ABI Research is predicting that COVID-19 will accelerate the adoption of contactless payment cards. The firm now believes the number of cards issued in 2020 will exceed initial estimates by more than 110 million cards, a figure that will bring the total number of contactless payment cards in circulation to more than 2 billion internationally.
According to ABI, more than 65 percent of the payment cards issued in 2020 will have contactless capabilities. Overall contactless adoption rates will be between six and eight percent higher than the firm’s original projections.
Much of that growth can be attributed directly to COVID-19. The coronavirus has generated more interest in contactless solutions, which are more sanitary than cash and mitigate the need to make physical contact with shared devices like payment terminals. Payment providers like Mastercard are working with governments and banks to raise the spending cap for contactless transactions, while brick-and-mortar establishments like grocery stores are adopting social distancing protocols and encouraging people to pay with contactless methods.
“Contactless payments have a critical role to play in the fight against COVID-19, from a hygiene, health, and safety perspective,” said ABI Research Director Phil Sealy.
“Although the trend was in place prior, COVID-19 will further increase the speed of contactless adoption, particularly within countries and economies where cash remains king.”
The ABI figures include all contactless payment cards. However, the firm indicated that COVID-19 should provide a similar boost to biometric payment cards, which are finally starting to reach the commercialization phase. Biometric payment cards will make it safer to introduce higher payment caps, which will in turn improve the convenience and utility of contactless payments.
“COVID-19 is bringing next-generation payment card form factors,” concluded Sealy. “As consumers use and become more reliant on contactless, the question of how best to secure and limit fraud on increasing transaction volumes and values will come into play.”