Since the beginning of the Covid-19 pandemic, consumer habits have changed. In recent weeks, due to lockdown measures, there has been a decline in the circulation of cash withdrawn from Automated Teller Machines (ATMs), as well as an increase in e-commerce, through online purchases.
Having changed their buying habits for food and essential goods during the lockdown period, and with the opening of shops and restaurants signalling a gradual return to normality, people are now avoiding cash payments. They are making greater use of credit cards and payment applications on their mobile phones, thus minimising the risk of contact. If the technology of the payment device allows it, this also avoids the use of data where contact is required when entering the PIN.
The Futurist Group, a product innovation consultancy and information services firm, published an analysis in March that compares consumers’ feelings (as of March 3rd, 2020) with the importance of contactless prior to the spread of the virus. The company indicated that 38% of consumers assessing a credit card offer with a contactless feature said that this is a Table Stake need, a 26.6% increase compared to the previous period.
Whilst contactless payment options are constantly growing, biometric cards are among the safest trends. In fact, the World Economic Forum is pushing for a password-less future, and the Financial Action Task Force is encouraging digital onboarding in what looks like a joint push for more biometric authentication.
Faced with this new reality, fingerprint verification can be used as an alternative cardholder verification method (CVM), instead of PIN or signature, as the card verifies your fingerprint on the sensor in under a second, thus eliminating the need to handle the payment terminal.
This same solution offers digitised cards in a mobile wallet. Although the customer still has to use a payment device to interact with payment terminals, the customer's authentication is done on the same mobile phone (in most cases using biometrics such as fingerprints); there is no need to even enter the PIN above the established limit.
Preventing the spread of the virus
In addition, the adoption of contactless payment can also be promoted through wearables (watch, bracelet, etc.). These have been associated, in the past, with specific consumer populations such as young people, athletes, women and children, or with events where cash payment was not accepted, such as festivals, stadiums and amusement parks.
Wearables benefit by being directly accessible; they do not have to be removed from a pocket or a jacket, which makes them easier to use in these times when wearing gloves is mandatory in stores and business in some countries.
In March, as the Covid-19 pandemic spread across Europe, the European Banking Authority (EBA) said it “encourages consumers and merchants to take necessary sanitary precautions when providing, or making use of, point-of-sales terminals to pay for goods in-store that require a PIN, including by considering all payment methods available, such as contactless or remote payments”. The EBA also encouraged payment firms to increase contactless payment limits, where possible, to 50 euros per transaction.
Contactless payment technology helps prevent the spread of the virus, while also complying with the security that different payment options must have in order to guarantee customer transactions. The time has come for businesses to offer a greater variety of cards and devices to facilitate the contactless payment that best suits customer needs.
The analyst house Juniper Research forecasts that annual global contactless transactions will reach nearly $6 trillion (5.5 trillion euros) in 2024, up from $2 trillion in 2020.