Intive Blog

New forms of payment in a contactless world

The impact of the coronavirus pandemic is changing our lives dramatically, including the way we make payments. Preventing infections and social distancing are the new norm, which makes people use less cash and opt for digital, contactless payment methods. This constitutes a turning point for the Fintech industry, but it’s also a big step towards a world without cash.

Contactless Payment: The Moment is Now

Since coronavirus is highly contagious, more people have chosen contactless payment methods that allow for less interaction: clients can simply draw their smartphones near a card reader to carry out the transaction.

Digital wallets provide encryption, are safe and agile: transactions are made in just a few seconds. According to a report from Link Network, the use of the Mercado Pago payment platform increased 200% in the first two months of lockdown, and so have other digital payment methods, such as mobile banking (16.9%), other mobile apps (20.9%) and online payment of taxes and services (6.3%).

The next stage is a rise in payments with NFC (Near Field Communication) technology, which has been used around the world for a couple of years, but has now been quickly adopted due to the pandemic. In Argentina, there are more than 500,000 shops with NFC-enabled terminals, and the numbers are expected to increase in the following months. NFC technology allows clients to make a payment by drawing their mobile near the reader, provided that the cellphone is on. You don’t need to sign in any platform or app: once the payment is received, the clients gets a notification and an email with the transaction data. This is the technology used by the SUBE travelcard in Buenos Aires.

Retailers increasing development of NFC technology is also expected to transform POSs. According to a research by Berg Insight, more than 88% of POS terminals will accept NFC by 2024, in order for consumers to make use of the most comfortable and safest payment methods wherever they go.

From Credit Cards to Codes: Payment Methods with One Click

The lockdown also stresses the need to process the payments of all those people who are now buying remotely more than ever. Since e-commerce rocketed, retailers need to make sure their processes are fast and safe, the same that would normally happen in the physical POS. And it is here that coding plays a significant part.

Alexis Zuckerman, Business Development Manager at intive, explains:

There are apps which have been on the market for quite some time and which were created to handle money, and the creating companies have been studying their clients’ profile for a while. These companies increased consumer loyalty by understanding their needs, so that clients could carry out as many operations as possible in the comfort of their app, without having to queue for hours or follow the timetable of the shops nearby, especially to pay their bills and services, or to top up their travelcard or their cellphone credit.

Replacing physical credit cards with a token is one of the most effective ways to protect user data. What’s more, it allows companies to offer frictionless payment flows and better the user experience.

The use of tokens is especially useful for shops that accept recurrent payments and offer purchases with only one click. It’s not surprising that more and more platforms are adopting this approach, especially in Europe.

Another option for fast payment is the use of a QR code, which is now trending in Argentina thanks to Mercado Pago. QR codes are a modern version of bar codes, which allow for contactless payments and are ideal for the situation we’re currently going through. According to Juniper Research analyst house, this payment method will increase 300% in the next five years. QR technology works together with virtual wallets (in Argentina, TodoPago, Mercado Pago, Naranja X) and both big retailers and small local shops use it, with the opportunity to keep on growing.  According to Alexis: “Thanks to QR payments, both clients and shops are faster in terms or purchasing and paying, and amidst the current global crisis, they have become very useful to avoid interaction.”

Facing the Crisis

With contactless technologies continuously improving, more shops and consumers are adopting new payment methods in an effort to avoid contact due to coronavirus. It’s highly likely that the impact of the current situation will go beyond affecting the behavior and the expectations of consumers: it will also affect the structure of the global economy.

Contactless solutions not only reduce pollution, they also offer great benefits, since payments are much faster, safer and more transparent than before.


Constanza Molinari

Constanza Molinari is Content Analyst at intive since January 2020. Graduated in Advertising from Salvador University, she also has knowledge in visual thinking and graphic facilitation. Her passions are drawing, playing the piano and roller skating.

Add comment