The coronavirus pandemic has changed the way businesses have been operating so long. Social distancing to contain the spread of the deadly coronavirus saw people opting for newer modes of transaction. This saw contactless payment methods gain prominence.
Moreover, contactless payment services has not only emerged as the most convenient way to make transactions but also played a key role in saving the retail industry as millions shopped online. And this mode of payment is likely to stay given that the process is hassle free and saves time.
Contactless Payments Gaining Popularity
Contactless payment options have been there for a while now but not too many chose them as a preferred mode of transaction. However, the pandemic changed the entire ballgame and today its importance is being felt like never before. It is convenient, saves time and minimizes personal contact with point of sale devices.
In spite of this newfound popularity, contactless cards still have a long way to go. According to a report by McKinsey & Co.,the payments industry was estimated to decline 22% in 2020 but given a strong performance driven by extensive use of the touch-free payment mode, it now expects a decline of only 7%.
According to data from Visa, Inc. V) there were 175 million contactless payment cards in the United States but the usage was quite low. According to Visa, in March 2020, usage of contactless cards jumped 150% year over year. This was mainly because of the pandemic which drastically changed the buying habits of people.
Touch-Free Payment Is Here to Stay
Contactless payment service providers have been one of the biggest gainers during the pandemic and acted as a great support to the retail sector. This has seen many companies expanding and introducing new services.
In August, Visa invested in the California-based provider of security solutions for contactless payments, MagicCube. The company also recently said that it added 80 million contactless-enabled cards in the United States in the first half of 2020.
PayPal Holdings Inc. PYPL has been another big gainer during the pandemic. The company reported that it added 15.2 million new active accounts in the third quarter of 2020 and registered a 36% jump in total payments volume, which helped its revenues grow 25% year over year.
Other companies like Alphabet, Inc.’s GOOGL Google Pay and Apple, Inc.’s AAPL Apple Pay too have gained popularity due to the pandemic. Google Pay currently has 150 million users across 30 countries, while PayPal has 361 million active users. Apple Pay, which made a slow start, now boasts 383 million users globally, thanks to the pandemic. Square, Inc. SQ added 30 million active users last June, jumping from 24 million in 2019.
Needless to say, contactless payments, which till sometime back wasn’t that popular, has become the most preferred choice for millions thanks to the pandemic that is changing shopping habits.
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