The percentage of contactless transactions within the total face-to-face (F2F) transactions grew by more than six times in three years. Contactless transactions represented 2.5 per cent of the total F2F transactions in 2018, and at the end of 2021, it represented 16 per cent of the total F2F transactions, according to new report by Visa and Worldline India.
The report titled India taps into a Contactless Future analyses India’s journey into contactless payments and in which segments consumers used this payment method.
Ramakrishnan Gopalan, vice-president, head of products and solutions, for India and South Asia, Visa says: “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.
Gopalan said they observed payment avenues and came to the conclusion that the key drivers of contactless payment growth was due to various reasons, such as availability, convenience, utility, security, and others. He said they are confident that these various factors will continue to aid the contactless payment adoption at scale as they become ubiquitous.
“We are confident that it is a sustainable payment solution for seamless face-to-face transactions, and will help greatly in reaching the goal of a less-cash society,” he adds.
Pranay Jhaveri, managing director - India & South Asia, Euronet Worldwide said that the shift to contactless payments, exponentially accelerated by the pandemic, is here to stay.
“We believe that India is firmly on the trajectory to be the fastest-growing digital payments market in the world. The deployment of NFC-enabled terminals has continued to grow, indicating a marked change in both consumer as well as merchant behaviour. With the rising demand from consumers, the relative expansion of merchants accepting contactless payments has also contributed to the growth of contactless transactions over time,” Jhaveri says.
“Technology and regulatory changes have played a major role in enabling this switch to contactless payments. With easier and more secure customer interfaces, the prevalence of contactless payments will only continue to grow in the years to come,” he adds.
Here are some of the key highlights of the report:
Spending Area: The report said that Indian consumers opted for contactless card payments, mostly in the quick service restaurants, pharmacies, food, grocery, entertainment and other sectors.
According to Worldline India data, 25 per cent of all transactions in supermarkets were done using contactless card payments as of January 2020. This number rose to 31 per cent by January 2022.
Sunil Rongala, senior vice-president, strategy, innovation and analytics, Worldline India said that contactless payments have shifted from being a choice to a matter of necessity in recent times, adding that he is hopeful of its immense future potential.
“Through the pandemic, contactless payments recovered faster than other forms of face-to-face payment due to greater consumer ease and safety. Wider adoption of contactless payments will be an essential component in building smarter payments infrastructure and smarter cities,” he added.
Cities: The report highlighted the fact that metro cities in India were leading the pack behind contactless card payment adoption. Delhi-NCR was the leading city for both debit and credit card based contactless card payments. The other states which were leading in contactless card payments were Maharashtra, Karnataka, Andhra Pradesh, Telangana, Tamil Nadu, Gujarat, Kerala, Haryana, and Uttar Pradesh.
“Maharashtra has shown penetration in growth across debit and credit outside of the principal metro/metro areas in those states. This may be due to augmented card issuance and increased penetration of smartphones that accept contactless payments,” the report said.
The Spending People: The report noted that it was the affluent Indian consumers who were leading this contactless payment solution system. But the mass affluent consumers too have adopted contactless card payments, especially for their daily essential shopping like food, grocery, fuel, medicines, others.
“There is a higher adoption rate for contactless and card-on-delivery options among affluent cardholders with digital-focused personas, such as ecommerce and electronic shoppers, luxury travellers and avid wallet users, for whom convenience and time are important,” the report added.