By Jack Forestell, Chief Product Officer, Visa
Economic fallout from the global pandemic began swiftly and mercilessly when in-person commerce all but stopped. Overnight, businesses were faced with a sink or swim moment and many rushed to adapt quickly, adopting safety measures that included accepting new forms of digital payments. And consumers were right there with them.
Millions of shoppers shifted to a new way to pay in response to the crisis. In Visa’s new global Back to Business study, 78% of consumers said they have changed their shopping habits in the wake of COVID-19, including shopping online whenever possible, using contactless payments at checkout and using less cash. In the U.S., we have seen a 30% increase in eCommerce among active Visa cards in segments like retail and restaurants compared to pre-COVID-19 activity.
Outside the U.S., over 60% of Visa transactions now occur with a tap(1). Touchless payments, or paying without physically swiping your card or handing it to another person, have become as critical as face masks and hand sanitizer to stem the spread of the disease.
But contactless payments are hardly a trend that will fade alongside the pandemic that sparked their surge, as they are easy to deploy and a fast, secure and convenient solution to the swipe. Always has been. Visa has been working with merchants, fintechs and transit authorities around the world to reimagine the Visa card as a contactless payment device and to enable contactless experiences beyond the card. The global demand for contactless solutions now will only accelerate that effort and ultimately change payments forever. This is our new normal.
Small businesses make big move to digital
Small and micro businesses account for more than 90% of global businesses (2), which is why we need them to bounce back in order for economic recovery to happen. Rethinking the checkout experience is one way SMBs worldwide can overcome the financial impact of COVID-19. Nearly half (48%) of consumers we surveyed said they would not shop at a store that offers only payment methods that require contact with a cashier or shared device. Nearly two-thirds said they would switch to a new business that installed contactless payment options. For close to half of global consumers, using contactless payment methods is among the most important safety measures for stores to follow.
Paying and getting paid in the most efficient way possible in today’s environment also means employing innovations under the hood. Visa Direct enables secure, real-time (3) settlement so workers and families can send and receive money quickly and easily, and small businesses can access funds to make payroll and pay suppliers. Faster access to cash flow was an issue for 76% of SMBs during the last four months of the pandemic (4). Innovations like these are more important than ever as job losses rise and small businesses strain to stay afloat. Quick access to funds are critical.
Reimagining commerce in ways that both reduce contact and enable new digital experiences is necessary for businesses of all sizes. Contact-free curbside pickup for online and mobile orders is on the rise, with more than a quarter of consumers using food or retail pickup for the first time. And solutions like Visa’s Cybersource enable customers to book appointments or buy products and services and pay via a link sent to their phone.
Fintechs can help fuel recovery
Fintechs are also driving innovation in digital payments that can help pave the road to recovery, helping consumers and businesses manage their money, invest, receive loans and send payments worldwide from the comfort of a device. Visa partners, invests in and supports many emerging fintechs globally through programs that can help them scale efficiently. Our Visa Fast Track program streamlines the process of connecting to our network with turnkey access to our partners, online licensing, Visa APIs and extensive go-to-market toolkits.
Our Fintech Fast Track partners have already stepped up to address the needs of small businesses impacted by the pandemic.
Transit systems ride the contactless wave
Cities and transportation systems are ready to get moving again and that means delivering safe, reliable and efficient modes of transport in response to COVID. Enter contactless payments. Riders can simply tap their contactless-enabled card at the terminal and go – no waiting in line to buy or refill a transit card, touch a payment terminal or fumble for cash. This was a convenience before COVID-19, it is now an imperative to boost rider confidence.
Globally, Visa now has more than 500 active transit projects and has helped cities, including Brussels, Bucharest, Hong Kong and others, launch tap to pay solutions over the course of the pandemic. More projects are deploying rapidly globally, thanks to our expanded partnership with Cubic Transportation Systems.
The dramatic rise in consumer demand for contactless ways to pay, whether via eCommerce or contactless cards and wallets, has catapulted a change that will remain long after the pandemic. In countries like Australia, the U.K, Canada and South Korea contactless payments are already the norm. In the U.S., contactless card usage has grown 150% since March 2019 (5) and continues to gain rapid adoption as more options become available and the need becomes apparent.
We are working hard and fast toward making contactless experiences more widely accessible to consumers as well as businesses of all sizes (in fact, more than 80 of the top 100 Visa merchants are contactless-enabled). This is not how we expect the global economy to get back to normal but how we envision it getting to its next normal. And the proof is in the payments.
