Apple Pay basically put touchless payments on the map in 2014, and then numerous other competitors started offer their related own payment products. American consumers have been somewhat reluctant to climb aboard, but innovations keep the touchless trend moving forward.
America Plays Catch-Up
The United States is late to the party, however, just as it was when pin and chip credit card technology debuted. Touchless payment systems or contactless credit cards still seem exotic in the USA. But in Canada, Australia, and some EU nations the technology is already mainstream. Visa reports that nearly half of its in-person credit card transactions are contactless, in places other than the United States. In Australia, 90 percent are touchless. Meanwhile, many transactions in the USA still involve swiping cards that have a magnetic strip – a method considered obsolete in much of the world. Instead of being an early adopter, the world’s leading economy has lagged behind – despite the fact that touchless transactions are faster and translate into more completed sales in less time, with less effort.
2019 is a Pivotal Year
That’s all expected to change over the next few months. The Financial Times reported that during 2019 contactless or touchless credit cards will begin a full-scale rollout in the United States. Visa plans to issue 100 million contactless cards this year, and Mastercard plans to introduce touchless cards to its customers over the next two years. JPMorgan Chase appears to have a head start, and has announced that it will migrate all of its cardholders to contactless cards by the end of this year. Chase, incidentally, already offers touchless mobile payments via a smartphone app.
An Increasingly Crowded Field
Huawei is expected to show the fastest growth in the touchless sector over the next few years, and Timex, Fitbit, and Fossil are noteworthy contenders. Discover has also been working with Garmin to provide contactless payments on new lifestyle watches. But companies that make wearable devices and must partner with 3rd parties to add touchless payment technology typically encounter resistance . That’s because consumers do not want the inconvenience of having to shop around to sign-up for touchless service. Companies like Apple, on the other hand, have already made inroads as payment processing and technology leaders. Those companies will likely dominate the market for touchless payments, as well. It’s no surprise, for instance, that Apple Watch is in the lead in the touchless payment and wearables market.
Established Leaders Will Continue to Dominate
Tech giants like Apple, Google, and Amazon already have their own payment services, large user bases, and brand allegiance as trusted innovators. They have market dominance and technological infrastructure to scale-up with the least amount of friction or investment. They can simply introduce services and then migrate customers to whatever new touchless payment platforms and features they decide to launch. Amazon Pay, for instance, easily converted half of its users because they were already signed-up for Amazon Prime. Success breeds success, and that will likely hold true as the touchless payment market grows, evolves, and becomes a mainstream phenomenon.