As COVID-19 cases, hospitalizations and deaths continue to soar in the United States, consumers have become increasingly concerned about touching publicly shared surfaces and devices while shopping or dining out. This has resulted in many retailers and restaurants discouraging the exchange of cash and credit/debit cards. Business owners are adopting safer alternatives such as contactless and digital wallet payments at point-of-sale checkout terminals and checkout counters at a growing rate.
Before the COVID-19 pandemic crisis introduced consumers to social distancing and a “new normal,” touchless transactions were already gaining ground as a preferred method of payment. The pandemic sped up contactless transaction volume growth at essential merchants like restaurants, grocery stores, warehouse clubs, convenience stores and pharmacies. All signs indicate this growth will last well beyond the COVID-19 crisis. In a February 2020 report from Juniper Research, U.S. transaction values were forecast to grow from $178 billion in 2020 to $1.5 trillion in 2024. If consumers were warming up to contactless before COVID-19, the demand has soared since March. According to a MasterCard global consumer study released in April, 79% of respondents worldwide say they are now using contactless payments, citing safety and cleanliness as key drivers.
Types of contactless payments
For those who want to pay for items in restaurants or stores without touching their wallet or cash, there are a couple of options. One is using a mobile wallet, which requires their device and the payment terminal to be within close proximity for the transaction to occur. Mobile wallets, also called digital wallets, are apps for a smartphone that can store personal credit and debit card information, allowing one to pay at checkout with just a tap of their smartphone.
The other type of touchless payment is with a tap-and-go credit or debit card, which allows for a simple way to speed through the checkout line without inserting a card or using a pin number.
Benefits of mobile wallets and contactless payment
Contactless payments are as much as 10 times faster than other methods of in-person payment, and 69% of users find contactless transactions more convenient than those involving paper money. Not only are these easier and more secure methods of payment, but they help reduce consumers’ exposure to COVID-19. There are no apps to download, no hardware to buy and no middleware. The payment system is directly integrated with the point-of-sale system.
Contactless payments for restaurants
Restauranteurs are feeling pressure to innovate like they never have before — just to stay in business. Technology has played a powerful role in helping restaurant owners facilitate a safe experience for their employees and guests.
Digital transactions have enhanced the customer experience by offering point-of-sale systems for online ordering, menu updates and touchless payments. Diners can use their smartphone to order food and pay for their order without waiting on their server to bring their check and return their card. The transaction is completely secure so diners can eliminate any worries about their credit/debit cards being touched by servers or cashiers. Restaurant owners benefit because the check-out process is quicker and more efficient. Servers have more time to focus on providing good customer service and a safe dining experience for their guests.
Resiliency as a new business model
Retailers and restauranteurs have rapidly adopted new ways in 2020 to harness technologies along with introducing new products and services in their effort to keep their business afloat and their customers safe and engaged. The COVID-19 pandemic has accelerated much of this innovation. It is anticipated that innovations created during the pandemic will far outlive the crisis and will give rise to new business models.