The reason most customers are now afraid of cash and credit cards is that the Covid-19 pandemic is likely to spread through everyday contact surfaces.
According to the latest statistics from credit card company Mastercard, contactless payments globally have increased by more than 40% in the first quarter of 2020. Contactless payments including touch to pay and pay by mobile.
It is not surprising that the fact is that Q1 / 2020 is the worst quarter of humanity when the Covid-19 pandemic broke out, causing all social habits and order to be reversed.
Mastercard’s CEO, Ajay Banga, said the trend of airless payment has become more common when consumers want to find the fastest way to pay for purchases without having to exchange cash, touch the terminals or anything else to avoid the risk of Covid-19 infection.
Banga also said that this trend will likely continue after the epidemic ends.
Earlier, the World Health Organization (WHO) dismissed claims that the agency had warned people not to use cash during an epidemic. But despite these warnings, the psychological element of fear of getting infected through cash still exists in many people’s minds. Because of that, it has made a change in the shopping and payment habits of consumers.
According to management consulting firm Bain & Company, the rate of mobile payments in the US was always lower than about 10% before the outbreak of Covid-19. The reason for this is the American people’s habit of using cash and reward cards that make them reluctant to use their phones for payment. In China, by contrast, more than 80% of consumers have switched to mobile payments since last year.
Mastercard also highlighted the sharp increase in online payment transactions due to blockades in many cities around the world. Such online payment transactions have increased by 40% over the same period last year.
Meanwhile, direct transactions either via credit or domestic debit cards have dropped sharply. Banga said that the pace of consumer spending slows is currently in a stable phase in most markets. With the current situation, experts said, the level of spending reduction will soon hit the bottom before recovering after the epidemic is over.
Mastercard’s profit for the first quarter fell, but revenue of $ 4.01 billion and profit of $ 1.68 per share of Mastercard were still much better than Wall Street experts had predicted.