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The Future of Contactless Payments

Photo taken by Towfiqu Barbhuiya on Unsplash

Last updated on July 14, 2022


Have you ever walked into a store with the choice to pay with either cash or a card? I’m sure there has been at least one instance. In those situations, if you picked a card, you would swipe or insert it. Afterward, after being approved, it would be removed, and the items would be yours. But that isn’t the picture that we get today. In cities, all over the world, the choice between a card or cash has been replaced. Instead, the discourse is more focused on tapping a card, swiping it, or inserting it. Simply put, to use contactless payment or not. During the COVID-19 pandemic, the overall usage of contactless payment rose 150% beginning in March 2019.


Contactless payments do not have to pass between people or be swiped through a machine. Tapping a card or a phone, like when using Apple Pay, is an example. The systems built on phones allow for contactless payment. Whereas you can tell if a card is capable of it based upon whether it has a sideways Wi-Fi signal or not. This is all possible through RFID (radio frequency identification). Contactless payment still requires a shopper to hold the device that their money is being represented. Thus, online shopping does not fit within this category. 

Even though it has seemed as though the Point-Of-Sale (POS) Terminals, which are the machines that accept contactless payments through cards or phones, have popped up overnight, they have been a long time coming. Before the COVID-19 pandemic, contactless payments still existed, but they were not as commonly known. Even in 2018, the number of cards with tap-to-pay capabilities was well below average. But, with deadly germs that could spread from cash to people, a simple tap to pay for many items is much more attractive. It has got to the point where many store locations only take contactless payment. This has begun making cash obsolete. But it is not the only thing in store for a society that relies more and more on tapping rather than handing in or swiping. 

What the Future Holds

There is almost no doubt that contactless payments will keep on growing, far enough to surpass cards and cash. Especially with the knowledge that new pandemics are sure to arise again, contactless payments set the minds of many at ease. Take into account that many people use smartphones, such as Apple devices to pay at POS Terminals. This means there is less of an incentive for people to carry cards and cash with them, only needing a smartphone. As Apple Pay has grown, other competitors, such as Samsung, have come out with their forms of contactless payment, which will only continue.  

On an economic level, a study shows that the global contactless payment market size should increasingly grow. From USD 10.3 billion in 2020 to USD 18.0 billion in five years. Furthermore, the number of small businesses popping up has found contactless payments to be reliable. In doing so, they can sustain themselves. In a study done by Visa, 59% of all surveyed small businesses claimed to use only digital payments in 2022. Of course, this can mean both contactless and online, but it shows a shift that will only increase. 

It is common knowledge that when there is a business opportunity to be had, companies will jump on it. That is precisely what they have done with contactless payments. It ensures heavier reliance on smartphones, while not taking away the bank’s role. Most banks make their income from interest on loans. Because credit scores would still be in practice, there would be very few issues with contactless payment. Even more so, banks would turn even more of a profit due to the increased amounts of small businesses that rely on electronic payments. While this also draws up questions for the future of ATMs, they do not create large enough revenue to matter. That does not mean there is a direct correlation between the existence of contactless payment and a growing amount of small businesses. Still, it makes the business far easier to handle.

When viewing the safety of handing credit, cash, and contactless the future still shines bright for no contact. Cash is the most unsafe. There is no insurance for it, if it is stolen, and it is impervious to track, whether good or bad. On the other hand, there are many tricks and scams to take advantage of cards. Still, one can always freeze their card and assets in the case of an emergency, so there are precautions in place. When it comes to contactless payment, the risks are very similar to that for cards.


While health impacts and safety is looking upward because of contactless payment, it is not all beneficial. Less cash means that unhoused individuals are not able to collect as much money as before. It means that some of the older, cash-only shops may see less business. In part due to their monetary collection system becoming obsolete. Some may see this as early signs of potential for gentrification, or where the wealthy displace less advantaged inhabitants after moving into their neighborhood. But as contactless payments have only started to rise, these impacts are only starting to emerge and could be the fault of many other factors too. With the increased usage, more indications of the benefits and harms of using contactless methods to pay will come to light.

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