Evidence is mounting that the sudden veering to more contactless payments could result in a permanent paradigm shift in the retail industry. In a recent MasterCard survey of consumers, 8 in 10 use contactless due to safety and cleanliness concerns, and 3 in 4 plan to continue using it after the pandemic has ended.
Consumers are increasingly using their mobile devices to place orders, make payments, and receive updates as the desire to minimise human contact rises.
And in physical stores, this led to an incentive to be more receptive to brand mobile apps, if this leads to cutting down on contact by moving through the store more quickly. Contactless transactions can reduce the transaction time to as low as 10 to 15 seconds, whereas chip-enabled cards can take as much as 30 to 45 seconds.
To accommodate this behaviour, merchants around the world are now providing contactless terminals or QR codes in-store, exclusively selling online, or doing a combination of the two.
Small businesses join in
It is crucial for businesses of all sizes to reinvent commerce in a way that reduces contact while enabling new digital experiences. Small businesses in the fashion and food industries were the first to offer contact-free curbside pickup for online and mobile orders. As a result, the rise of new local payment methods based on cultural norms is also on the rise. Some regions favour e-wallets, while others prefer bank transfers, credit cards, and Buy Now Pay Later options.
In light of the £45-to-£100 contactless limit increase last October, these transactions are more important than ever before. By raising the spending cap, consumers are able to make higher-value purchases, which is important for increasing small businesses’ bottom lines. And equally important, the flexibility, speed, and reliability provided by contactless transactions demonstrate to customers that small businesses can compete with larger rivals. Investing in contactless card readers will allow small businesses to future-proof themselves as this trend continues.
Unified commerce is here to stay
With Omnichannel being already a must-have, unified commerce is going to be a powerful tool to continue improving the customers’ experience. The goal of this new type of commerce is to connect eCommerce, mobile commerce, CRM, and more to provide insights into how to improve the customer experience. Customers expect the same experience whether in-store or online, so businesses are trying to recreate the in-person experience with the use of video calls and messaging applications where they provide a high level of support.
Payments can be taken by using a link in a text message or directly in the messaging application or by using any other card-not-present method. This is a new stage for payments that offers a comprehensive customer journey, fuelling a new type of relationship between the merchant and the customer.
Contactless is shaping customer behaviour
Within the next decade, contactless payments may grow to become a multi-trillion-dollar industry, and customers’ sentiments seem to concur. But contactless payments are yet to be perfect.
There are specific problems with the contactless checkout that are causing customers frustration: slow machines, unclear instructions, and unreliable payment channels. And the lack of a contactless payment option is proving to be a deterrent for customers, as a recent survey shows that 57% of respondents simply refuse to shop in a store that does not take contactless payments.
Rather than seeing contactless payments as a burden, businesses need to recognise them as a crucial ingredient to improve customer satisfaction.
What does this trend mean for payments overall?
With new shopping behaviours and contactless payment methods, physical stores have a tremendous opportunity to showcase their products and encourage repeat business.
Online, consumers may not be sure how something will look or work once it arrives in their home. And if customers are convinced to buy something else, their visit to the store to pay for a particular order is likely to result in other purchases since they are able to see what else is available.
Closing the gap
In most cases, adapting to change represents the real challenge. More consumers will embrace digital payments as a result of demographic shifts, sustainability impacts, and a post-Covid-19 environment, making the challenge easier to overcome.
Utilising advanced technology, businesses will be able to increase efficiency, visibility, and security by closing the gap between consumer and corporate behaviour.