Safety Drives Innovation in Contactless Payments

Customers want fewer touchpoints at checkout as the pandemic continues.

October 30, 2020

SAN JOSE, Calif.—Consumers continue to prefer toucheless, contactless payment methods at onsite retail locations during the COVID-19 pandemic, reports.

A September 2020 PYMNTS and PayPal survey found that 57% of those surveyed said a retailer’s digital payment offerings made them more willing to shop there. The survey also found that customers want to avoid payment options that require physical contact, such as cash and cards via POS terminals. Twenty-six percent of respondents wanted to use contactless cards, while 23% expressed interest in curbside pickup.

A different PYMNTS survey also from September found that consumers value touchless over contactless. PYMNTS defines the touchless experience as one “where customers order online and have their goods delivered touch-free to their cars.” Touchless commerce options topped the list of experiences retailers should provide, with 66% wanting curbside pickup and 58% wanting home delivery.

The surveys also found that consumers have noticed the pivot to digital offerings. Seventy-nine percent of respondents said retailers they visit have either improved or added digital-first or touchless experiences within the last six months.

“It’s possible to imagine contactless could grab the upper hand in a post-vaccine world where consumers are a bit more enthused about going into stores. But given that a vaccine is probably at least several months away and COVID-19 case numbers are spiking all around the U.S. and around the world, it seems that entirely touchless payments will enjoy an edge in the race for quite a while yet to come,” PYMNTS concluded. “In fact, consumers could favor touchless payments well into the future depending on how much their preferences change on how they like to shop in-store between now and a vaccine’s development.”

However, contactless payments are more costly payment methods for retailers because the major card network block retailers’ routing choice on debit transactions.  Under the Durbin Amendment, debit cards are required to have two network options for retailers to choose which network to route the transaction. With the evolution to contactless and online payments, retailers do not have the same option even if a customer is paying with their debit card. NACS believes the blocking of routing options violates the law and has urged federal investigations of it.

Coronavirus Resources

NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.