If you have been vacationing in Antarctica for the past month, you may be surprised to hear that the world is on its head with Coronavirus concerns. Fear and concern have engulfed the planet as the virus infection continues to grow. Shares of companies that make face masks, alcohol-based hand sanitizers and disinfecting solutions have spiked as demand exceeds supply… big time.
The Coronavirus hysteria has also impacted the world populations’ behavior. Globally, people are staying home, averting crowds, and avoiding non-essential travel. And more so, Corona means minimum physical contact of any kind.
Our present monetary payment system is split into two predominant approaches – contact-based (cash, credit card, ATMs, etc.) and contactless (touch, swipe, etc.). In recent years, contactless and cashless payments have gained momentum. However, in many parts of the world cash and credit card still prevail.
Will that now change? Will the Coronavirus help shift consumers to contactless? I say yes.
A recent Cards.com and the University of Texas study found that credit cards were laced with more different types of bacteria than cash and coins. The study noted that some of the worst bacteria found were on the surface of the credit cards.
With present hypersensitivity to hygiene, its only time that the bacteria overloaded contact-based payments will be impacted. In a panic frenzy world, the fact that credit cards, payment tablets, and ATM keypads carry bacteria that can cause serious illnesses, will most probably impact how people will transact.
This is where contactless and cashless payments come in.
Cashless/contactless payment technology has reduced the need for store clerks to touch consumers’ cards. In addition, as a result of the Coronavirus outbreak, more consumers are ordering and paying for goods and services using mobile. As the Chinese government home quarantined over 60 million people in Hubei province, the businesses that have prospered from the outbreak are online food delivery companies. Contactless lockers are being installed in throughout Hubei, so food can be left securely by delivery riders and unlocked using a QR code.
Historically, the Coronavirus era of 2020 may be perceived as a turning-point that accelerated the viability of contactless payments. Contactless payments may be a thing of the future, but the future is happening now.
However, it’s not all blue skies. The anticipated adoption of contactless payments will undoubtedly bring with it an increase in fraud. Presently fraudsters are bypassing cardholder’s verification limits for contactless payment cards, such as the £30 payment limit in the UK. What does that mean about the future?
A recent example of the £30 contactless limit fraud occurred to a West London resident, who had his wallet pickpocketed while out drinking with friends. As soon as he realized that his card had vanished, he contacted his bank to cancel his three stolen contactless cards.
When he checked his accounts online the next day, he found that the thief had been on a hasty spending spree with his credit cards. The thief carried-out 13 transactions in 75 minutes at various shops, many of them for precisely the maximum £30 spending limit.
There is no doubt that the convenience of contactless payments adds a security risk. From a merchants/bank perspective, the new wave of contactless payment fraud will certainly mean that some transactions will be blocked in a fraud crackdown.
The implications of the Coronavirus outbreak to global the economy is still unclear. But one thing that is for certain, global social conduct is changing as a result of the infection. Vendors that support contactless and cashless payments, while at the same time provide fraud prevention and frictionless authentication (such as Paygilant), will benefit.