By: Jackie Lorch
Vice President, Global Knowledge Management
As economic and social restrictions are lifted, the Coronavirus pandemic’s influence on consumer behavior includes not only where we shop and what we buy, but how we pay. Our report, Global Consumer Trends COVID-19 Edition: The New Normal, explores these changes, including the acceleration of contactless payment methods around the world.
Our latest mini-report, A Breakthrough for Contactless Payments, examines this rising adoption rate and the changes it could bring to both the consumer and merchant experience. We’re shifting from ”traditional” payment methods, such as cash or chip and/or PIN bank cards, and towards contactless methods via cards or apps.
Seven out of ten people we surveyed said they had a contactless method before the pandemic; those in China (90%), Singapore (85%) and the UK (81%) were more likely to say they had access to contactless than consumers in all other countries studied. There are social and economic factors at play in those countries. The UK, for example, uses contactless – including cards/apps from major issuers as well as pre-paid Oyster cards – in its transit system following a “pay-as-you-go” format with daily or weekly spending caps. The US, on the other hand, lags behind all other markets in contactless ownership and usage; less than four in ten American consumers said they owned a contactless card or app (compared to a high of 90% of those in China).
Today, however, every country, generational cohort and income level we surveyed demonstrated growth in owning a contactless payment option (card or app). This is understandable, given the current social-distancing restrictions on person-to-person contact. In the US, ownership is up 19%, the steepest rise of any country, but from the lowest base. Globally, more than one-third of consumers who don’t already have a contactless payment method said they would be “certain, extremely, or very likely” to get one soon.
Access and ownership levels indicate availability, but preference is perhaps the biggest indicator of the staying power of contactless payments. Every country we surveyed – 11 in all – saw a rise in consumer preference for contactless payments, helping move the global meter from 52% preferring contactless to 59%. Double-digit percentage point jumps were observed in Germany, the Netherlands and the UK, while the USA saw a nine-point jump. At the same time, the preference for cash dropped 31% (22% pre-pandemic to 15% today).
During a pandemic, contactless payment transactions are obviously convenient and social-distancing-appropriate, but there are also longer-term convenience aspects which make them more attractive. And, since it won’t require fumbling in our pockets or wallets for a card or cash, contactless is becoming the preferred payment method in high-traffic areas for transactions large or small. Given the convenience factor, the preference for contactless is likely to outlast the pandemic, and businesses will need to adapt to support this consumer preference, including removing minimum-purchase barriers where they exist.
For more on the growth of contactless payment methods during the pandemic and our changing behaviors in the New Normal, visit our COVID-19 Insights page and download the report.