5 Trends Shaping the State of Contactless Payments
By BOBBY MARHAMAT | CONTRIBUTING WRITER
If you did so in the past year, then you’re in the supermajority. More than 80% of Raydiant’s State of Consumer Behavior 2021 Survey respondents have used contactless payments to check out at least once in the past year.
This is consistent with what we know about shopper attitudes, as well as what retailers have observed. According to the National Retail Federation (NRF), 94% of retailers expect an increase in shoppers’ usage of contactless payments going forward.
We also found that shoppers are using contactless payments repeatedly, indicating that these methods are largely effective. More than 72% of respondents use contactless payments routinely.
Sparking the contactless revolution
Faster checkouts with fewer moving parts are the key driver of contactless payments. 47.2% of respondents said convenience was the primary reason that they have used contactless payment channels.
Safety is not far behind as an impetus for shoppers to use contactless checkout. 35.5% of respondents said health and safety concerns have prompted them to go contactless in the past year.
It’s not a coincidence that, per Mastercard, contactless payments rose by 40% as the COVID-19 outbreak emerged. Customers feared that cash and card-swiping machines could be hosts for germs, so they were quick to adopt contactless alternatives.
However—and this is due at least in part to convenience—70% of shoppers who went contactless plan to stick with contactless payments even when COVID-19 subsides.
Leaving room for improvement
As retail organizations, we have an imperative to continuously ask: what about the customer experience can be better?
Shoppers have reported specific issues with contactless checkout. Issues include slow machines, unclear instructions, and payment channels that just don’t work. This leads me to believe that contactless payments, as a whole, still have room for improvement.
Just about 50% of survey respondents have had contactless payments fail in some way. Two leading reasons were contactless channels simply not working (20.1%) and payment processes being too slow (20%).
It’s essential that your organization implements contactless payment methods that are high-quality, and that integrate well with your existing systems. Additionally, Retail TouchPoints recommends posting adequate signage, or even dedicating staff, to guide customers through the contactless checkout process.
Customers expect to use contactless payments more
74% of consumers said they expect to use contactless payments more frequently in the next year. 44% of those consumers expect a “major” increase in their use.
MarketWatch attributes the projected surge in contactless payments to increasing familiarity with technology, cost savings for retailers, and convenience, among other factors.
Some projections show contactless payments becoming a multi-trillion-dollar industry within the next decade. Customers’ own sentiments seem to align with these projections for continued growth.
Will your organization be part of the contactless boom?
Choosing stores based on contactless options
Failing to offer contactless payments could mean losing business. The trade-off really is that simple. 57% of respondents said they’re more likely to shop at stores that offer contactless payments than those that don’t.
When you’re determining how much to invest in contactless payment channels, ask yourself what you’re willing to sacrifice by having inferior contactless systems or no contactless payment options at all. The sacrifice could be obvious: sales.
Contactless payments should be part of your in-store experience. With that said, your contactless checkout must:
- Operate consistently
- Operate quickly
- Come with clear instructions
- Accommodate customers’ expectations for cleanliness
Ideally, you will offer customers as many contactless options as possible. Some customers are used to tap-and-go, while others prefer services like Apple Pay or PayPal. Keep this in mind.
Brick-and-mortar retail is continuing to thrive thanks to convenience-driven tools like contactless payments. Being able to pay quickly, and pay safely, has become a standard expectation of shoppers today.
As you continue to conceive and update your in-store experiences, you’d be smart to consider contactless checkout as a foundational feature.
Bobby is the CEO of Raydiant, a digital signage provider that helps businesses turn their TVs into interactive signs that drive sales, improve the in-store experience, and reinforce brand messaging. Prior to joining Raydiant, Bobby served as the COO of Revel Systems where he worked on the front lines with over 25,000 brick and mortar retailers.
Bobby has held leadership positions including CEO, CRO, and VP of Sales at companies such as Highfive, Limos.com, EVO2, Verizon Wireless, LookSmart, ServerPlex Networks, and Sprint/Nextel. When Bobby’s not spending his time thinking about the future of brick and mortar retail, you can find him traveling, reading, or tending to his vegetable garden.