Editor's Choice Europe Fintech

COVID-19 and Contactless: The “Next Normal” According to Mastercard

The global pandemic has accelerated digitization at a rate we never imagined possible. According to Ajay Bhalla, president of Cyber & Intelligence for Mastercard, the “new normal” is not new anymore; we need to accept it as the “next normal.” Here he explains more.

Ajay Bhulla, president of Cyber & Intelligence, Mastercard. Photo credit: VisualMedia

Recent data shows that we vaulted the equivalent of five years forward in digital adoption in a matter of eight weeks. The world of instore payments is no exception, where contactless transactions – whether by contactless card, mobile device or wearable – have really taken hold. 

In Q1 2020, Mastercard recorded 40% growth in contactless transactions globally. This growth story continues and in June the volume of contactless in-person transactions increased in every merchant category versus the previous year. In fact, our figures show that now 40% of all our transactions are now contactless. We see this increase as indicative of a permanent shift in payment behaviour and we’re not alone in this. Recent research from analyst house Juniper forecasts that contactless payment transactions will eclipse $6 trillion by 2024 – an increase of 300% in five years. As an industry, we need to ensure we can work to meet this demand in a safe, secure and inclusive way. 

A cleaner and faster checkout

Minimizing contact is essential in stemming the spread of COVID-19, with public health and hygiene now the driving force behind much of our behaviour. With contactless payments, consumers benefit from a cleaner, touch-free interaction at checkout. In fact, 82% of consumers view contactless as the cleaner way to pay and 74% state they will continue to use contactless post-pandemic. And with increased payment limits now in place for Mastercard cardholders across 75 markets, contactless can now be used for higher-value transactions. 

A swift checkout experience has become essential as stores look to reduce the amount of time people spend gathering at the till. Contactless transactions are 10 times faster than chip-based cards, helping shoppers move through checkout more quickly and helping merchants process more customers.

Securing the path forward 

Consumer demand for faster, safer and now cleaner ways to pay has driven the transition to contactless. Meeting this demand means reconfirming that security is a non-negotiable priority. 

We are only as strong as the weakest link in our chain. Success comes from the ability to not only spot that link but instantly secure it too. Identifying and authenticating legitimate transactions while spotting fraudulent or suspicious ones is a central pillar of our multi-layered approach to security. Our industry-leading artificial intelligence processes more than 75 billion transactions every year in real-time, preventing fraud from harming consumers and the wider payments ecosystem. 

On top of this, to provide the most effective overall security protection, we go above and beyond what is required by the standards, having mandated the support of Combined Data Authentication on all of our contactless cards and terminals since 2011. This helps manage fraud risk at the point of use by preventing duplication or cloning.

Innovating for inclusion 

Financial inclusion remains one of the world’s great challenges and contactless payments could be the key to a solution. 

Mastercard is committed to bringing 1 billion people into the digital economy by 2025, creating pathways toward increased financial security for people, communities and businesses around the world. This includes developing solutions to help support small and micro-merchants. 

Ensuring digital access for everyday transactions is a key step in including those currently outside the digital economy. However, it can be expensive and complex for small and micro merchants to launch these services, meaning many are only able to accept cash payments. In April this year, there were still 130 million small and micro-merchants in emerging markets that do not accept electronic payments. Using tap-on-phone payments solutions that turn mobile devices into acceptance devices, small business owners can accept payments from contactless-enabled cards, mobile wallets and even smartwatches. This unlocks the opportunity to engage in the digital economy for consumers and small businesses alike, with the same standard of technology and security used by the large merchants. 

A long-term change 

One of the few positives to come out of the COVID-19 pandemic is the way it has accelerated many technology trends, almost overnight. With contactless, this technological shift could have serious economic benefits as well. Why? Because cash costs money. The economic impact of cash payments is estimated to cost approximately 1.5% of GDP. At a time when the global economy has tipped into recession, these savings are critical.

As society adapts to the realities of the “next normal” and contactless becomes more and more integrated into our lives, the change is set to be a permanent one. 64% of global consumers report fully stopping or reducing the use of cash as a direct result of the pandemic. 

Consumer adoption over the last few months has largely been driven by necessity, but in realizing the benefits of hygiene, convenience, security and experience, few will return to their analogue ways.


  • Gina is a fintech journalist (BA, MA) who works across broadcast and print. She has written for most national newspapers and started her career in BBC local radio.

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