If you’ve ever left the house without your wallet or purse, there’s a good chance you still had your mobile phone with you. Of course, you didn’t discover the problem until you arrived at the coffee shop or grocery store, reached for your credit card, and discovered that you had forgotten it.
A few years ago, that would have meant leaving your purchase and angry-driving back home to get your wallet, or just going without your favorite latte or groceries for dinner that night. But lately, you’ve been able to pay for your purchases at most EMV-compliant point-of-sale units just by tapping your mobile phone to the card reader. Problem solved. Your purchase was made, and you start to wonder if it would be possible to never carry your wallet again.
The pandemic has made a lot of changes to the way we shop and the way we buy things. One of the most notable changes is the number of merchants in the U.S. that now accept contactless payments has risen dramatically even from last year, and you can pay for more things with your mobile phone even if you still have your wallet with you.
Last year, Forbes believed we would see an increase in contactless spending, especially as card issuance costs fell, merchant acceptance was broadening, and Americans’ continued love of using credit cards over mobile wallets. Of course, they couldn’t have predicted what actually did happen, but at least they were on the right track.
According to the National Retail Federation’s “State of Retail Payments” study, the percentage of US merchants that accept contactless payments is 58 percent, up from 40 percent last year. Further, the number of retailers that accept digital wallets has risen to 56 percent from 44 percent.
The pandemic has made online buyers out of a lot of people out of necessity, with 19 percent reporting that they made an in-store digital payment for the first time. Of that number, 62 percent used their mobile phone and 56 percent used a contactless card.
There were similar numbers outside the U.S. as well. This past April — which was about five years ago, it seems — Visa reported that nearly 60 percent of all Visa transactions outside the country were paid with a tap, either with a credit card or a mobile device.
This is not only safer, says Visa, but it’s also a lot more secure because “contactless transactions are secured with dynamic EMV® Chip security technology that has already proven to drastically reduce counterfeit fraud.”
In the United States itself, they found a drastic increase in contactless payments at essential merchants, such as grocery stores, pharmacies, doctor offices, local dentist offices, and banks: the use of “tap to pay” methods has grown more than 100 percent over last year.
31 million Americans tapped a Visa contactless card or digital wallet in March 2020, up from 25 million in November, with overall contactless usage in the U.S. growing 150% since March 2019. The U.S. now has the most contactless cards of any market globally at 175 million, with nine of the top ten U.S. issuers actively rolling out new contactless cards to customers. U.S. consumers have been quick to adopt these new cards; not only do more consumers have cards, they are using them regularly as contactless card transaction growth continues to accelerate.
It turns out the contactless payment methods are even preferable, or at least not painful, for most people. According to the NRF study, 67 percent of people reported they were “satisfied with the experience.” Further, 57 percent of them said they would continue to use contactless and mobile payment methods after the pandemic was over.
Fraud and chargebacks were still big concerns for retailers however. According to the NRF survey, they found the following concerns for merchants:
- 67 percent are concerned about processing fees for Card Not Present (CNP) fees.
- 65 percent were concerned about cyber security and data privacy risks.
- 63 percent were concerned about greater fraud.
- 61 percent were concerned about increased chargebacks on disputed purchases.
To learn more about how you can accept contactless payments while still reducing both friendly and malicious fraud, protecting your cybersecurity, and reducing disputes and chargebacks, CB-Alert can help, Please visit the CB Alert website.