Contactless payments have continued their pandemic surge, according to a report from the U.S. Payments Forum. The group’s latest market snapshot also outlined in-person spending habits after lockdowns, EMV implementation in the petroleum industry, how the payment industry is responding to the chip supply shortage and current Payment Forum priorities and projects.
There was unanimous agreement that strong growth in contactless payments seen during the pandemic is not slowing down post-Covid-19. Visa reported in Q1 of fiscal year 2021 that tap-to-pay was continuing to expand, representing almost two-thirds of all face-to-face transactions globally, excluding the U.S. In Q3 FY 2021, Visa stated that the U.S. had surpassed 370 million tap-to-pay-enabled cards, and the country now has three cities above 25 percent face-to-face, tap-to-pay penetration: New York, San Francisco and San Jose.
In June, Mastercard saw year-over-year spending growth of 55 percent in restaurants, 67 percent in department stores and 63 percent in apparel. In the United States, Visa reported that travel was approaching 2019 levels in July, entertainment surpassed 2019 levels in May and restaurant spending in Q3 2021 was more than 20 percent above 2019 levels. American Express predicts global travel spending could return to 80 percent of pre-pandemic levels by the end of the year, and the U.S. will likely see a full consumer recovery in the travel sector in that same time frame.
To help navigate through the challenge of increased contactless payments, Forum members are banding together to develop recommendations and best practices for all the stakeholders in the payments industry. A panel that included payment networks and semiconductor, chip card and terminal technology providers provided several recommendations on managing card and terminal supplies in the next months:
- Keep an open line of communication with vendors and provide accurate, long-range forecasts
- Consider diversifying suppliers, keeping in mind how long it takes to on-board card providers
- For contact-only products, consider migrating to dual interface chips, which are more likely to be available as foundries optimize production around larger, more profitable products
- Avoid marketing programs or new branding initiatives that require reissuance