There have been many changes throughout the retail and convenience industry, due to the COVID-19 pandemic. One of the major changes includes the increase on cashless and contactless payments. Throughout the pandemic, cash has been seen as a carrier for germs and a possible way of transmitting the disease.
GlobalData says that the trend will continue in the post-pandemic environment to transform the payments ecosystem.
“Once a convenience but now a necessity, online shopping keeps the economies running during the COVID-19 crisis while also helping to control the spread of the virus,” says Fintech Analyst at GlobalData, Ayushi Tandon.
“The pandemic-induced surge in e-commerce form the existing shoppers an in influx of new consumers, notably for grocery, food delivery, health and other supplies, has accelerated the digital payment adoption that was sluggish and varied by other country until 2019.
An analysis of GlobalData’s Disruptor Intelligence Center reveals how COVID-19 positively impacted various payment tools:
With increase in online shopping, e-retailers are competing to offer various types of payment gateways:
Redirects: Gateway takes customers to the payment page of a paytech company such as PayPal to complete the transaction.
Checkout on-site and payment off-site: Stripe’s payment gateway, for example, allows payment on the retailer site, but the payment processing happens at Stripe’s back end.
Direct on-site payment gateway: E-commerce site handles both payment and processing without any help from third-parties. For instance, Amazon offers Amazon Pay to enable users to checkout instantly on-site. Shoppers can also use digital wallets, or net banking to complete the checkout.
From tap-to-pay to no-touch, contactless payments are an alternative to carry out electronic funds transfer at the point of sale. Quick response (QR) code and near-field communication (NFC) are two widely used contactless payment technologies that witnessed a strong boost during the pandemic.
QR code payment emerged as the most popular as it does not require traditional infrastructure such as cards, payment networks, merchant accounts, and payment processing terminals. NFC uses near-field communication technology to exchange data between readers (payment terminals) and payment devices (smartphones having digital wallets).
With the wide acceptance of contactless technologies amid COVID-19, biometrics-based payments through the face and touch recognition will become a routine in the future to address any security concerns with the current methods.