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POS CHANGES!!!!!! COVID-19 Is Changing Consumer Behavior At The Point-Of-Sale


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COVID-19 Is Changing Consumer Behavior At The Point-Of-Sale

As shelter-in-place orders spread across the US in mid-March, cash was already coming under fire as a potential vehicle for spreading COVID-19. Media articles and nightly news reports quickly began targeting the unsanitary aspects of physical currency, and many merchants started affixing signs to their storefronts or checkouts encouraging the use of cards, and in some cases outright banning cash. 

These developments, paired with growing concerns about physical contact and contagions, have helped drive a noticeable decline in cash utilization, according to a Q3 2020 US consumer survey fielded by 451 Research, which is part of S&P Global Market Intelligence. The survey revealed that more than two in five consumers are using cash less often since the COVID-19 outbreak started. The decline is strongest for respondents with a household income above $150,000 and those belonging to Gen X (38-53 years old), where 64% and 54% have decreased their usage, respectively.

Cash use has suffered as consumers have consciously and subconsciously looked to adhere to three key priorities while in-store:

Limit what they're coming into contact with (e.g., point of sale terminals, cash).

Minimize time spent in close proximity to other people (e.g., cashiers).

Avoid events that increase overall shopping time (e.g., lines, making change).

Contactless payments help address each of these concerns at checkout by enabling a more efficient and hygienic payment experience. This is important because, at least in the US, contactless has long been characterized as a solution in search of a problem.

Contactless payment adoption and usage is increasing

451’s survey has revealed two key contactless trends that have emerged from the pandemic. The first is new user activation. Many consumers that never saw a reason to use contactless before tried it for the first time, presumably given the hygienic and social-distancing benefits of tap-to-pay. More than one in six respondents to our survey made their first ever contactless transaction during the pandemic. Net-new contactless adoption was highest for Gen Z (25%) and Millennials (23%), but even one in 10 Baby Boomers made their first ever contactless payment this year.

The second trend is increased utilization. Nearly one in three (29%) consumers said they increased their usage of contactless payments during the pandemic, with Millennials (40%) and Gen X (39%) recording the biggest usage gains.

The accelerated trend toward contactless payments is important for card networks and card issuers because, quite bluntly, contactless payment users are more valuable. Visa V -1%, for instance, sees an average of a 20% lift in volume for cardholders after they make their first contactless purchase. This occurs as cardholders begin to use their card (primarily debit) in place of cash, especially for sub-$25 transactions where cash (and contactless) use is strongest.

A burning question that we've been getting from clients is whether consumers will continue making contactless payments after the pandemic retreats. Our survey indicated that – overwhelmingly – yes, cardholders that tried contactless for the first time will look to continue that behavior moving forward. In fact, 86% of first-time contactless users plan to continue making contactless payments. This points to the potential for ongoing cash displacement. It also underscores the increasing importance of contactless as a top-of-wallet factor and volume driver for card issuers.

1st time contactless payment users are likely to[+]451 RESEARCH, PART OF S&P GLOBAL MARKET INTELLIGENCE

The Upshot

While some cash usage has simply evaporated due to decreased consumer spending, sufficient evidence indicates that the pandemic has played a role in cash-to-card conversion. Contactless has long been a key driver of cash displacement, and arguably even more so since the onset of COVID-19. To capture more card volume, issuing banks should consider tactical reissuance of contactless cards while widely promoting the hygienic benefits of cashless payments to their cardholders. Card issuers that have not begun contactless issuance or do not yet support digital wallets must recognize that contactless is quickly becoming a top-of-wallet factor in the US. Without a contactless strategy in place, banks that haven't acted risk cardholders swapping for cards from other issuers that are enabled for tap-to-pay.

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Last week I was in Philly. A couple of years ago the city passed a law forcing businesses to except cash. The idea was to make sure the unbanked were not excluded from buying overpriced salads, coffee, and tacos, etc. Many businesses had upgraded their POS terminals to accept contactless.

 

Last week a few places I went to had signs up stating credit and debit cards only. Not sure if the city has made an exception under the current situation, or the businesses were saying screw you to the city and unbanked.

 

 

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The only truly contactless payment option I have is BPme, and of the two times I've attempted to use it, it's worked once.*

 

Everything else requires me to make contact between something I carry with me and a payment terminal.

 

 

 

 

* Once the Amex offers ($10 back on $25) are used up, I'm deleting the app.

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13 hours ago, knot12gossip said:

COVID-19 Is Changing Consumer Behavior At The Point-Of-Sale

As shelter-in-place orders spread across the US in mid-March, cash was already coming under fire as a potential vehicle for spreading COVID-19. Media articles and nightly news reports quickly began targeting the unsanitary aspects of physical currency, and many merchants started affixing signs to their storefronts or checkouts encouraging the use of cards, and in some cases outright banning cash. 

These developments, paired with growing concerns about physical contact and contagions, have helped drive a noticeable decline in cash utilization, according to a Q3 2020 US consumer survey fielded by 451 Research, which is part of S&P Global Market Intelligence. The survey revealed that more than two in five consumers are using cash less often since the COVID-19 outbreak started. The decline is strongest for respondents with a household income above $150,000 and those belonging to Gen X (38-53 years old), where 64% and 54% have decreased their usage, respectively.

Cash use has suffered as consumers have consciously and subconsciously looked to adhere to three key priorities while in-store:

Limit what they're coming into contact with (e.g., point of sale terminals, cash).

Minimize time spent in close proximity to other people (e.g., cashiers).

Avoid events that increase overall shopping time (e.g., lines, making change).

Contactless payments help address each of these concerns at checkout by enabling a more efficient and hygienic payment experience. This is important because, at least in the US, contactless has long been characterized as a solution in search of a problem.

Contactless payment adoption and usage is increasing

451’s survey has revealed two key contactless trends that have emerged from the pandemic. The first is new user activation. Many consumers that never saw a reason to use contactless before tried it for the first time, presumably given the hygienic and social-distancing benefits of tap-to-pay. More than one in six respondents to our survey made their first ever contactless transaction during the pandemic. Net-new contactless adoption was highest for Gen Z (25%) and Millennials (23%), but even one in 10 Baby Boomers made their first ever contactless payment this year.

The second trend is increased utilization. Nearly one in three (29%) consumers said they increased their usage of contactless payments during the pandemic, with Millennials (40%) and Gen X (39%) recording the biggest usage gains.

The accelerated trend toward contactless payments is important for card networks and card issuers because, quite bluntly, contactless payment users are more valuable. Visa V -1%, for instance, sees an average of a 20% lift in volume for cardholders after they make their first contactless purchase. This occurs as cardholders begin to use their card (primarily debit) in place of cash, especially for sub-$25 transactions where cash (and contactless) use is strongest.

A burning question that we've been getting from clients is whether consumers will continue making contactless payments after the pandemic retreats. Our survey indicated that – overwhelmingly – yes, cardholders that tried contactless for the first time will look to continue that behavior moving forward. In fact, 86% of first-time contactless users plan to continue making contactless payments. This points to the potential for ongoing cash displacement. It also underscores the increasing importance of contactless as a top-of-wallet factor and volume driver for card issuers.

1st time contactless payment users are likely to[+]451 RESEARCH, PART OF S&P GLOBAL MARKET INTELLIGENCE

The Upshot

While some cash usage has simply evaporated due to decreased consumer spending, sufficient evidence indicates that the pandemic has played a role in cash-to-card conversion. Contactless has long been a key driver of cash displacement, and arguably even more so since the onset of COVID-19. To capture more card volume, issuing banks should consider tactical reissuance of contactless cards while widely promoting the hygienic benefits of cashless payments to their cardholders. Card issuers that have not begun contactless issuance or do not yet support digital wallets must recognize that contactless is quickly becoming a top-of-wallet factor in the US. Without a contactless strategy in place, banks that haven't acted risk cardholders swapping for cards from other issuers that are enabled for tap-to-pay.
 

I guess you don't beleive in copyright. SAD!

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I guess you don't beleive in copyright. SAD!
I do. It was provided in the link you provided for anyone that wanted to see.

I don't like getting a notification for a post only to go to that post and realize that I have to click another link to read the actual article then come back to the post to comment.

It's a courtesy that the OP should do if their posting the story. The link can still be provided for reference/copyright etc., but having the article in the thread is better for everyone and encourages more response, activity and traffic.



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4 hours ago, knot12gossip said:

I do. It was provided in the link you provided for anyone that wanted to see.

I don't like getting a notification for a post only to go to that post and realize that I have to click another link to read the actual article then come back to the post to comment.

It's a courtesy that the OP should do if their posting the story. The link can still be provided for reference/copyright etc., but having the article in the thread is better for everyone and encourages more response, activity and traffic.


 

 

that isn't how intellectual property works.

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13 hours ago, cv91915 said:

The only truly contactless payment option I have is BPme, and of the two times I've attempted to use it, it's worked once.*

 

Everything else requires me to make contact between something I carry with me and a payment terminal.

 

 

 

 

* Once the Amex offers ($10 back on $25) are used up, I'm deleting the app.

Well, not every terminal accepts it of course, but the ones that offer a tap don't actually require me to really tap the card, but just hover the card closely. Like an overprotective parent. Super close but not touching.

 

I think this is a gimmick. I feel I'd rather shove my chip in the slot, but I guess that's just me. That way there's no question I made a transaction when my chip goes in, rather than just hovers over a target. 

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9 hours ago, hegemony said:

 

that isn't how intellectual property works.


@hegemony, I regret I have to call you out on this, buddy, but you missed the mark on this one.  There are two versions of how IP works:

 

1.  For people with an IQ < 4 ; and

2.  Another for the rest of us.  
 

Don't get me wrong.  I'd love it of you could just post all your articles here, especially those with a paywall, instead of having to click on an annoying link, but I've resigned myself to the unfortunate fact that it's simply not nice to be a thief (BTW, that includes porch pirates).  

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4 hours ago, swimmingwithsharks said:

 Well, not every terminal accepts it of course, but the ones that offer a tap don't actually require me to really tap the card, but just hover the card closely. Like an overprotective parent. Super close but not touching.

 

I think this is a gimmick. I feel I'd rather shove my chip in the slot, but I guess that's just me. That way there's no question I made a transaction when my chip goes in, rather than just hovers over a target


It sounds suspiciously like you are writing in code. ;)

 

Do you write for www.lasvegas.porn ???

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13 hours ago, swimmingwithsharks said:

Well, not every terminal accepts it of course, but the ones that offer a tap don't actually require me to really tap the card, but just hover the card closely. Like an overprotective parent. Super close but not touching.

 

I think this is a gimmick. I feel I'd rather shove my chip in the slot, but I guess that's just me. That way there's no question I made a transaction when my chip goes in, rather than just hovers over a target. 

Contactless payments from Mastercard...

 

Just Tap and Go®

 

:lol: 

 

JcbWP5I.png 

 

https://www.mastercard.us/en-us/personal/ways-to-pay/contactless.html  

Edited by cv91915
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  • 4 weeks later...
On 10/14/2020 at 5:26 AM, cv91915 said:

The only truly contactless payment option I have is BPme, and of the two times I've attempted to use it, it's worked once.*

 

Everything else requires me to make contact between something I carry with me and a payment terminal.

 

 

 

 

* Once the Amex offers ($10 back on $25) are used up, I'm deleting the app.

I used the last of the BPme offers yesterday.

 

After several futile attempts to pay with my phone I had to kill and restart the app in order to get it the payment to process, at which point the app displayed a message admonishing me to leave my phone in the car for "safety." 

 

By this point I was already standing outside because I was getting warm sitting inside the car trying to get the #%^&# app to work.  

 

I'm still not sure why BP would consider my actions to be careless.  People carry and use phones outdoors all the time.

 

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1 hour ago, cv91915 said:

Let me guess...  you have an RFID-blocking wallet too.


Well, if it can keep porch pirates at bay, it may just be a good idea.

 

I bet you don't like contactless payments at the gas pump because it cuts into your skimming operations.  Since porch surfing is becoming more difficult, you need to make up for that lost revenue. ;)

 

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9 hours ago, PotO said:


Room with lead walls = prison cell.

 

Got busted for porch surfing???

Most prison walls in the States will be cinder-block or other concrete pre-fab (if constructed post-1990'ish).

 

Lead is far too soft for protective environments...just sayin' 

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On 11/12/2020 at 2:02 AM, PotO said:


Me too.

 

Not because I specifically sought one out, mind you, but just that the one I liked happened to have RFID-blocking incorporated.  

Same here. I'm not sure you can but a passport holder that isn't RFID shielded anymore. Most wallets are too these days. I wanted to try one of those micro wallets. Had it now for several years, and I love it. I don't think I will ever go back to the traditional leather bifold or trifold models.

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