… and why Americans will never turn back
By Scott Johnson, SVP, Galileo
The U.S. has long lagged the rest of the world in our adoption of contactless payments. Analogous to the U.S.’s slower-than-most adoption of EMV, there are many reasons we’ve been late to the party. But recently, with encouragement by the major payments networks, more issuers have become interested in issuing contactless cards and more merchants have turned on the ability to accept contactless cards.
Still, consumer payment behavior is governed by habit. Absent a real incentive, like demonstrated convenience or rewards, it’s a challenge to move the consumer behavior needle. But COVID-19 has provided those incentives; not in the way we in payments usually think of incentives, of course, but with the biggest incentive of all—maintaining one’s personal health.
For all the damage COVID-19 has wrought—in fact, because of it—the pandemic has provided the incentive component of the contactless card trifecta. People are now sensitized to avoid touching any public surface they don’t absolutely have to, including POS terminals. This sensitization is not only accelerating contactless payment adoption in the U.S. but making contactless payments a significant and permanent part of the way Americans choose to transact.
Consumers will stay with contactless cards for the convenience.
Visa recently reported that the U.S. now has the most contactless cards of any market globally, while Mastercard noted that contactless transactions grew twice as fast as non-contactless transactions in the grocery and drug store categories—essential retailers during the COVID-19 outbreak.
If I extrapolate what we’re seeing in the transactions that we process here at Galileo, I believe many of the consumers who are taking the plunge and using their cards for contactless transactions during these COVID-19 times will continue to use their cards contactlessly after coronavirus fears have abated. In other words, consumers may come to contactless payments out of fear of contracting coronavirus, but they’ll stay for the speed and convenience.
Part of that convenience involves push provisioning. At Galileo, we offer push provisioning in real-time directly to mobile wallets—Apple Pay, Google Pay and Samsung Pay. Our clients can create accounts on the Galileo platform and their customers can push provision their account within a few seconds to their mobile wallets on their phones or wearables. This, of course, is taking contactless to an entirely new level—totally cardless payments.
Full contact transactions will go the way of the handshake
You could think of full contact transactions in the way people are now thinking about the handshake, like: “Wait, maybe that just doesn’t make sense anymore.” Once people give contactless cards a try, they have that ah-ha moment, “Yes, I’m comfortable with tapping, and it’s faster and easier than swiping or dipping.”
And, after that, there’s no reason to ever do a full contact transaction again.