Digital acceleration

Digital payments enable consumers to make purchases online and face to face, to pay for goods, services and utilities, in a fast and secure way. While the global payments industry has been driving the adoption of cashless transactions for some time, COVID-19 has now accelerated consumer demand for contactless digital payments.

Social distancing is facilitating the global surge in e-commerce, where local lockdowns and restrictions prevent consumers from shopping in store. Where consumers can pay in person, contactless digital payments, either in the form of cards or e-wallets, are now the recommended safe and hygienic payment method to avoid the spread of the virus.

To support this recommendation, an increase to the contactless limit in Europe was launched in April, with many countries increasing from € 25/30 to € 50, and from £30 to £45 in the UK and CHF 40 to CHF 80 in Switzerland. With more than 30 countries adopting the change, this is set to boost in-store contactless acceptance even further.  

Confidence in contactless

In an effort to encourage consumers back to shops and hospitality venues after the lockdown period, many countries implemented new initiatives to boost spending. In the UK, the ‘Eat Out to Help Out’ initiative which ran in August, showed promising recovery in the Hospitality sector with 100 million meals being claimed on the scheme. This has helped businesses kick-start revenue growth and customer loyalty.

Moreover it has shown an increased confidence in consumers to want to pay by contactless. Transaction Data from UK quick service restaurant (QSR) merchants, who participated in the scheme, shows a 71% increase in the contactless payment method from August 2019 to August 2020. [1] And the picture looks the same across Europe. When looking at what percentage of cashless payments were made using contactless methods, data shows nearly a 20% increase since August 2019, with consumers shifting to this method in coffee shops and fast food outlets. [2]

The trend also continues across the European Hotel and Fine Dining sector, with a staggering 200% increase in contactless payments being made in 2020 when comparing with 2019. [3] By comparison, QSR, although still increasing contactless adoption in 2020, already had 90% of payments made by this method in 2019 [4] due to the fast turnaround environment and lower average transaction values. The huge increase from the hotel sector therefore demonstrates a significant payment behaviour change. The increased use of high value contactless on smart devices, and hotels reopening with a clear message to move towards touchless hygienic practices, ensures these payment behaviours are a permanent change in hotels that will continue to grow.

With contactless now the go-to payment method for a safe experience, and with the spending limit increased, are there any other reasons for consumers not to get on board with contactless?

Adapt and Innovate

Consumers need flexible payment options. For merchants, extending many different payment options that cater to different consumer groups can drive revenue and increase brand loyalty. While COVID-19 has created tough global trading conditions and many challenges for consumers, it has also created a new age of innovation.

UK businesses such as Checkfer offer digital order and pay solutions from a smartphone which are already proving successful across hundreds of pubs and restaurants. While wi-Q is working in the hotel space to offer a branded web page for guests to conveniently order goods and services from the comfort of their hotel room. These solutions, plus countless other emerging in the market today, meet social distancing rules and give consumers the confidence to spend freely. 

Digital Evolution

Digital adoption will only continue, so the time is now for merchants to get ahead of the curve. Much of the changes we’ve seen are here to stay, as consumers recognise the advantages of digital payments, mobile wallets, ecommerce and in-app services. And looking to the US payments industry, this now seems ripe for change as well. According to a recent research study, the US Retail sector has already seen significant increases in mobile payments and contactless card payments in the last few months. No-touch payments have increased for 69% of retailers surveyed, with 94% of those retailer expecting the increase to continue over the next 18 months. [5] It can only be a matter of time before these increases are seen across other sectors including US Hospitality. As merchants across all industries think about their brand and payment strategies, it is important to look at changes in consumer behaviour, and learn how to adapt and evolve the consumer journey.

Planet delivers all hospitality payments services, including acquiring, acceptance, processing, reporting, insight and next-generation devices through one provider. Hotels and Restaurants benefit from a cost effective payment partnership with solutions that offer a safe, digital payment experience when demand for cashless payments are at an all-time high.

For more information about Planet’s revenue generating payment services, please get in touch.