Major Brands Lag on Mobile Acceptance Despite a Drive for Contactless, a Study Finds

After the pandemic struck a year ago, stores scrambled to install technology to support a wide range of payment options, including tap-and-pay, to reassure skittish consumers. But now a new report indicates those efforts may not have gone as far as many have assumed, particularly in the area of contactless payments. 

In particular, merchants are lagging with respect to enabling mobile commerce, the study found. Of 100 major merchants evaluated, some 39% did not offer NFC mobile payments via the three major brands, Apple Pay, Google Pay, and Samsung Pay, according to the report, “2020 Merchant Gift Card Omnichannel Evaluation.” Just 4% offered the option to pay for a gift card by scanning a bar code or QR code. Data for the report was gathered by Napco Research for Pleasanton, Calif.-based Blackhawk Network, a major prepaid card provider.

The report evaluated merchants by awarding points across 150 criteria, based on research conducted in-store mid-July to early August and online early October to late November. Target took the top spot with 90% of the possible point total. Express, Ulta Beauty, Barnes & Noble, and Best Buy round out the top five.

“Consumers are increasingly seeking out contactless shopping experiences, and that extends to how they pay for products and services. However, merchants have, to date, been unable or unwilling to keep pace with consumer demand for contactless payments,” the report concludes.

Shoppers “have come to expect to be able to seamlessly shop with brands across in-store and online channels,” said Theresa McEndree, global head of marketing at Blackhawk Network, in a statement. “For retailers, that means offering a frictionless omnichannel shopping experience is no longer a nice-to-have—it’s a must have.”

In its evaluation of physical stores, the report not only found what it calls “slow” adoption of mobile payments, it also lamented “limited staff knowledge” of gift card programs. In the latter category, the merchants evaluated earned an average score of just 35% of possible points. Still, the overall score for gift cards in-store was 62%, higher than 56% for mobile and 50% for e-commerce.

“These numbers shouldn’t come as a surprise. There are not as many barriers to a frictionless purchase experience in-store as there are online,” says the report. It cites such online factors as navigation and checkout as offering possible “barriers” to consumers.