Just tap and pay. A few seconds is all it takes to use a contactless card and make your in-store purchase. Whether you use a prepaid, credit, debit card or mobile device to tap, contactless payments save you from swiping and typing a PIN.
A global study conducted by Mastercard last year found that 79% of consumers worldwide frequently use contactless cards, and 74% of people claim they will continue using them in the future. Digital payments are here to stay, including the following trends seen in Canada right now.
Use of Mobile Wallets
Although mobile wallet usage hasn’t surpassed contactless cards yet, mobile payments are gaining popularity. Over this past year, 40% of Canadians used mobile wallets more often than before the pandemic because of added convenience and safety. Apple Pay and Google Pay increased their market penetration, too, showing the continued growth of device payments.
As the demand for mobile wallets grows, brands will need to upgrade their loyalty and engagement strategy, offering more features that integrate into the digital-first lifestyle of most consumers. Flexible features include rewards and bill pay capabilities that consumers can access from the palm of their hand.
Businesses have also adapted to the shift towards device payments. Almost 10% of retailers bought new payment terminals to accept tap and mobile transactions, appealing to a broader range of consumers. Offering tap POS terminals also speeds up the checkout process, making lines shorter and customers happier.
Adoption Among Younger Generations
The millennial and Gen Z cohorts from ages 18 to 34 are the first to use mobile payments and digital wallets regularly compared to older generations. This trend is likely due to a greater awareness of contactless options from the pandemic and the quick adoption of technology among younger generations.
According to Payments Canada, people with higher incomes also commonly use tap and pay to make purchases, and 32% of Canadians used their mobile debit card often in 2021, with most of those consumers falling into a younger age group. As millennials and Gen Z consumers grow older, contactless usage is predicted to grow with them.
New Payment Methods
Supported by the contactless trend, alternative payment methods like QR codes were also introduced. Although the technology wasn’t widely used before, PayPal introduced touch-free QR code payments for small businesses during the pandemic. This gradual adoption proved that new alternatives are bound to emerge in the contactless payment space alongside e-commerce innovations, such as buy-now-pay-later services.
Despite recent events that accelerated the use of contactless cards, they’ve been a viable payment option for many years. From EMV to NFC technology, touch-free payments are a top choice for Canadians that won’t be disappearing any time soon.