Contactless Is Gaining Favor Fast Among Consumers And Merchants, AmEx Data Show

Consumer demand is so strong that 81% of merchants surveyed by American Express Co. intend to make contactless payments a permanent option at the point of sale.

Some 70% of merchants say their customers have asked for contactless payments, J.J. Kieley, vice president of the AmEx Payments Consulting Group, tells Digital Transactions News. His group works with merchants on new products and helps them with processing their AmEx transactions. Most merchants—73%—prefer their customers to pay with a card or mobile app instead of having to handle cash.

That’s in contrast to how contactless adoption was faring in 2019 and prior to the pandemic earlier this year. On the merchant side, it was part of the normal terminal replacement process, Kieley says. Though the POS terminal was contactless-enabled, the near-field communication technology was not activated in many cases. Indeed, some merchants Kieley’s group talked with last year didn’t even realize they could accept contactless payments. In these cases, his group would try to explain the benefits of NFC payment technology.

Now, though, Covid-19 and the precautions to avoid contracting it have provided a big push. “The sense of urgency has really picked up with Covid,” Kieley says. The AmEx survey, of 400 business executives conducted in the first week of August, found that 52% accepted contactless payments prior to Covid and 32% recently adopted or plan to adopt the technology because of the disease’s impact.

Kieley says little has stood in the way of them adopting contactless payments. Since the 2015 shift to EMV in the United States, most POS terminals have shipped with NFC technology. Now, many merchants want to activate the tap-and-pay technology. Terminal certification has not proved to be a problem, at least in Kieley’s experience. Certification created a bottleneck early on when so many devices hit the market at one time. 

Merchants also view contactless payments as contributing to improving health and safety, with 80% of them saying contactless keeps the checkout area cleaner and safer. 

The survey found that 57% of merchants accept card payments without a signature or PIN. A further 28%, since the outbreak, have adopted or plan to adopt no-signature or no-PIN payments. Additionally, 15% of merchants that require signature or PIN will discontinue the practice because of Covid. AmEx hasn’t required signatures since 2018.

A big question, however, is whether this behavior will stick. The card networks have promoted contactless payments for years, touting its functionality especially for transit and quick-serve restaurants applications. “I don’t see why it wouldn’t stick,” Kieley says. “All of us have changed how we live in this environment.” As consumers try contactless payments, they’ll see the benefits and their behavior will change. “There are benefits beyond the payment,” he adds.