Data and analytics firm GlobalData is predicting an unprecedented push in e-commerce and contactless payments following the coronavirus pandemic.
With cash often seen as a potential carrier of the virus during the pandemic, various types of digital payments have gained traction in the wake of lockdowns imposed across several countries. According to GlobalData, this trend will continue in the post-pandemic environment to transform the payments ecosystem, says.
“Once a convenience but now a necessity, online shopping keeps the economies running during the Covid-19 crisis while also helping to control the spread of the virus,” said GlobalData fintech analyst Ayushi Tandon. “The pandemic-induced surge in e-commerce from the existing shoppers and an influx of new consumers, notably for grocery, food delivery, health and other supplies, has accelerated the digital payment adoption that was sluggish and varied by country until 2019. At the same time, consumers see contactless payment methods as the safest bet to pay in-store.”
With an increase in online shopping, e-retailers are now competing to offer various types of payment gateways, including redirects to paytech platforms such as Paypal; checkout on-site and payment off-site such as Stripe’s payment gateway; a direct on-site payment gateway and contactless payments.
The firm also found that biometrics-based payments through face and touch recognition will become routine in future to address security concerns with current digital payment methods.
“Albeit the total payment volumes are anticipated to take a severe hit in 2020 due to losses in travel and in-store retail segments, growth will be resumed in 2021 backed by the overall shift to e-commerce and contactless payments enforced by the protracted crisis,” added Tandon.
“Under such circumstances, fintech companies are better positioned compared to banks that lack digital capabilities to quickly scale up in line with the growing demand. Nevertheless, the environment is ripe for bank-fintech collaboration to offer superior and cost-effective payment solutions to customers as well as gain their trust amid growing fraud in e-commerce.”