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Payment firms are pushing contactless payments as governments and consumers try to minimize the interactions between people and common surfaces to combat the spread of the virus.
Mastercard and Visa are raising contactless transaction value limits in several more countries. The card networks are raising the limit in Canada from CA$100 ($71.64) to CA$250 ($179.10), per Digital Transactions. Mastercard is also raising its limit in Kenya, Mauritius, Tanzania, and Uganda, bolstering the roster of markets that are having their limits increased by firms or local authorities, per NFC World.
Contactless limits cut down on the number of contactless transactions consumers can make because they can't make purchases that exceed the value caps with only a tap. Raising the limits should encourage more consumers to make contactless payments, especially during the pandemic.
UnionPay is partnering with banks to issue thousands of contactless cards. The China-based card network announced it has partnered with a bank in Kazakhstan to send out 100,000 contactless cards in the country in the near future. It also noted that it's undertaking similar initiatives in Mongolia and Russia through other partnerships with banks. Getting contactless cards into more consumers' hands will enable greater adoption of contactless payments as people work to avoid contracting the coronavirus.
If card networks push for higher limits around the world and convince more issuing banks to distribute contactless cards, the payment method could be favored by a large swath of consumers by the end of the pandemic. Consumers are already working to avoid stores, but when they have to visit one they likely want to make the transaction as quickly as possible and minimize their contact with any shared surfaces.
Interested in even more free research and data in your inbox? | | Business Insider Intelligence and eMarketer have combined to launch a brand new free Chart of the Day Newsletter, which features insights like these in an easy-to-read format, delivered to your inbox. | Contactless payments can help make that possible, so if more consumers gain access to contactless cards and can make larger purchases with them, consumers may use them regularly during the pandemic. And it's possible consumers will continue to use them after the pandemic subsides — they're already very popular in the UK and other European markets — out of habit or because they enjoy the convenience they offer.
However, there appears to be limited change in the contactless environment in the US so far, which could hamper adoption in the market. Contactless adoption has been slow in the US, and without a push from firms to put out more contactless cards in the market, consumers may not be able to start making contactless payments during the pandemic.
Contactless transit payments were expected to be a major driver of overall contactless adoption in the US, but with transit ridership down due to the pandemic, this likely won't prove as effective. However, US consumers appear to be increasingly interested in contactless payments because of the pandemic, so the payment method may still gain some popularity despite losing transit payments as a driver.
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