Person's hand making a contactless payment with their smartphone

Coronavirus may have changed payments forever

Contactless payments through debit and credit cards, smart watches and various devices have not always had the smoothest of rides since the technology entered the mainstream.

Security around the payments themselves and stories of “skimming” of devices and cards by criminals being two of the early concerns consumers expressed.

As with all new technologies, these concerns began to evaporate over time as more consumers and businesses learned to use contactless payments to their advantage.

But, there are still those who use cash regularly and actually prefer to pay with physical money.  A 2019 report from the Payment Services Regulator (PSR) showed that 28 per cent of consumers said they preferred to pay with cash and 83 per cent of consumers used cash to make a payment every week.

Sweden is in the middle of a movement toward a cashless society.  However, their government had to step in during 2019 when some banks refused to accept or process cash.  Less affluent and elderly people were finding themselves unable to make transactions, leading to criticism of the policy and backup options being wheeled out to offer support.  The amount of cash in circulation in Sweden actually grew  last year, for the first time since 2007.

So, up until 2020, it seemed that cash was no longer king, but certainly wasn’t ready to go extinct.

 

Coronavirus

That was until the seismic shift caused by the biggest global disruptor since World War II.  Coronavirus has not only restricted the movement of consumers, it has resulted in the minimisation of human contact altogether.

Retail stores are funnelling their customers towards contactless payment terminals wherever possible.  The UK’s contactless payment limit was raised from £30 to £45 to allow for less physical contact between people and payment machines.

Talk from the Prime Minister is suggesting that the UK is not moving towards achieving a vaccine at any significant rate, meaning that sharing closed spaces, vehicles and items (such as cash) will present a level of risk for some time.  One way of minimising that risk is to utilise contactless transactions as much as possible.

That doesn’t just mean tapping debit and credit cards more often.  It means businesses having the facilities to take more payments remotely; through websites; and using virtual payment terminals.

Payment flexibility has been a driver of business for public-facing companies for some time, but it is now going to become even more important as less people use cash.  YouGov reported in April that cash use is down by 60 per cent since the start of the pandemic and 54 per cent of people have said they are avoiding using cash.

The growing consensus is that the UK’s contact-reducing restrictions will continue for the long term, even after lockdown is ended, mean that businesses must now plan for how they can take payments more easily.

The virus has forced the issue of behaviour change away from cash and has accelerated a Sweden-style movement.  Whilst it certainly won’t eradicate it altogether, it is no longer an option whether to offer customers multiple payment options.

 

Help is available

If your business requires help in setting up more flexible digital, contactless or electronic payment services, Great Annual Saving Group (GAS) operates a comparison service in this B2B market.  Our experts can help you define what types of payment you need to make available to your customers and search the market for the most appropriate payment deal for your business.

Merchant services is a notoriously tricky market to negotiate with auto-roll contracts and very restraining terms and conditions which leave businesses with tight windows in which to act.  Our team can help you traverse these pitfalls and create fast, efficient and cheap payment methods for your business to offer your customers safety and reliability at a social distance.

Speak to us for a free, no-obligation chat on how to prepare for your business coming out of lockdown.

 

 

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