Coronavirus could boost use of contactless payments over cash

0

Americans have started to reconsider the money they handle every day as the coronavirus spreads.

Some experts have said COVID-19 could cling to currency the same way it is able to survive on other surfaces, such as doorknobs and handrails.

Credit cards, on the other hand, may not be much better. Credit cards contain more types of bacteria than even coins or cash, according to a study from CreditCards.com.

For those hesitant to forgo paper money or traditional credit cards, Cyndie Martini, CEO of Member Access Processing, a Visa service aggregator in U.S. credit unions, advises taking extra precautions to avoid spread of germs.

“If you’re going out of your house and you know you’re going to be touching surfaces, maybe now is a good time to wear plastic gloves,” she said.

Among those other steps they are taking to stay safe, Americans may also be finally ready to embrace digital wallets and contactless payments, after years of reluctance.

More from Personal Finance:
How to build an emergency fund
Government wants to send check to millions of Americans
Worried about your access to cash?

Contactless technology allows customers to pay by tapping their card at a point of sale terminal. Cards are a faster alternative to chip and PIN payments and require less physical interaction.

“Using the contactless capability of a credit card can help give consumers more peace of mind,” said Jill Gonzalez, analyst at WalletHub.

According to Martini of Member Access Processing, more consumers can also opt for similar “tap and go” transactions through digital wallets like Apple Pay or Google Pay, to avoid handling cash and credit cards during the outbreak.

In addition, these methods are considered to be much safer.

Contactless cards are integrated with a near-field communication antenna that can be used for proximity payments over radio waves. The card creates a dynamic cryptogram, or code, which is unique for each individual transaction.

Digital wallets use authentication, monitoring, and data encryption to secure your personal information.

Yet digital purchases only make up about a quarter of all transactions, according to Pulse’s latest debit survey.

What’s more, it’s estimated that only 3% of cards in the United States are contactless, according to a 2018 study released by consulting firm AT Kearney. This compares to around 64% in the UK and 96% in South Korea. (Consumers abroad are increasingly adopting contactless payments.)

“In the United States, an event like this is likely to trigger this inflection point, in terms of growth,” said Vaduvur Bharghavan, CEO of Ondot, a card services platform digital for credit and debit issuers.

It starts with a net, then you have an avalanche.

Vaduvur Bharghavan

CEO of Ondot

“It starts with a net, then you have an avalanche,” he said.

Although mobile payments and digital banking products are on the rise, around 7% of U.S. households, or 8.4 million, are still unbanked, which means no one in the household has a checking account or bank account. savings, according to a 2017 survey by the Federal Deposit Insurance Corporation.

19% are underbanked, which means they have a bank account but still rely on financial products such as payday loans.

Subscribe to CNBC on YouTube.


Source link

Share.

Comments are closed.