Will contactless payments become a new normal post COVID-19?

As coronavirus-caused Covid-19 pandemic continues to shake up the economies across the world, contactless payments have taken a centre stage.

Murali Nair, President, Banking, Zeta, sheds some light on the rise of contactless payments post COVID-19. Pixabay photo.

As coronavirus-caused Covid-19 pandemic continues to shake up the economies across the world, contactless payments have taken a centre stage. But, will this continue even after coronavirus spread dies down or will contactless payments become a new normal post-COVID-19? Murali Nair, President - Banking, Zeta, a fintech firm, sheds some light on the rise of contactless payments post COVID-19.

Murali Nair says, "In this era, where the entire world is trying to cope with the COVID-19 pandemic, metaphorically speaking, while ‘’cash is king” in terms of ensuring liquidity, “cash is no longer king when it comes to payments! The RBI Governor Shaktikanta Das has in fact appeared on television advocating Digital Payments in general and Contactless payments in particular. The new norm is to use UPI, IMPS, mobile wallets, and net banking as they could contribute effectively in maintaining social distancing. Healthcare experts to have also recommended “contactless payment methods” whenever possible. Since the lockdown was enforced, while overall commerce has reduced considerably, there has been an increase in card-based and digital transactions as a percentage of overall transactions."

Nair adds, "Any type of payment that is made without using cash is considered a Cashless or Digital payment method. Examples include credit, debit or prepaid card payments, Bank transfers, mobile wallet payments and UPI payments using GooglePay, Paytm or PhonePe. Distinct from the above are ‘’Contactless Payments”. These are those transactions where credit, debit cards or prepaid cards use near-field communication (NFC) or radio frequency identification (RFID) technology. These cards usually have the “contactless wave” symbol-many people colloquially refer to it as the “wi-fi” card!
In contactless payment, no PIN or signature for the card is required to make a payment for transactions below Rs.2000 — you can simply tap and go. One need not swipe or insert your card into the POS machine-you can just wave the card near the reader to complete your payment."

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Further Nair says, "Samsung Pay and Google Pay allow your Bank Issued Debit or Credit card to be “tokenised” and provisioned in your Samsung Pay or Google Pay apps and your phones can then be “waved” or “tapped” near “Contactless enabled POS terminals” to complete the transaction.
These contactless transactions are completed with the highest level of encryption to ensure that your data is transmitted securely. In a recent move the RBI has allowed “TAP and PIN” for transactions above Rs.2000/- meaning for transactions above Rs. 2000/- you as the consumer, can tap the card and enter your pin yourself on the POS machine! No need to hand over the card to the merchant! One more way to avoid the chance of contamination by allowing your card to be handled by another person!"

"We all know that these are tough times for everyone as we do not know how long this situation continues. However, by adopting contactless and digital payment modes and following the steps mentioned above, one can manage to continue to engage in commercial activity without exposing yourself to the dreaded Covid virus! Stay Safe and practice social distancing. Listen to the RBI Governor and adopt Digital Transactions as a way of life," Nair concludes.

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