Why Are Contactless Payment Methods Here To Stay?

There has been enough said about avoiding close contact to prevent transmission of COVID-19. The newer fast-spreading variants have only exacerbated the need. This has led to a surge in the need for contactless technology in various places including commercial establishments. All industries including the payment sector have witnessed defining changes. The move from sticky traditional payment methods to digital methods was a long pending one but was accelerated due to the pandemic.

According to data released by the National Payments Corporation of India (NPCI), UPI transactions recorded a jump of over 103% in 2020, in comparison with 2019. UPI transaction volume in 2019 exceeded INR 202 thousand crores, whereas, in 2020, it dramatically crossed INR 416 thousand crores

Some of the lifestyle changes brought about by COVID, are here to stay. One of them is the use of Contactless Payments Technology.

Here’s Why I Believe That Contactless Payment Methods Are Here To Stay:

Convenience & Security

COVID-19 has played a huge role in highlighting the convenience and security offered by contactless payment methods. Despite the hesitation, 2020 saw people gravitating towards digital transactions due to the fear of COVID-19, and promotion of digital payments by WHO and RBI to curtail the spread of the virus. Digital payment methods were adopted widely across India and we saw a drastic hike in numbers. With customers and retailers having experienced digital payments firsthand and its convenience, they are using it more often! With usage comes trust and with that comes stickiness and increase in adoption.

Habitual Change is Sticky

As per an article published by Outlook, India has one of the largest Gen Y populations with 426 million millennials. We are already aware that this tech-savvy generation prefers technology to simplify their lives. Though digital payments were once an optional means of transaction, they have now become indispensable for this generation. Furthermore, the older generation (between the age of 40 to 65), are also turning towards cashless modes of payments due to fear of contracting COVID-19.

Large-Scale Adoption by Retailers

Retailers often explore technologies and solutions that are most likely to improve customer experience, and boost sales. Merchants had incorporated advanced digital methods like static QR codes, UPI etc. However, most of their customers abstained from cashless payments, some due to lack of awareness and others, due to limited understanding of such modes. Ever since the pandemic, customers have been compelled to adopt contactless payments and had enough time to get accustomed to it. Looking at the growing demand for contactless payments, there has been a further increase in interest from retailers about contactless technologies such as UPI, dynamic QR codes, SMS Pay. Retailers have invested their time, money, and resources in setting up an advanced payment system, and thus we can all agree that there won't be any stepping back.

Government Push

The government has been keen on transforming India into a cashless society. Right from eliminating MDR on UPI transactions (up to INR 5000), to making it mandatory to print dynamic QR codes on e-invoices; our government has been pushing digital payments and has been doing everything to increase its adoption in the country.

Innovations by Fintechs Improve the Experience

While customers demand quick and contactless experience, FinTech players are making it easier for merchants to fulfil this need. If COVID-19 has been a harbinger of this shift, the payment service providers, with their excellence in innovation, have worked swiftly towards ensuring fast time-to-market for all new technologies thereby giving an integrated, secure and seamless payment experience to retailers and customers alike.

The trends and events witnessed in 2020 look like a work of fiction—amusing and gripping. People harnessing the power of digital is not surprising, it is the rate at which the nation is transforming. Stakeholders are espousing the use of this silver tech, and contactless payments are only growing by leaps and bounds. From metropolitan to tier-3 cities and rural areas, the penchant for digital transactions is only going to escalate. We expected this to happen by 2025, but COVID-19 has acted as a catalyst, promoting contactless payments across the nation.

Ezetap is at the forefront of integrated payment solutions in India. Our POS solutions can be tailored to your business needs and help you streamline your end-to-end payment processes. Be it dynamic QR codes or SMS Pay setups, our experts will aid you in implementing your chosen solution at all offline touchpoints.

Contact us at 1800 313 141516 and we will arrange a demo to help you understand how you can start accepting contactless payments.