A contactless card case
In the wake of the COVID-19 pandemic, we are all reconsidering our ways. Within weeks in the spring of 2020, new realities reshaped the way we think. We have become acutely aware of viruses and the role contact plays in their spread. As a result, demand for technologies that eliminate contact and alleviate consumer and merchant fears has exploded.
In March 2020, around 38% of consumers said they had seen contactless as a basic need or feature of payments – up from 30% pre-pandemic. It is too early to understand the long-term effects of social distancing, stay-at-home orders and a closed economy on consumer lifestyles and behavior.
But it’s clear that the pandemic-related surge in contactless payments won’t reverse once pandemic-related fears die down. One compelling reason is that, according to industry research, approximately 65% of merchant sites in the United States accept without contact Payments. Contactless payment capability can improve the customer experience. In addition to eliminating the risk of contagion through contact with cash, payment terminals and other surfaces, it can be faster, easier and more convenient.
To drive adoption, the payments industry needed consumers to try contactless payments once, knowing the benefits would speak for themselves. The pandemic sparked this trial, and now consumers are increasingly embracing this payment experience.
Contactless technology has fully emerged
Although still considered an emerging technology by some, up to 80% of consumers worldwide use contactless credit and debit cards, and for about half of that number, tap-and-go cards occupy their top-of-the-line position.
Consumers want it, merchants support it, and issuers can no longer afford the luxury of time. Keeping your card at the top of the wallet with cardholders means staying ahead of a flattening curve. The good news is that following the EMV liability change in the United States in 2015, you’re probably already issuing smart cards, which means you’re halfway to providing customers with the security and convenience of the dual interface.
Dual-interface cards offer consumers a choice of payment technologies: contact (EMV chips) and contactless (tap-and-go antennas). The flexibility of payment options is one of the many reasons why dual interface cards are widely seen as the default card payment technology in the future. Here are some other benefits of dual interface cards:
Security: Dual interface contactless technology offers the same protection as a contact-only EMV card, making these cards more secure than a magnetic stripe card or cash.
Speed: Contactless transactions take an average of 15 seconds or less. We live in a fast-paced world, so time is precious. In order to keep up, you need to offer your customers fast payment options.
Simplicity: Ease of use could be a big driver for adoption, especially for transactions under $25, most of which are currently done in cash.
Control: Contactless payments allow a cardholder to complete a transaction while maintaining possession of their card and without touching the point-of-sale device.
Consumer demand for contactless payments is growing. Historically, technology has been a key driver of human behavior. This time it’s the other way around.
Nicole Machado is the Executive Director of Product Strategy for Vericast Card Solutions.
As you fine-tune your financial institution’s strategy, gain insight into emerging industry trends in our Executive Report, “A Look at Banking in 2022.”