Innovation

To serve consumers, businesses will need to adjust to a touch-free world

May 20, 2020 | By Jess Turner

As we continue to evolve the way we live with the impacts of COVID-19, our buying habits are changing accordingly. In March, instead of buying bathing suits and sunscreen for spring break, we stocked up on toilet paper, hand sanitizer and all-purpose flour. We continue to adjust, spending more online and less at brick-and-mortar stores, and when we do venture out, we’re scrutinizing payment terminals for the telltale contactless symbol.

Some of these new spending habits will fade away as we return to a closer-to-normal day-to-day life, but some will take hold, forever changing the face of consumer commerce.

Many of these changes were already underway before the pandemic turned Wi-Fi into a lifeline and touch-free became a way of life. Our world has become increasingly digital. Even before anyone had ever heard of COVID-19, commuters were tapping their credit or debit cards to pay for subway rides and managing their bank accounts on their mobile phones. A 2019 report by the investment bank Cowan projected curbside pickup to drive as much as $35 billion a year for retailers by 2020, with as many as 25% of consumers opting for so-called click-to-brick fulfillment.

But this unprecedented shift online is accelerating these trends as retailers rush to catch up to where consumers want to be.

That’s going to mean moving to more contactless payments offline and simpler payments online. Right now 51% of U.S. consumers are using some form of contactless payment, and that number will almost certainly climb. That embrace is echoed in markets across the globe. According to a recent Mastercard survey, 57% of U.S. consumers say paying via contactless is more top of mind than pre-pandemic, and 45% say they prefer to shop at stores offering contactless options.

It also means retailers will need to ramp up their online presence and curbside pickup options. E-commerce sales grew 25% annually by mid-March, and in-store pickups from online shopping grew 62%. We may see more of the intermingling of the digital and physical, with brick-and-mortar stores acting less as sales floors than as showrooms or even distribution nodes.

Technology will have to meet the challenge. Peace of mind is more than touch-free checkout — it’s about trusting the retailer will keep your payment information safe and out of the reach of hackers and fraudsters. We’ve pioneered technologies such as tokenization, which turns a card’s account number into a unique alternative number, allowing cardholders to store their credentials without fear of fraud.

Yet in the U.S., half of consumers in pre-pandemic times still made at least some of their online purchases through tedious manual entry, in part because they simply don’t trust these businesses enough to store their cards with them. That’s why we helped pioneer Click to Pay, our one-touch checkout button secured by both tokenization and our device and gesture-based technology from NuData, a Mastercard company and leader in the field of online user verification.

Security has always been part of our core card benefits. All of our credit and debit cards come with ID theft protection that is particularly valuable at times like these, when fraud tends to skyrocket. According to a recent survey by Payments Journal, 22% of consumers had been targeted by digital fraud related to COVID-19. We monitor consumer credit files for changes that could indicate fraud. We send alerts around any suspicious activity and we resolve all disputes.

In this always-on digital world, when people expect dinner to be a mere click to pay or tap away, we are also using technology to seamlessly integrate their card benefits into the payments experience. By forging partnerships with digital brands such as Postmates and Shoprunner, some cardholders now automatically enjoy relevant, real-time benefits tailored to their needs during the pandemic and beyond, such as $5 off orders of $25 or more with Postmates and two-day free shipping and returns from more than 100 merchants through Shoprunner. We’re also making it easier than ever for consumers to use the points they earn, enabling them to pay with rewards points right at checkout.

And we’re continuing to develop the payment experiences and products that resonate in today’s world, powered by technology innovative and flexible enough to meet the needs of tomorrow. There’s no question that life will get back to normal, even if normal looks a little different than it did before. For consumers and retailers, that might not be such a bad thing.

Jess Turner, Executive Vice President, Products & Innovation, North America