A lot of us believe cash is faster, easy to handle and convenient. Digital solutions could never replace the simplicity and ease of using cash, or could they?
Sample this: it takes about 30 seconds to complete an across-the-counter cash payment; including the time taken to pull out the currency from your wallet, look for change and ensure the money is safely tucked in. It takes about three seconds to conduct the same using a contactless card; including the time to pull out your wallet which contains your contactless card, tap against the terminal and tuck it back in.
Contactless payments are here to stay. Over the past year alone, the payments industry in India has undergone rapid changes with new technologies, innovation and a desire for instant gratification changing the way we pay.
Speed, simplicity and security matter more than ever. Making a payment, transaction or moving money should be as simple as sending a text message to a friend. Contactless payments provide the opportunity to bring simplicity to payments as never before.
Put simply, contactless payments allow you to transact with a mere tap against the point-of-sale terminal, without having to swipe or insert your card at the merchants’ outlet.
Australia and the U.K. have reported reductions in cash usage by 16% and 12% respectively following migration to the contactless mode. And this, in markets that were significantly more digital than we are today. This shows the immense potential that contactless payments hold for a cash-centric economy such as India. More and more consumers, even across India, are now waking up to the benefits of contactless payments.
Working with one of India’s largest modern retail chains over the past few months, we witnessed the largest uptake for contactless card usage in smaller towns across the country. And these weren’t just impulse-based, low-ticket buying. Data shows that shoppers are more than happy to use contactless cards or devices to make regular shopping purchases too.
The popularity of the contactless form of payment across some of the most developed markets clearly underlines the robust technology platforms these solutions are built on. These offer the same level of security and reliability, while adding further convenience and speed to your transaction. This is something we could all get used to.
The phenomenal growth of contactless payments in Australia is a good example. Visa’s contactless product now accounts for close to 76% of all face-to-face card transactions in the country. It’s virtually second nature to walk into a store, conclude your shopping, tap your contactless card to complete payment and walk out. For a merchant too, a three-second payment transaction means shorter queues, no costs for managing cash and importantly, a satisfied customer.
And, the beauty of contactless payments is it’s no longer about the form factor anymore. Smartphones have already revolutionised the way the world pays and the added benefit of being able to use the mobile phone as a payment instrument has opened up a new world of possibilities. Closer home, the adoption of recently introduced contactless products such as Samsung Pay even in small towns across the country shows easy acceptance and ubiquity of the technology.
Debit card - new hero?
In the race for the consumers’ wallet, the humble debit card, which was resigned to withdrawing cash from ATMs, could emerge as the surprise winner, albeit in a contactless avatar. The established base of over 800millon debit cards in India could be a game changer in our efforts to go digital.
Most commerce transactions today are not seamless. Consumers aren’t able to experience a consistent experience across different platforms and often end up returning to cash. Therein lies the opportunity to leverage technologies that help influence consumer behaviour.
With rising customer expectations, payment experiences that succeed are the ones that offer a relevant customer experience by adding convenience, subtracting a pain point or adding value. With all the aces up its sleeve, contactless payments are truly poised to give cash a good run for its money.
(The writer is group country manager, India and South Asia, Visa)