Impact of COVID-19 on Payment Industry
                     Impact of 
COVID-19 
on Payment 
Industry
Presenter: Srishti Dey
Date: July 01, 2020
Agenda
• Introduction
• Impact of e-commerce on 
payment industry
• Adoption of Digital Methods
• Implication of Digital Payments
• Key Takeaways
• Conclusion
• Q&A
• Major impact on the mobile payments 
industry
• Consumers and businesses have been 
Introductio forced to drastically change their purchasing 
habits 
n • Banking industry works to maintain cash access, while keeping customers safe
• The economic and human impact of this 
pandemic is significant
• Drastic change on the way consumers shop
• Cautious about shopping in public places
Introductio • Work from home causing changes in shopping and making payments
n • Challenges in handling for both merchants and payment processors
Urge to be 
more 
cashless
About 38% of consumers 
now see contactless as a 
basic need or feature of 
payments, up from 30% 
a year ago.
Source: The Futurist Group
• Ready to embrace digital and contactless 
Urge to be payments. • New research suggests traditionally 
distrustful U.S. consumers are becoming 
more more interested in contactless payments 
• In Germany, more than half of payments 
cashless currently made by card are contactless, compared with 35% before the coronavirus 
crisis hit.
Source: German Credit Agency (DK)
• Less physical interaction and are more 
secure. 
Urge to be • However, according to one study, credit 
cards carry more types of bacteria than 
more even coins or cash, while smartphones can be “a haven for germs”. 
cashless • That’s why some experts still recommend keeping extra cash on hand, since banks are 
already taking steps to make sure any cash 
they handle is sanitized.
Source: Bain Analysis
• More consumers have turned to online 
Impact of shopping 
• Groceries and household essentials as new 
e- categories
• Online retailers will experience a long-term 
commerce boost• New opportunities bring new risks
Risks of e-
commerce
• Supply Chain
• Threat of Existing Giants
• Card Fraud Risks
In a survey of 1,068 U.S. adults, 
TransUnion found 22% have been 
targeted by digital fraud related to 
coronavirus, while the number of active 
phishing sites skyrocketed from 149,000 
in January to more than 500,000 in mid-
March, according to a new report from 
Atlas VPN.
Source: TransUnion
Visa says contactless 
use surged amid 
COVID-19
• Surge in Tap n Pay usage with 31 million 
U.S. consumers using a contactless Visa 
card or digital wallet in March 2020
• It compares with 25 million in 
November 2019, and overall contactless 
usage is up 150% since March 2019
• US has 175 million contactless cards, 
the largest number in any international 
market and nine of the top 10 issuers 
are actively rolling out contactless cards 
to their members
Source: MobilePaymentsToday
Mastercard study 
shows COVID-related 
shift to contactless
• The global survey shows 79% of consumers 
are using contactless payments, citing 
safety and cleanliness as the key driver
• The study shows a huge increase in concern 
over cash usage, with 82% of respondents 
stating contactless is a cleaner way to pay. 
Contactless payments are up 10% over any 
other in-person payment method. 
• In addition, 74% plan to continue to use 
contactless after the pandemic is brought 
under control.
• The survey was based on online interviews 
of 17,000 consumers in 19 countries 
worldwide
Source: MobilePaymentsToday
Digital Payment 
Methods
• Digital Wallets
• Contactless Card Payments
• SMS Payments
• Tap-n-Pay
• Perceptions may change payment behavior 
by users and firms
Implicatio • In the medium run, the outbreak can lead to 
both higher precautionary holdings of cash 
ns for by consumers and a structural increase in the use of mobile, card and online 
digital payments. • Differ across geographies, and consumers
payments • Not all digital payments are immune• Recently, authorities, banks and card 
networks in many countries have set higher 
transaction limits for contactless payments.
• Payment solution where no physical contact 
of the same object by multiple persons 
takes place are potential solutions
Solutions • Online payments for e-commerce are of 
course not open to the virus transmission. 
of digital • In many of the emerging market and developing economies where authorities 
payments have recently called for greater use of digital payments, access to such alternatives is far 
from universal. This could remain an 
important debate going forward, potentially 
asking for a strengthening of the role of 
cash.
Factors 
leading to 
adoption • Cash loses value• Growth of e-commerce and m-commerce 
during coronavirus outbreak
of digital 
payments
Merchant Considerations 
for Protecting Payments 
during COVID – 19 crises
• Reliability
• Customer Payment Journey
• Safety
• Public concerned about transmission of 
coronavirus by cash
• Scientific evidence suggests that the 
probability of transmission via banknotes is 
low when compared with other frequently-
touched objects, such as credit card 
terminals or PIN pads
Key • To bolster trust in cash, central banks are actively communicating, urging continued 
acceptance of cash and, in some instances, 
Takeaways sterilising or quarantining banknotes. Some encourage contactless payments. 
• Looking ahead, developments could speed 
up the shift toward digital payments. This 
could open a divide in access to payments 
instruments, which could negatively impact 
unbanked and older consumers. The 
pandemic may amplify calls to defend the 
role of cash – but also calls for central bank 
digital currencies.
• Slow rate of adoption until 2019. 
• COVID-19 pandemic increased the adoption 
of digital payment solutions significantly. 
• Various economies at different stages of 
development across the world; the 
outbreak has forced people to change their 
Concludin shopping habits, paving the way for digital payments.
• We can hope that the coronavirus crisis will 
g lines be eliminated soon, but the ever-growing 
number of smartphone users will drive the 
growth of digital payment in the future. 
• As more competitors will come up with 
digital payment platforms, customers will 
certainly get an improved experience. Be it 
a digital wallet or other contactless 
methods, the digital payment solutions are 
here to stay.
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