The future of contactless payments

28 Jul 2020

The impact of the coronavirus pandemic on society and global industries and economies is ongoing – and this can be seen profoundly in the payments sector. 

McKinsey expects global payments to plummet by as much as 8-10% of total revenue as a result of the pandemic – a drop of roughly $165 billion-$210 billion. 

The pandemic has not only battered consumerism, but has also changed our perspective on payments. This has not necessarily been a negative for the payments industry – with Covid-19 propelling the move for a completely cashless society. 

The cashless trend had already gained significant momentum before the outbreak, but the coronavirus pandemic has significantly accelerated the change in payment attitudes. 

Back in February, UK Finance forecast Britain to become virtually cashless within ten years. 

After the outbreak was announced, the World Health Organisation advised the public in March to use contactless payments as much as possible, in order to curb the spread of the virus. 

Since then, retailers worldwide have chosen to refuse cash payments in order to avoid any form of physical contact which could potentially carry the virus. 
China has also taken steps, launching a sovereign digital currency, the eRMB, as it expects to eradicate cash usage.  

Although cashless has been in use for a number of years, it appears the pandemic has finally given citizens a more concrete reason to give up their banknotes. Consumer behaviour has changed – with the desire to abolish cash growing further, even among those that were previously considered skeptics. 

For several consumers, contactless payments are now viewed as the safer option when performing transactions in store. It has swiftly become automatic for shoppers to tap their card at check-out counters, instead of handing out banknotes and coins or punching in a PIN. 

The solution is to make all payments contact-free. Contactless payments are already very near on the horizon, whilst the limit for PIN-free payments has even been lifted all over the world, in order to combat the virus. In the UK, the limit has been pushed to £45, €50 in all EU countries and even up to $250 in Canada. 

As we emerge from a post-pandemic era and look to the future, the consumer trend which has rallied during the outbreak will likely remain, with an increasing number of people opting for contactless and cashless payments.