Contactless payments’ share up 6x

MUMBAI: The share of contactless payments in total face-to-face (F2F) card transactions grew by more than six times between December 2018 and December last year. Usage has gone up, driven by improvement in cards, acceptance infrastructure and awareness, particularly during the pandemic. Contactless payment refers to the use of near field communication (NFC) technology in cards for payment without having to swipe the card. This form of payment is also called ‘tap and pay’.

According to a whitepaper report on the growth of contactless payments adoption in India by Visa in partnership with payments processor Worldline, the share of contactless in card transactions rose from less than 2.5% in December 2018 to 16% in December 2021.

“This mode of less-touch payments in stores ensured consumer safety, a necessity since the pandemic. Additionally, the adoption of EMV chip cards has been pivotal for the growth of contactless payments, aided by supportive regulations that increased the contactless limit in India to Rs 5,000 in 2021,” the report said.

According to the report, the highest adoption of contactless payments was observed in sectors like quick service restaurants, pharmacies, and food & grocery, which accelerated with the impact of the pandemic.

According to Worldline India, while 25% of all transactions at supermarkets were contactless in January 2020, these rose to 31% by January 2022. The usage stepped up across India with metro cities leading the way. In 2020 and 2021, Delhi NCR, Karnataka, Gujarat and Telangana had the highest proportion of contactless transactions and penetration, across both debit and credit cards.

The ‘Worldline India Digital Payments Report 2021’ has shown that, while cards contribute to 26% of all digital transactions, they generate 53% of the value of all digital commerce.

“The rapid adoption of contactless payments in the past few years is testament to the rise in acceptance of safer and faster forms of cashless payments across consumer segments. We have observed that the key drivers of contactless growth — availability, convenience, utility, and security — will continue to aid adoption,” said Ramakrishnan Gopalan, vice-president & head (products & solutions) for India & South Asia, Visa.