When it comes to payment, there will be no reverse gear on consumer behavior as we head into 2021.
The third edition of its global research study, the “Visa Back to Business Study – 2021 Outlook” found that the global rise of contactless payments in 2020, spurred by challenges including consumers looking for safer ways to pay amidst the pandemic, is showing no signs of slowing down.
Two-thirds (65%) of surveyed consumers would prefer to use contactless payments as much as, or even more than, they are currently, and only 16% say they would revert to their old methods of payments, post-pandemic.
Part of the reason is health. While the universal focus is on mask use in stores, consumers are also eager to have payment alternatives to handling cash, pens, and keypads. Nearly half (47%) of consumers said they will not shop at a store that does not offer a contactless way to pay.
In turn, this trend is shaping the way SMBs are enabling contactless payment. In June 2020 only 20% of SMBs surveyed had offered contactless payments for the first time — in the survey, 39% reported they have started to accept new digital forms of payments. Nearly three in four (74%) SMBs expected consumers to continue preferring contactless payments even after a vaccine is widely available.
The support for contactless payment follows a broader trend for SMBs to meet consumers where they are now, i.e., online. Globally, 82% of SMB owners have made updates to their operations to meet the increasing demand for digital payments, up from 67% in summer 2020 when the first Visa Back to Business Study was released.
“With greater hindsight into 2020, we can clearly see that the digital payment experiences that excelled the most — contactless and e-commerce — were driven out of necessity and have become more habitual in people’s daily lives at a pace not often seen,” said Kevin Phalen, global head of business solutions, Visa.
“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,” he added.
SMBs are assessing what other payment technologies are critical to meeting today’s consumer expectations, with results led by security and fraud management software (47%), contactless or mobile payment acceptance (44%), accepting payments via a mobile device (41%), installments or ‘buy now, pay later’ (36%) and digital backend payment operations (31%).
The report noted that tech-savvy business owners (52%) are more likely than their novice counterparts (39%) to invest in security and fraud protection. Recognizing the significance of and responding to a potential fraud attack will continue to be a decided advantage in 2021 as the shift to digital sales continues to increase. Despite the concern, global fraud rates remain at historic lows, at roughly USD 0.007 for every USD 1.00.
While contactless payment is on the rise, consumers are also taking steps to keep their credit cards clean. More than three in five (62%) are taking steps to keep their credit cards clean; using a disinfectant on their card is the top approach, at 31%.
Image credit: iStockphoto/Niphon Khiawprommas