long time. Things started changing following the COVID-19 outbreak. Till some time back, the United States was a laggard in terms of contactless payments, with only 24% using it, according to a report by global data and insights firm Dynata. That may, however, change fast as businesses are rapidly adopting contactless transactions keeping safety in mind.
The surge in users of contactless cards and other touch-free options have been working miracles for companies offering these services. According to a report by Globe Newswire, the global contactless payments market was which was valued at $11.2 billion in 2019 is projected to reach $26.3 billion by the end of 2027. The growth is going to be driven bydemand for biometric contactless smart cards.
Moreover, coronavirus fears are far from over and people who have now got accustomed to this mode of payment will continue to stick to it.
Stocks to Watch
Apple, Inc.’s AAPL Apple Pay is a mobile contact payment system and digital wallet service that Apple Inc. introduced in 2014. The service allows users to pay for products and services using near field communication at the point of sale, whether in person, via iOS apps or the Internet.
The company’s expected earnings growth rate for the current year is 36.6%. The Zacks Consensus Estimate for current-year earnings has improved 10.6% over the past 60 days. The company has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alphabet, Inc.GOOGL, apart from other products and services, also offers Google Pay, a digital wallet platform and online payment system developed to power in-app and tap-to-pay purchases on mobile devices, enabling users to make payments with Android phones, tablets or watches.
The company’s expected earnings growth rate for the current year is 18%. The Zacks Consensus Estimate for current-year earnings has improved 10.2% over the past 60 days. Alphabet carries a Zacks Rank #3.
Visa, Inc. V operates retail electronic payments network worldwide. The company provides transaction processing services (primarily authorization, clearing and settlement) to financial institutions and merchant clients through VisaNet, its global processing platform.
The company’s expected earnings growth rate for the current year is 8.9%. The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the past 60 days. Visa carries a Zacks Rank #3.
Square, Inc. offers financial and marketing services through its comprehensive commerce ecosystem that helps sellers to start, run and grow their businesses.
The company’s expected earnings growth rate for the current year is 39.3%. The Zacks Consensus Estimate for current-year earnings has improved 8.33% over the past 60 days. Square carries a Zacks Rank #3.
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