Here’s how the pandemic is completely changing how we pay
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
The U.S. has historically been slow to adopt contactless payment — but that’s all rapidly changing right before our eyes. A big reason? The coronavirus pandemic.
“When possible, it would be advisable to use contactless payments to reduce the risk of [COVID-19] transmission,” a spokesperson for the World Health Organization said earlier this spring.
And as technology continues to advance, credit card issuers are introducing contactless payment methods to the U.S., where historically, it has been much less popular than other areas, such as Europe and Canada.
New to The Points Guy? Want to learn more about credit card points and miles? Sign up for our daily newsletter.
Contactless payments are not only more convenient but also more secure — and now more sanitary — than swiping your card. So let’s take a look at which contactless payment options are available, why it’s growing in popularity and what all of that means.
What are contactless payments?
Contactless payments come in two main forms on a credit card – mobile wallet or app payments and via contactless technology embedded directly into the card.
If your card is equipped with contactless technology simply hold it near the card reader to complete your transaction. Keep in mind, the payment terminal will need to have near-field communication (NFC) capability, so this won’t work for older card readers.
The growth of contactless — and what that means
In 2016, only 3% of all credit cards were equipped to handle contactless transactions. However, credit card networks and issuers have seen rapid upticks in contactless in recent years, especially during 2020.
Since the coronavirus outbreak began, fears over the transmission of the disease have forced consumers to rethink how they shop, spend and pay.
For instance, Mastercard reported a 40% growth in contactless transactions worldwide in the first quarter of 2020 alone. And surveys have indicated that more than half of new tappers will continue to use contactless even after the pandemic.
Visa says that tap-to-pay transactions in everyday segments such as grocery and pharmaceutical are up more than 100% year-over-year. Overall, contactless usage in the United States has grown 150% since March 2019.
What happens to cash?
While this is accelerating the global economy toward a more card-focused future, cash isn’t just going to disappear. While card payments and contactless will continue to dominate, cash is still king — especially for marginalized communities, including the elderly and lower-income earners.
For some, access to banks and electronic payments just isn’t possible and may create an additional chasm between the haves and have-nots. The disappearance of ATMs and retailers that won’t accept cash payments will particularly hurt the unbanked.
Are contactless payment methods more secure?
For contactless to work, a unique one-time token is sent to the payment terminal for each transaction. The token does not contain any of your card details, so if the purchase is compromised, that token cannot be used to make another purchase.
This added layer of protection is the same system that is used when you insert your card’s chip into a card reader, except contactless payments process much faster (in about half the time). Mobile wallets also have the added step of needing to verify with a PIN, password, fingerprint or facial recognition before a payment can be made.
One common concern is that thieves could use NFC card readers to steal your data electronically by getting physically close to your wallet. However, any hacker would need to be extremely close (within four-10 centimeters) and thanks to tokenization they still wouldn’t be able to swipe your card data.
Where in the U.S. can you make contactless payments?
While contactless payments are not as popular in the U.S. as elsewhere, they are becoming more common each day. The vast majority of transactions are processed on payment terminals that are NFC-enabled and that number continues to grow as well. And that’s on top of the fact that nearly everyone has a smartphone with access to a mobile wallet.
Many merchants also have contactless payment options available with their apps. For example, you can make a contactless payment at Dunkin’ Donuts or Starbucks through their apps. BP has an app where you can even pay via the app at the pump. And we’re seeing the technology spread to public transit with the New York MTA launching a new contactless system.
Which card issuers are using contactless payments in the U.S.?
Almost every major card issuer in the U.S. has begun rolling out contactless card technology or has announced plans to. But even if a specific card that you have isn’t outfitted with contactless payment technology, you still have the option of adding that card to a mobile wallet and making touch-and-go payments that way. This effectively means that as long as you have a smartphone, contactless payment is an option for you.
For more information, check out our guide to our favorite contactless payment-enabled credit cards.
Contactless credit cards and payments are wildly popular abroad but have been slow to catch on in the U.S. However, that is rapidly changing with coronavirus, the spread of NFC payment terminals and nearly every major U.S. bank issuing contactless cards.
Given the increased security, speed, and touch-free world that we live in now, it’s not a surprise that contactless has arrived in full force here in the U.S. — and found even more adoption internationally.
Additional reporting by Jason Stauffer.
Featured photo by Jacob Lund/Shutterstock.
Welcome to The Points Guy!
Earn 90,000 bonus miles after you spend $3,000 in purchases within the first three months of card membership. Plus, earn a $200 statement credit after your first Delta purchase within the first three months. Offer ends 7/28/21.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Limited Time Offer: Earn 90,000 Bonus Miles after spending $3,000 in purchases on your new Card in your first 3 months and a $200 statement credit after you make a Delta purchase with your new Card within your first 3 months. Offer expires 7/28/2021.
- Limited Time Offer: Plus, get a 0% intro APR on purchases for 12 months from the date of account opening, then a variable 15.74%-24.74%. Offer expires 7/28/2021.
- Accelerate your path to Medallion Status, with Status Boost®. Plus, in 2021 you can earn even more bonus Medallion® Qualification Miles (MQMs) to help you reach Medallion Status.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees