Reasons for the Rapid Adoption of Contactless Payment Technology
In the post-pandemic period, more than 70% of users turned to contactless payment because they did not want to touch the terminal with their hands. In the US, only 3% of credit cards had contactless features before 2020, but this rate exceeded 50% in 2023. Visa and Mastercard now integrate contactless chips as standard on all newly issued cards.
Contactless payment terminals accounted for 30% of all POS devices in the US in 2019, and this figure is expected to reach 85% by 2024. Many retailers have begun phasing out contact payment terminals and switching to contactless-only devices.
Speed and Efficiency: Shorter Processing Times Are Changing Perceptions
Contactless payment transactions take an average of 15 seconds, which is 50% faster than chip or magnetic stripe payments. Chains such as Starbucks, McDonald's, and Amazon Go have found that customers using contactless payments spend an average of 7–10 seconds less at the checkout.
Contactless cards have become a necessity for fast-paced systems like airports, subways, and parking lots, where “speed” directly impacts revenue. After implementing contactless payments in the London subway system, the average transaction time at turnstiles decreased by 40%.
Contactless Cards and Perceptions of Security
Although some users initially had security concerns, higher contactless transaction limits and two-factor authentication systems have changed this perception. Thanks to EMV technology, contactless payments use dynamic encryption for each transaction, making data copying nearly impossible.
Visa and Mastercard reported that contactless card fraud rates are 60% lower than traditional cards. As of 2022, 78% of users in the UK said they find contactless payments “safer than all other methods.”
Increased Integrated Use with Mobile Wallets
Contactless card usage has gained momentum with the proliferation of mobile wallets such as Apple Pay, Google Pay, and Samsung Pay. Ninety-two percent of iPhone users actively use Apple Pay for contactless payments, up from just 16% in 2016.
Most payments made with mobile wallets actually go through contactless card infrastructure; users become part of the contactless system without even realizing it. In the US, 64% of younger users (Gen Z and Millennials) make payments using only mobile wallets without carrying physical cards.
Contactless Cards and Cultural Behaviors
Contactless payment habits were adopted more quickly in countries where personal space sensitivity is high; for example, in the UK and Canada, contactless payment is referred to as “clean payment.” In the post-COVID era, the motto “no sharing, no touching, no waiting” has become central to banks' contactless payment campaigns.
Contactless payment systems have also been praised in the field of inclusive design for offering a more accessible option for people with physical disabilities. In the UK, some museums increased donation rates by 35% by converting donation boxes from physical cash to contactless credit card terminals.
Boom in the Retail and Food Sector
Whole Foods, one of the first chains in the US to implement contactless payment infrastructure, reduced checkout times by an average of 22% after the transition. Large retail chains such as Walmart have begun testing not only contactless but also “cashierless” payment systems in the post-COVID era.
Chains like Dunkin', Starbucks, and Chick-fil-A have integrated contactless payments with loyalty cards and campaign systems, offering instant discounts to paying customers. Businesses that have transitioned to contactless payment infrastructure in retail have seen customer satisfaction scores rise by up to 15%. Customers who use contactless payment for grocery shopping spend an average of 8% more, demonstrating that speed can encourage spending.
Increased Use in Transportation and Public Services
In cities like London, New York, Toronto, and Sydney, contactless payments are now standard in transportation systems; simply tapping a card is sufficient for metro, bus, and train rides. The New York MTA reduced physical metro card sales by 30% after switching to contactless systems. Cities that minimized contact in public transportation through contactless payments emerged with lower infection risks during the pandemic.
Contactless credit cards are now as valid as physical coins in public parking lots, taxis, and bike rental stations. In some cities, contactless payment systems have been integrated with social assistance cards to make public transportation more accessible for low-income citizens.
Investments and Strategic Moves by Financial Institutions
Between 2021 and 2023, Visa and Mastercard invested over $3 billion in contactless infrastructure development projects alone. In the US, major banks are issuing 99% of new credit cards with contactless features; this is no longer the exception, but the default. In Canada, some banks are incentivizing customers to use contactless transactions by offering small point bonuses or cashback campaigns.
Thanks to contactless transaction data, banks can analyze user behavior in real time and offer personalized campaigns and spending limit recommendations. Some digital banks (e.g., Monzo, Revolut) convert contactless transactions into detailed spending charts to increase user control.
User Psychology and Behavioral Effects
The “payment feeling” decreases among contactless payment users; not touching the card to the terminal removes the physical action of spending. Therefore, some psychologists argue that contactless payments may encourage small but frequent spending behavior. According to a study published in Harvard Business Review, users report feeling less “payment pain” after making a contactless payment.
Contactless card users say they choose this method because it is “clean, fast, and easy,” but most are unaware of the security details. The majority of users request an increase in the contactless payment limit, indicating that usage habits are shifting toward larger expenditures.
Interesting Integrations of Contactless Systems
Some animal shelters and NGOs have started using mobile contactless terminals that allow passersby to swipe their credit cards to make donations. In Europe, some street musicians are able to collect a few euros in donations from volunteer listeners using small portable contactless POS devices. In the UK, a church digitized its donation boxes to create a contactless card system for “donations for prayers”; in 2021, it raised 17,000 pounds.
In the Netherlands, some flower stalls and vending machines only accept contactless credit cards; cash is completely out of the picture. Some fitness centers and yoga studios have integrated contactless credit cards into their entry turnstiles; the requirement to carry a membership card has been eliminated.