Do contactless card payments still encourage new business?

Utilising Near Field Communication technology (NFC) and Radio Frequency Identification (RFI), credit and debit cards with a contactless symbol (and other contactless devices) can pay for goods and services at a contactless payment terminal quickly and easily without needing to insert the card or entering a pin number.

With the majority of customers in many countries now opting to make contactless payments, as opposed to cash payments or chip and pin payments, businesses everywhere are enjoying the benefits of offering contactless payments to their customers.

But given the technology has been around for a number of years now, does offering contactless payments still encourage new business?

What percentage of payments are made using a contactless payment card?

In June 2022, contactless payments accounted for 63 per cent of all credit card transactions and 76 per cent of debit card transactions in the UK, according to data from UK Finance.

While these figures alone don’t offer an indication as to the rise of contactless payments or the encouragement customers feel at knowing contactless payments are available, other figures provided by UK Finance do show a significant increase in the usage of contactless cards.

One later, in June 2023, according to the same report, there were 8.2 per cent more contactless debit card transactions and 7 per cent more contactless credit card transactions than one year prior.

Given this data and the rate at which contactless payments are seemingly growing, businesses would be wise to onboard contactless payments - if they have not yet done so - to meet the still-growing trend of the mass spending public.

Will contactless card payments continue to rise at this rate?

If the current usage of contactless payments is anything to go by, and if predictions by expert analysts are to be believed, contactless payments aren’t set to simply continue rising at this rate, but experience yet another massive surge.

The value of contactless payments on a global scale is set to exceed $10 trillion by 2027, while the percentage of contactless payments is expected to shoot up by a staggering 227% between 2022 and 2026, according to a study by Juniper Research.

Given these numbers, it is understandable to assume businesses that fail to offer contactless as a form of payment may not only miss out on sharing in the huge revenue outlined above, but will lose out on customers who become increasingly reliant on contactless payment cards as their primary spending choice.

Why do customers lean towards contactless payments?

There are several reasons why many customers appear to favour contactless technology over more traditional or alternative forms of payment:

Speed

While cash transactions are still perfectly acceptable, they cost each customer far more time than if they’d have made the same payment using a contactless card.

Contactless payments take less than a second to go through, according to Lloyds Bank, which is far quicker than a standard cash payment which can take anywhere up to a minute to complete - this includes counting the cash, handing it over, waiting for change etc.

This proves to be a more pleasant interaction for the customer, who then has more time to spend on other things in their day.

Add to this the notion that people’s patience seems to have dipped significantly in the digital age, and contactless payment technology offers a quickfire payment method to meet current customer demands.

Convenience 

Customers in the digital age also value convenience as well as speed in their retail interactions.

The ability to offer a fast and convenient shopping experience is key in attracting and retaining customers in an age where the quicker you can offer a service, the more likely people are to side with you over the competition.

82% of customers said they valued convenience very highly in their shopping experiences, according to a recent report by consumer data website Numerator - that’s over 4 out of every 5 customers that expect a convenient interaction as standard and will likely opt to shop with businesses who can offer the most convenient exchange possible.

Offering contactless payments is a clear step in the right direction in offering convenience to every customer who steps into a business premises.

Versatility

While contactless payments have been around for many years now, the applications of the technology and the way it is used by the average shopper are changing far more frequently.

One example of this is the use of contactless mobile payments and contactless wearables that utilise digital wallets.

Digital wallets (like Apple Pay or Google Pay) offer contactless users the chance to connect their bank accounts to a digital platform and pay for goods and services via contactless seamlessly.

While digital wallets may still be in their infancy compared to other forms of payment, there’s every reason to expect accepting contactless payments via digital wallets will be a key draw for customers in an ever-increasing digital world.

In fact, it is predicted that there will be over 5.6 Billion digital wallet users globally by 2026, according to a report from Juniper Research - that’s well over half of the world’s population.

If businesses hope to secure the favour of customers using this technology as it continues to expand, they would be wise to onboard contactless payments to remain relevant.