Contactless payment methods, are they here to stay?
In the third edition of Visa’s global study titled ‘Visa Back to Business Study - 2021 Outlook’, the report looked at current consumer payment trends and the top investment areas for small businesses.
Within the report, Visa identified that the new year will bring increased focus on security and fraud prevention, emerging payment tools and mobile payment acceptance.
“With greater hindsight into 2020, we can clearly see that the digital payment experiences that excelled the most – contactless and eCommerce – were driven out of necessity and have become more habitual in people’s daily lives at a pace not often seen. If 2020 was the year of contactless and eCommerce, results of this study tell us that 2021 will bring greater attention to security and fraud prevention, and trial of more emerging digital commerce tools that help businesses thrive,” commented Kevin Phalen, global head of business solutions, Visa.
Report findings: investment areas for SMBs
Expanding on the report’s findings when it comes to small and medium businesses (SMBs), Visa found that by the end of 2020, 82% of SMBs embraced new forms of digital technology in order to meet changing customer behaviours, with many looking to assess other technologies that will be critical to meet expectations in 2021, technologies include:
- Security and fraud management software (47%)
- Contactless or mobile payment acceptance (44%)
- Accepting payments via mobile device (41%)
- Installments or ‘buy now, pay later’ (36%)
- Digital backend payment operations (31%)
Report findings: consumer payment trends
Gobally, there has been a rise in contactless payments. The report attributes this rise in 2020 to the challenges presented by COVID-19, with consumers looking for safe and contactless ways to pay. Visa reports that this trend is not expected to slow down, since June 2020, SMBs offering contactless payments for the first time has risen from 20% to 39%, with 79% of SMBs expecting consumers to prefer the contactless payment method even when the vaccine is widely available.
Additional trends include a rise in ‘meeting consumers where they are’ and investments in security. Globally, 82% of SMBs have updated their operations to meet demands for digital payments (up 15% compared to summer 2020).
Meanwhile, ‘tech-savvy business owners’ are reportedly more likely (52%) than their ‘novice counterparts’ (39%) to invest in security and fraud protection, reports Visa, who believes that recognising the significance of and responding to a potential fraud attack will be an advantage in 2021.
Other trends in the payment industry:
- 65% of consumers would prefer to use contactless payments, with only 16% wanting to revert to old methods post-pandemic
- 47% state that they would not shop at a store that doesn’t offer a contactless way of paying
- 62% of consumers are taking steps to ensure their credit cards are clean, with using disinfectant being the top approach (31%)
For more information on business topics in the United States and Canada, please take a look at the latest edition of Business Chief North America.
