Retail researcher RBR has released a new analysis that underscored the longlasting impact COVID-19 has had on the global contactless card ecosystem.
The firm presented data showing contactless purchases have increased by 36% globally in 2020. The reason stated is hygiene concerns, inevitably forcing customers to minimise physical contact points-of-sale by using contactless payment methods.
RBR also notes that governments worldwide have managed to quickly adapt to this trend, with countries such as the UK, the Czech Republic, and the Netherlands increasing the PIN-less payment limits, driving contactless sales even further.
Contactless technology is gradually replacing cash in making low-value daily purchases. Regulators and financial institutions alike see this shift as mandatory for the creation of a robust digital finance infrastructure.
The Chinese Central Bank, for instance, has ordered that all newly issued payment cards are made contactless to boost cashless payment rates.
RBR further reveals that Europe exhibits the highest number of contactless purchases per card on average, while Ukraine has the most active contactless card users globally.
Daniel Dawson, Lead of the RBR study, commented: “Issuers got the message quickly during the pandemic that demand for contactless was increasing as customer habits changed. In 2020, contactless cards got the extra push they needed to extend their reach across customer segments and regions, a trend that will only continue with time.”
The report also makes a prediction on the growth that the contactless card payments will experience in the upcoming years, forecasting a 23% year-on-year increase that will lead to over 500 billion contactless card purchases by 2026.
All 65 countries covered in the report are expected to see a rise in the contactless rollout, with a total of 81% of all cards being contactless in 2026.
According to RBR, the growth rate will be most pronounced in the Americas. The region’s notoriety of slow issuing drastically changed in 2020 when the banking and fintech sectors in Brazil and Mexico ramped up operations which brought local contactless card numbers to almost triple in size.
Regardless, contactless card payments may find it difficult to gain momentum in other countries that already have established alternative payment methods, such as the QR code payments in Indonesia, as noted by RBR.
Such obstacles may be avoided if international card schemes focus on mandates for issuance of their cards as contactless.