3 Ways Digital Payments Have Changed in the Wake of COVID-19
As we continue to live in the wake of the COVID-19 outbreak, our day-to-day lives have rapidly and significantly changed. From contactless delivery to contactless payments, there are a number of changes we have all learned to endure. As the pandemic continues, the World Health Organization (WHO) highly encourages retailers and consumers to use digital payments as much as possible to prevent the spread of the virus. While the coronavirus isn’t directly linked to cash handling, the WHO suggests that digital payments can reduce the risk of spreading the highly contagious virus. Since this has become our new way of life, how have digital payments changed to protect retailers and consumers?
The Spread of the Virus
Understanding how the coronavirus can spread from person to person has been essential to business owners. It has helped many to run their businesses and make proper actions to keep employees and customers protected. The primary way to spread COVID-19 is through respiratory droplets that are released into the air when coughing or sneezing. However, experts suggest the virus can potentially live on surfaces such as coins and paper money, as well as the surface of debit and credit cards.
Though the risk of spreading the virus in this way is very low, shifting to digital payments is just one step retailers can take to protect their customers and employees from spreading COVID-19.
Imagine de Gerd Altmann de la Pixabay
The Digital Payments Alternative
While mobile wallets and contactless payments have already made their way into our everyday transactions, the coronavirus has made these methods much more prevalent for retailers and customers alike. A recent study found that 45% of consumers have turned to mobile wallet platforms to complete transactions in the last 30 days. Another 45% of respondents said they have changed the way they interact with their bank. In some cases, retailers are adding ACH payment processing to their scheduled payments, limiting the amount of contact their employees have with their customers altogether.
Mobile Wallets
Prior to coronavirus, the usage of mobile wallets has rapidly accelerated and premier platforms, such as Apple Pay, are growing in popularity. However, in the wake of coronavirus, several more users are adopting this form of payment as a cleaner, more sterile way of making transactions with friends, family, or retailers. Before the outbreak, it was reported that mobile wallets were not as prevalent as other forms of digital payments. In fact, they took a spot behind traditional payment methods such as credit cards, cash, and bank or debit cards. In 2018 a study showed that 80% of transactions made in the U.S. were on a credit card, making that the leading form of payment pre-coronavirus.
Some of the most common mobile wallets are:
- Venmo: A mobile wallet that makes P2P transactions between friends and family easier. From splitting bills to pay friends back, funds on Venmo can be transferred instantly.
- PayPal: A worldwide payment system that serves as an electronic feature for checks and money orders.
- Apple Pay: An online wallet that allows Apple users to make payments online and to other Apple users. Users can make payments to each other with the click of a button.
Mobile wallets are a fast, convenient, and secure method to making online purchases without typing in debit or credit card information. Additionally, more and more users have turned to mobile wallets to send and receive payments from friends, family, or coworkers. Today, retailers are widely continuing to accept mobile wallets as a form of payment, making it convenient for mobile wallet users to make purchases and avoid hardware where germs may lie.
Virtual Terminals
As retailers and restaurants continue to reopen, the need for contactless payments still exist. Online virtual terminals have made card-not-present transactions possible, allowing for safe payment methods for customers and protection for employees. A virtual terminal can help businesses accept a payment without coming into contact with customer cards. Virtual terminals are an affordable option for businesses to accept payments on the phone for curbside pickup, at the time of delivery, online when an order is placed, or over the phone. This form of payment continues to minimize interactions between employees and customers, and yet remain a very secure solution for the business and cardholders alike.
When a business chooses a virtual terminal to accept card payments, they are responsible for safeguarding customer information. The payment system is often set up by a merchant service provider and provides a safe secure payment solution.
Online Installment Payments
Many consumers are turning to “buy now, pay later” options while making online purchases. Whether they are purchasing new clothes or luxury goods, this is a choice for those who have become financially impacted by COVID-19. Primarily used by younger demographics before the virus outbreak, usage of installment payments from places such as Klarma and Afterpay have recently surged, allowing consumers to break up payments on pricey items and have a budget-friendly option in making large purchases.
Instead of a heavy reliance on credit cards for a splurge purchase, consumers are now simply utilizing this digital payment trend.
The Future of Digital Payments
From stay-at-home orders and working from home to an increase of online purchases, the pandemic continues to shape our everyday lives personally, professionally, and even financially. There has been a rise in digital payments and the increase in this payment method will continue to grow as the pandemic shifts consumer habits. Businesses are adopting forms of digital payments and contactless payments to combat the spread of COVID-19.
Conclusion
As we continue to live in the midst of the COVID-19 outbreak, digital payment options have become increasingly popular and a prominent part of our day-to-day lives. Mobile wallets, such as Venmo and PayPal, have made transactions between friends and family faster, safer, and convenient. Likewise, virtual terminals are limiting contact between employees and consumers by allowing payments to be accepted online or over the phone. In these ways, digital payments are rapidly changing the way we approach payments. Online payments are growing in popularity, changing the way we bank, purchase goods, and even break up payments on large purchases. Whether retailers only accept electronic payments or it’s your preferred way of safely making transactions, digital payments will quickly evolve into one of the primary ways we make purchases post-pandemic.
Author: Emily Lehmann
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