India’s use of contactless payments extends to physical shopping, says the 2022 report.
India’s use of contactless payments extends to physical shopping, says the 2022 report.
According to a recent analysis by Visa and Worldline India, contactless card payments have increased sixfold in three years. Acceptability has built around it, becoming a need rather than a choice, and the epidemic has further reinforced its use.
In just three years, the percentage of contactless transactions in total face-to-face (F2F) trades has increased by more than sixfold. According to a new report by Visa and Worldline India, contactless transactions accounted for 2.5 per cent of total F2F transactions in 2018. They will account for 16 per cent of complete F2F transactions by the end of 2022.
India taps into a Contactless Future is a paper that looks at India’s journey toward contactless payments, and which parts of the population have adopted this payment technique. “The rapid adoption of contactless payments in the last few years is witness to the surge in acceptance of safer and quicker forms of cashless payments across consumer sectors,” says Ramakrishnan Gopalan, vice president, head of products and solutions for Visa in India and South Asia.
According to Gopalan, they studied payment methods and concluded that availability, convenience, usefulness, security, and other factors were driving contactless payment expansion. He expressed confidence that as contactless payments become more common, these numerous characteristics would continue to help their acceptance at scale.
“We are certain that it is a long-term payment solution for smooth face-to-face transactions that will significantly aid in the transition to a cashless society,” says the company.
The trend of contactless payments, which has been expedited by the epidemic, is here to stay, according to Pranay Jhaveri, managing director – India & South Asia, Euronet Worldwide.
“We believe India is well on its way to becoming the world’s fastest-growing digital payment market.” The number of NFC-enabled terminals deployed has increased, indicating a significant shift in customer and retailer behaviour. “The relative increase of businesses accepting contactless payments has also contributed to the rise of contactless transactions over time,” Jhaveri notes, citing the growing demand from customers.
“Technology and legislative shifts have paved the way for this transition to contactless payments.” The popularity of contactless payments will only increase as consumer interfaces become more simple and safer.
The Report’s Main Points
The following are some of the report’s main points:
Indian customers preferred contactless card payments in fast service restaurants, pharmacies, food, groceries, entertainment, and other industries, according to the survey. As of January 2020, according to Worldline India data, contactless card payments accounted for 25% of all transactions in supermarkets. By January 2022, this figure had risen to 31%.
Sunil Rongala, Worldline India’s senior vice-president of strategy, innovation, and analytics, noted that contactless payments have transformed from a choice to a requirement in recent years, and he is optimistic about the technology’s enormous future potential.
“Due to enhanced customer simplicity and safety, contactless payments rebounded quicker than other modes of face-to-face payment throughout the epidemic.” Contactless payment adoption will be critical in the development of more innovative payment infrastructure and smarter cities, he noted.
Cities: According to the survey, India’s metro cities are at the forefront of contactless card payment acceptance. Both debit and credit card-based contactless card payments were most prevalent in Delhi-NCR. Maharashtra, Karnataka, Andhra Pradesh, Telangana, Tamil Nadu, Gujarat, Kerala, Haryana, and Uttar Pradesh were the other states that led in contactless card payments. “Outside of the primary metro/metro locations in those states, Maharashtra has exhibited penetration in debit and credit growth.” According to the research, “this might be attributable to increasing card issuance and smartphone adoption that accepts contactless payments.”
People Who Spend: According to the research, affluent Indian customers were driving the development of contactless payment solutions. However, even the mass wealthy has accepted contactless card payments, particularly for their everyday critical purchases such as food, groceries, gasoline, and pharmaceuticals.
“Affluent cardholders with digital-focused personalities, such as eCommerce and electronic shoppers, luxury travellers, and enthusiastic wallet users, who value convenience and time, have a higher adoption rate for contactless and card-on-delivery alternatives,” according to the survey.
Trends in Contactless Shopping to Watch in 2022
Since the epidemic, consumer behaviours have changed dramatically, and the retail industry is continually evolving to accommodate new customer needs. In 2022, there will be a few contactless purchasing trends that will help small companies grow.
Life, technology, and business have all taken on new hues in the last two years. Preparing for the new year now entails gaining a better knowledge of the new normal in 2022 and adjusting your firm to current trends and developments.
The way various tiers of company operate has changed dramatically. Several elements have received new technology touches, ranging from production to marketing to retail sales. Customers are prioritizing ‘Contactless Shopping’ as one such significant trend.
What is the benefit of going contactless?
Due to Covid19, lockup, and similar preventative measures, consumer habits have altered dramatically in recent years. Customers are gradually becoming acclimated to these practices. Therefore they are unlikely to change very soon. Retailers must stay up with the times as customer shopping habits change.
Even if pandemic fears and limitations subside, customers have gotten the hang of contactless purchasing and will find it more convenient and pleasant. According to a recent poll, 52% of respondents plan to conduct more internet shopping in the future than they did before the epidemic. Cashless digital transactions are likewise becoming more popular. Such trends can be seen all throughout the world, and they are boosting sales. As a result, merchants are embracing these important trends in order to keep and please their customers.
- Cashless
Although the transition from cash to cashless transactions is not new, it has accelerated recently. Nowadays, people are more likely to utilize debit/credit cards, digital wallets, and payment applications. Swiping devices and QR scanning are found at practically every store, regardless of size or popularity.
If card swiping or payment scanning is not available, customers are more likely to purchase elsewhere. If you don’t offer such sophisticated payment options, not only will new clients be hesitant to buy from you, but loyal customers may also leave.
It’s not about being cashless completely. With different clients employing various modes, it is prudent to make a few new adjustments in order to maintain the firm running. Cashless payments, however, are not the only trend in contactless buying. Virtual storefronts and more user-friendly pickup and checkout alternatives are needed for retailers.
- Virtual shopping malls
Virtual retail businesses are popping up everywhere, whether it’s small or large companies. A virtual shop is an online store where customers can browse, investigate, and buy things without leaving their homes.
This has a significant impact on how people shop. It provides a comparable experience to that found in physical businesses, and it has grown in popularity as a result of the pandemic lockdowns. Setting up virtual retail establishments has already become the standard as people strive to avoid congested locations and go out less frequently. Right now, a virtual retail shop will be the main push your company needs.
- Chatbots
Artificial Intelligence (AI) will be the next big thing in 2022 since it will be used to improve customer experience and hence increase revenue. Customers expect to be attended to on an individual basis and in a timely manner. The shopping experience is just as crucial as the product itself. Using chatbots to deliver personal and easy service to clients 24 hours a day, seven days a week can help merchants improve their brand image and reach.
This is a more intelligent approach to improving client satisfaction. By 2022, the worldwide retail business is estimated to spend $7.3 billion per year on AI, according to a study. In a highly competitive industry like retail, a customer-centric strategy is critical. As previously said, product innovation combined with a flawless purchasing experience is the best approach to growing sales and building a loyal client base. Chatbots may improve your consumers’ shopping experience by providing pre-order advice and reacting to incoming questions, as well as assisting with checkout and providing post-sale updates and educational content.
- Purchase online and pick up in-store
BOPIS, or buy online, pick up in-store, is a well-known concept. It’s a new shopping trend in which customers may explore and purchase products online, and then pick up their pre-ordered items in shops. People will spend less time in stores; as a result, avoiding crowds and the risk of getting the virus.
It cuts down on the amount of time spent queuing and waiting at the checkout. It also decreases the likelihood of physical contact with other consumers. Many well-known companies, retail businesses, and e-commerce sites provide this service. Understanding the necessity for this model and applying comparable purchasing methods can help you increase your sales.
Other technical advancements, including virtual try-on features, self-checkout, and virtual assistant in-call assistance, are being adopted throughout the world to encourage and scale up contactless buying. When both global and local markets are progressively favouring technical support for touchless shopping, it will be critical for you to include such strategies in your firm in 2022 if you want to be successful.
What has COVID-19 done to our shopping habits – and what to anticipate in 2022 and beyond
As we emerge from the worst of the epidemic, now seems like a good moment to reflect on the most significant changes in consumer behaviour that have occurred, as well as offer some predictions regarding COVID-19’s long-term and widespread implications on how we buy.
COVID-19 has had a significant impact on how businesses and consumers conduct themselves. Panic purchasing, the emergence of the homebody economy, and a dramatic move toward contactless shopping have all been seen.
As we emerge from the worst of the epidemic, now seems like a good moment to reflect on the most significant changes in consumer behaviour that have occurred, as well as offer some predictions regarding COVID-19’s long-term and widespread implications on how we buy.
- Purchases made during a pandemic
One of the first effects of COVID-19 was the routine removal of toilet paper and other supplies from grocery shelves prior to lockdowns. One dispute spawned by this behaviour was whether it was sensible to hoard in reaction to others’ irrational behaviour or if it was insane to panic purchase.
It was a hands-on game theory lecture. Individual decisions that make perfect sense to them might have a negative impact on the community.
- Making the switch to contactless
Contactless payment solutions accelerated as a result of our desire to eliminate physical interaction. According to research (from the Netherlands), this will be a permanent shift for the vast majority of people, hastening the steady fall in the usage of cash for shopping. This move will be aided by technology that allows for mobile payments, such as supermarkets offering a means to pay by scanning a QR code.
Curbside pickup and home delivery are examples of ways to buy products without ever having to walk inside a store. In 2021, we’ll witness a slew of new startups advertising 15-minute grocery delivery.
- Multi-sensory perceptions
Our purchasing habits will increasingly be shaped by what marketing experts refer to as omnichannel shopping, a fancy term that refers to making a purchase through a variety of experiences. For example, you may walk into a store to try on headphones before going online to read third-party reviews and compare pricing from other vendors.
This tendency will be aided by technologies such as augmented reality. IKEA’s Place app, for example, allows you to visualize how furniture will fit into your area. From attending university to having a doctor’s appointment to taking a tour of the British Museum or touring the Grand Canyon, more and more once-physical events will have digital counterparts.
Though they can’t replace the actual thing, they’ll become a more popular option to try before you purchase.
The digital and physical worlds of purchasing will eventually mix in the future. Whatever else changes, one thing will stay constant: people’s desire to make experiences more accessible, more enjoyable, and more meaningful.
- Spending more while spending less
At the very least, it was conceivable to spend more money at the grocery. Due to closed borders, local shopping, stay-at-home directives, and overall uncertainty, consumption habits shifted dramatically. According to the Australian Bureau of Statistics, expenditure on transportation, lodging, amusement and entertainment services, and catering has decreased significantly.
Food spending grew little, while alcohol spending increased even more. According to one research, stress (45.7 per cent), greater alcohol availability (34.4 per cent), and boredom were the top causes of increased drinking (30.1 per cent).
Electronics for the house, streaming services, furniture, hardware, and pet-related products all saw a boost in spending. Cooking, reading, and gardening have all seen an upsurge in popularity. It’s too early to say if these pandemic-driven alterations will lead to long-term behavioural changes. However, a recent study based on a survey of 7,500 families in France, Germany, Italy, the Netherlands, and Spain suggests that at least some long-term sectoral alterations in consumer behaviour are possible.
- Prognostications for a shopping spree
As limits loosen, some marketing gurus expect rampant purchasing sprees in retaliation. Many higher-income households have the financial means to treat themselves to a vacation, a new car, or a home repair, with Australians saving an estimated A$140 billion throughout the epidemic.
According to other studies, such as the National Australia Bank’s weekly Consumer Sentiment Survey, the epidemic has prompted people to be more cautious. In its most recent poll, 37% indicated they were conscious or careful about how they spent their money (42 per cent of women and 33 per cent of men). In terms of purchasing influences, 43 per cent said they were influenced by supporting local companies, compared to 15 per cent who said they were influenced by environmental issues and 14 per cent who said they were affected by social issues, including labour abuses.
Some have speculated that, in the aftermath of COVID-19, we are on the verge of another Roaring Twenties, replicating the period of economic prosperity and cultural vibrancy that followed the deprivations of WWI and the Spanish flu pandemic in the 1920s. The situations aren’t quite the same. New technology and changing behaviours, on the other hand, are likely to lead to many long-term changes in how we purchase.
Conclusion
To stay up with modern-day trends and customer preferences, the financial industry is continually developing. We’ve already shifted from popular chip cards to tap-and-go technologies in only a few years.
Businesses are continually seeking innovative methods to boost customer satisfaction by improving the customer experience. Companies must keep up as a growing number of customers use contactless payment solutions.
These alternatives are seen by customers as a requirement of the businesses they patronize. They provide security and convenience, save time, and are a more sanitary option, after all. Because everyone with a tap-to-go card or a smart device may use it, everyone can realize the advantages of this feature. Contactless payment is a cashless, tap-and-go form of payment.
Consumers touch their card at the point-of-sale terminal to complete the purchase depending on proximity. There is no need to swipe or insert a card. In recent years, the “wave and pay” payment mechanism has sparked popularity.
Article proofread & published by Gauri Malhotra.
