Contactless and digital-only payment methods will enjoy a significant growth in popularity as a direct result of the Covid-19 pandemic, a new report from the Emerging Payments Associate (EPA) suggests.
According to the report, digital-first payment such as Apple Pay or Android Pay will seriously disrupt more traditional payment service providers, such as credit or debit card issuers.
But it's not just Covid-19 that's speeding up the pace of change. It appears this transition would likely have taken place regardless - if a little more slowly - particularly with the younger demographic being so familiar with digital wallets and similar technology.
Despite the change occurring organically, the shift is not without its challenges, particularly for disruptors. The report states that these businesses will need to exercise particular caution over how they handle customer data, as well as how they manage cross-border payments.
“The switch to digital payments looks set to happen much quicker than the shift to cards did in the past,“ said Nicholas Mackel, CEO of Luxembourg for Finance.
“The method of payment is becoming less important than the platform used, to the extent of becoming invisible. This report highlights the countries that have been early movers and are demonstrating best practice in the payments space.”
Many large tech companies are moving into the financial industry, Facebook being the most notable example. It first announced its plan to develop a stablecoin called Libra and also recently announced the launch of WhatsApp payments, which will be trialled in Brazil.