Contactless payments include using a card or mobile phone to make a purchase. The customer doesn't have to insert a card for the transaction to complete. Instead, they just tap the card. When using a mobile phone, the payment goes through a debit or credit card that the customer has selected as their contactless payment option. Contactless payments are another form of cashless payments.
Contactless payments continue to grow as more retailers accept them and customers adopt the technology. The main driving factor behind the adoption of contactless payments is convenience and security. Rather than pulling out a wallet and digging for a credit card, customers can just tap their phone to a card reader. Where that option is unavailable, a simple card tap will do the trick.
This convenience aspect boosted the acceptance of contactless payments during the Covid pandemic, as many customers preferred contactless payments for their cleanliness.
Improved security is also available since each contactless payment credit card has a secure chip that processes transactions. Mobile devices that use contactless payments are also extremely secure.
Let's look at several trends occurring in the contactless payment market.
A study by Cantaloupe, a digital payments and software services company, recently found that contactless payments increased from 51% in January 2020 to 62% in October 2021. By comparison, cash transactions decreased from 49% to 38% during the same period.
Another study by Cantaloupe on EMV (Europay, Mastercard, and Visa) digital payments showed an increase from 1 million transactions to 3 million from January to November 2021.
Specific to the US, Raydiant’s State of Contactless Payments 2021 Report found that 80% of US consumers had used contactless payments. The US also has the largest number of contactless payment cards of any market in the world.
Retailers are aware of the consumer's desire to use contactless payments. In 2021, two-thirds of retailers offered contactless payment options. Of that group, 58% were contactless cards, and 56% were digital wallet payments on mobile phones.
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