As m-commerce takes the world contactless, should agencies follow suit?
Contactless and other mobile-based digital fintech payment methods surged in popularity during the pandemic and will remain in use afterwards. But are there risks to businesses and consumers? For our deep dive into all things Mobile, columnist Samuel Scott looks into the issue.
My stepfather still writes checks rather than use debit cards, even though he holds up store lines and annoys everyone. Why? He says it prevents careless overspending. And he represents both an opportunity and a problem for mobile payment apps today.
According to information compiled by Statista, weekly usage of finance-related mobile apps increased 20% in the US, 20% in China and 5% in the UK after the coronavirus pandemic had begun (see the left-hand graphic). Total business-related spending on mobile apps rose by 116% in Europe during all of 2020 (see the right-hand image).
Moreover, 11% of online adults in the US used a digital payment for the first time as the coronavirus pandemic was growing in April 2020, according to a Forrester Research report. 19% did so in May 2020 – and 62% of those were made using mobile phones rather than ‘contactless’ credit cards.
“The pandemic was like a fault line that caused a seismic shift in digital payment behaviors,” Lily Varon, a senior analyst at Forrester, tells me. “US consumers historically are very stubborn in our payment habits, but the desire to avoid touching cash and payment terminals were incentive enough to combat our collective inertia.”
According to the Forrester report, 57% of surveyed US online adults who used digital or contactless payments for the first time said they were ‘likely’ to continue using them.
“We’ve finally reached critical mass adoption in digital payments in the US as a result of the pandemic, but digital payments have been gaining ground over other payment methods like direct card usage for a few years,” Varon adds.
“Early indicators [today] point to some of these new payment behaviors sticking around: about half of those US shoppers using their credit cards in stores have recently used them to make a contactless payment – as in during early 2021.”
What will be the implications of this new payment system for consumers and merchants? For that, we need to look at history.