COVID-19, consumers make contactless payment permanent trend

AT: Pam Sherborne

The technology for contactless payment systems has been around for years. In fact, the amusement industry is no stranger to this form of payment.  But a surge in its popularity has been clearly visible in 2020 with the global COVID-19 pandemic resulting in business owners and operators struggling to find a more hygienic means for customers to buy.  

According to research published in December, 2020, by Digipay, a supplier of contactless payment systems located in India, 51% people in the U.S. had resorted to using  mobile wallets like Apple Pay and other tap-to-go credit cards. The report also stated that about 58% of the people in the United States are now more likely to use contactless payment methods than they were before the pandemic.

As contactless payments gain popularity, financial institutions all over the world are increasing their CVM limit to enable customers to successfully make transactions during lockdowns with utmost safety.

In Germany, contactless payments boomed from 35% to more than 50% due to the pandemic, according to the Digipay research. China saw the highest adoption rate where e-wallet purchases were 23% higher than that of the cash purchases.

“Everything is about ‘low-touch’ and contactless,” Embed’s Kathleen Goy said. “In fact, the pandemic has forced the world to enter the ‘low-touch economy.’ Every individual on the planet is more conscious about hygiene than ever before.”

Embed focuses its contactless payment business model on family entertainment centers (FEC) primarily. That company’s research has shown that 82% of people view contactless and low-touch as the safest way to pay. 

“Consumers have peace of mind and feel more secure keeping their mobile phones clean and hands sanitized than trusting a surface area has been cleaned by a business with high foot traffic,” Goy said. “Mobile usage, including payments, is an immutable force around the globe.”

Kiran Karanki at Semnox, located in India, is seeing the surge, too.

“European countries that were adverse to shifting from notes/coins are showing increased interest and we have won a number of projects,” Karanki said. “There is greater awareness, which will increase the adoption of these technologies.” 

Before the global pandemic, Karanki saw that purchasers would cite customers were not comfortable with the shifts.

“But COVID-19 has changed the customer habits/preferences as well as has increased the awareness regarding the contacts and spread of germs via contacts,” he said.

As a result of the spike in contactless pay, certain areas of product development at Semnox had to be ramped up and certain areas de-prioritized. For example, Semnox has seen quite a lot of increase in the adoption of the company’s SmartFun mobile app, which allows most of the functions to be made self-service. Similarly, there is a push to go to technologies that reduce the contact and interactions with the staff at a retail establishment.

Brian Whitney, Appetize, a company based in Atlanta, Georgia, that provides a fully cloud-based point of sale (POS), digital ordering, and enterprise management platform, said contactless payment systems won’t disappear after the pandemic.

 “As we start to enter a post-COVID marketplace, consumers who started using contactless for safety,  now embrace it for the ease and speed,” Whitney said.  “We’re actually seeing customers asking brands to support contactless actively. Furthermore, we recently published a nationwide survey that showed 77% of Americans will prefer contactless payments even after the pandemic ends. It’s here to stay.”

 Even before COVID-19, retailers and customers were beginning to see the advantage of contactless pay. Whitney said his clients had noticed that their customers were more likely to buy an item because it was so easy to  simply hold up their phones to make a purchase. 

Some research has shown customers that continue to have to dig through their pockets or through a bag to find payment were far less likely to do that over and over again.  

Transactions made by conrtactless payment take a shorter amount of time, especially when compared to PIN-based transactions. 

“This keeps people moving through the lines quicker, meaning shorter lines and less line-abandonment,”  Whitney said. 

With social distancing, lines tend to be much longer. A long line may also block   consumer traffic. 

Embed has used feedback surveys to make sure clients’ needs are being met. They have taken feedback from their clients who have purchased their systems, on-site operators who are using them and families who are making the purchases. What they have found is a plethora of positive reactions. 

From the clients using contactless payment systems, Goy said they have appreciated the 100% transparent spend and game data. That data can be used to offer promotions that drive return visits. They also have found a reduced cost of overall operations with no coins, tickets or game cards to process and maintain. 

On-site operators have noted efficiency,  shorter lines at kiosks and an improved traffic flow. Patrons can reload from anywhere, anytime via mobile and no more lost game cards empowering the consumer to keep track of their balance driving return visits.

Parents that have brought their families to the FECs have found peace-of-mind with the systems, because it is low-touch and safe for their children. They also can keep track of the children’s whereabouts. 

An extra community benefit, Goy said, is COVID tracking. If an operator is alerted a patron who visited their business tested positive for COVID, the operator is able to identify what games the patron played at what time, and who played it afterward, for tracking and tracing purposes. 

“This is a very powerful measure intended to keep employees, customers and the community safe,” she said. “And there’s tremendous peace of mind knowing you have that capability at your fingertips.”

Whitney said Appetize has been supporting contactless payment for many years now. In fact, for most of Appetize’s customers, all they had to do was to let them know contactless was an available option.

 “What’s been interesting in the market is that now we are seeing new payment providers entering with a contactless strategy,” Whitney said. “The ability to enter as a payment provider without having to produce and distribute millions of plastic cards, as well as bypass some of the ‘traditional’ credit platform, is bringing new options to consumers.”

In April 2020, despite the ongoing pandemic, Embed implemented Embed’s COVID-19 Relief Act, which offered the company’s latest innovation, the Mobile Wallet, to everyone for free for one year “as a demonstration of our commitment to our industry’s recovery,” Goy said.

“Embed is the only FEC business solutions provider to partner with Google and Apple to gain compliance approval,” she said. 

This made Embed, she said, the only non-banking finance-payment or loyalty card business and brand card that sits in the mobile wallet. 

“There’s no app download required, so guests add the virtual game card to their Mobile Wallet and play,” she said. “To date, we are still receiving enquiries on how they can embark on this contactless journey with Embed.”

In November 2020, Embed gave free Mobile Wallet printed assets to help their customers successfully launch the Mobile Wallet and drive uptake and adoption.

Semnox, primarily, has been focusing on three things regarding the company’s contactless payment system. Those things include the  Luminous Reader,  a new generation Linux-based operating system reader. This gives a number of additional functionalities to enable the contact less payments. 

Semnox’s SmartFun app allows customers to finish their purchases as well as complete the payment via the app itself.  And with the introduction of Semnox’s Kinetick and Komplete Kiosks, Karanki said the number of use cases that the kiosks cater to has increased manifold. 

“We have seen surge in the demand for these products and we continue to invest in building these out,” Karanki said.

In late 2020, Magnetic Cash, a company based in Argentina,  offered the FEC industry interest-free financing on its cashless system. The company’s system is designed and built specifically for the FEC business. The company offered the software with zero per cent interest from six to nine months to help businesses open back up after an extended pandemic lockdown. 

Contactless payment system executives suggest that businesses,  if they aren’t already,  should get ready for the contactless trend.

As more and more companies and consumers increase their usage, so are card brands. 

A story published on in July 2020, stated that, indeed, card brands began noticing even  before the pandemic. According to that July report, Visa Inc. announced that in the last quarter of 2019, 100 million Visa-branded contactless cards were issued in the U.S. with plans to surpass 300 million issued by the end of 2020.  

Goy feels there isn’t a single business that should ignore this coming trend if they expect to stay in business. 

“And if you have outdated technology or no technology, it is an unequivocal fact that you’ll be out of business before you know it,” she said.  

The theory is simple.

“If hardware, like your mobile phone, has to be updated every three years, then surely your business software should be refreshed every once in a while to remain relevant to customers.”

This article appears in the 
FEBRUARY 2021 issue
of Amusement Today.
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