Finance & Loans

New Report Shows Contactless Payments Continue to Grow in Favor

According to recent reports, contactless credit card transactions continue to rise. In fact, contactless payments caught up to their debit counterparts as a percent of volume at the end of the summer. Mobile wallets experienced incredibly strong growth as well. Mobile-wallet credit transaction volume climbed to 96% in August.

“Although credit purchase dollars dipped slightly from last month’s growth, performance was still strong at +122% compared to 2019. The average mobile-wallet credit purchase increased by $3.56, up 13%, to $30.86 in August 2021 compared to August 2019,” the PSCU Payments Index, a St. Petersburg, Fla.-based credit union service organization, reported.

Breaking things down even further among merchant categories in the index, back-to-school related purchases increased over the last year. Credit purchases were up 18% and debit purchases 12%. “This observation is influenced by multiple factors, including the challenging credit activity/growth environment in 2020 as debit activity experienced substantial growth during that time,” the index noted.

The Driving Force Behind Contactless Payment Growth

The rise of contactless payments has been fueled by the COVID-19 pandemic. The challenges over the past couple of years have simply accelerated what was already becoming more popular. Contactless had already made a breakthrough, but the pandemic took this method to another level. This payment type has served as a solution to endorse a germ-free environment.

According to a survey conducted by the Payments Journal in the spring of 2020:

  • 51% of people in the U.S. started using mobile wallets in the early days of the pandemic.
  • Around 58% of people in the U.S. were more likely to use contactless than they were before the pandemic.
  • MasterCard witnessed an increase of 40% in contactless payments in the first quarter of 2020 alone.
  • This increased adoption of contactless spurred the biggest financial institutions across the globe to increase the issuance of EMV cards.

The Benefits of Contactless Payments

In addition to creating a more germ-free environment for businesses and consumers alike, contactless payments have been meeting the evolving demands and preferences of today’s consumer. Contactless payments are known to increase the speed of transactions. On average, a contactless payment takes just 15 seconds. They are also known to boost the level of security.

The biggest advantage of all, however, is the convenience in making contactless payments. These payments are not just restricted to cards. Users can easily interact with the help of phones, tablets and other accessories. Payments are fast, since there is no need to dig for and swipe a physical card.

What’s Next for Contactless Payments?

It’s safe to say the future of contactless payments is secure. If your business hasn’t embraced this option yet, now is the time to make sure your payment processing supports this method. Your business and customers will thank you for it.

Author Bio: Michael Hollis is a Detroit native who has helped hundreds of business owners with their business loan solutions. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.

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