03 / 07 / 20

How COVID-19 Will Accelerate Contactless Payment Adoption

For year most transactions have occured with cash being exchanged, or credit cards being swiped. But we wouldn’t be surprised if COVID-19 helps us shift toward more alternative payment solutions. It is no secret that cash is dirty, and consumers are now more interested than ever in minimizing contact.

Contactless payment adoption has been slow- until now

We suspect that U.S. businesses have been slow to adopt contactless payments because consumers have been slow to adopt it. Below are some possible reasons for this:

  1. Habit: American consumers are in the habit of swiping a card for about 20 years now, whether that’s at an ATM for cash or at point of sale.
  2. Cost: Chip enable cards cost significantly more to produce than plastic swipe cards. With an average of almost one billion cards issued annually there’s a massive difference in cost, so the banks were very slow to change. But fraud charges got high enough that a change was necessary, and chip cards became the solution.
  3. Lots of options: Contactless cards will compete with mobile wallets, and it will be up to consumers to decide what they like best. Everyone has a mobile phone and a wallet these days, so will contactless cards win, or will the mobile wallets push out cards as obsolete?

Coronavirus and contactless payments

Mobile and contactless payments are now growing in popularity as governments and consumers try to minimize the interactions between people and common surfaces to combat the spread of the coronavirus. Mastercard recently reported a 40% jump in contactless payments — including tap-to-pay and mobile pay — during Q1 2020 as the coronavirus pandemic worsened. We expect this to continue as we move toward a more sanitary world.

There is no shortage of contactless payment options– there are the common players such as Apple Pay, Google Pay, AliPay, Zelle and Venmo (to name a few), but also up-and-coming options such as blockchain and cryptocurrency. The ease of moving funds faster, easier and more securely has made crypto payments attractive to both consumers and merchants. To learn more about accepting crypto payments for your business, or to set up a Bitcoin merchant account, check out the CryptoBucks app.

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