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September 21st 2020

Contactless Payments: Friend or Foe for Merchants?

Throughout the pandemic, contactless transactions have soared – somewhat inevitably – as people across the globe seek to physical minimise contact.


For consumers, contactless payments not only reduce the risk of spreading the virus: they offer a quicker, easier way to pay at the Point of Sale (POS). For many merchants, this is welcome, however, there could be significant ramifications to costs and payments industry competition.

In addition to reducing cash transactions, contactless can make routing to local card networks challenging for merchants: increasing overall payments acceptance costs. Further, contactless transactions are not a competitor to cards. In fact, contactless payments serve as a catalyst for the card networks’ cannibalization of cash. Many countries lack adequate competition between payment methods to keep costs low and are simply are not ready for cash to decline further. In this article, we explore these trends and assess their long-term impact on the merchant community around the world.

Contactless Payments: Friend or Foe for Merchants?