Pandemic to accelerate growth of electronic payments
The transition from cash to electronic payment will be accelerated by consumer behaviour learned from the COVID-19 pandemic, according to GlobalData, a leading data and analytics company.
GlobalData’s Covid-19 Sector Impact: Payments webinar noted that online, cashless and mobile transactions would see long-term growth as consumers change their spending behaviour to avoid contact with the disease in the short term.
Sam Murrant, Lead Payment Analyst at GlobalData, commented: “Lockdowns and social distancing measures will force consumers to reduce physical spending in stores, and a global recession looks very likely to follow. Payments will shift from cash to electronic alternatives – especially contactless card payments, mobile payments, and online payments – boosting revenue for the payments industry in the longer term.
“Overall consumer payments growth will slow as lockdowns restrain consumer activity. E-commerce will experience a short-term boom, however, out of necessity, which will lead to sustained growth as consumer behaviour changes.”
He concludes: “Mobile wallets also have an opportunity for growth, as they can leverage their ability to pay at the point-of-sale (POS) without ever needing to enter a PIN – presenting themselves as a safer means of transaction compared with contactless cards. Similarly, e-retailers have a chance to appeal to new customers.
“Consumers that have never previously transacted online such as the elderly will now have to engage with this payment method, and will learn new behaviours. E-retailers, therefore, have a huge opportunity for long-term growth by hooking previously non-engaged customers.”