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COVID-19 is changing digital payment trends

Global Trends
6 Mins.

The COVID-19 pandemic has been a turning point for the payments industry. As the popularity of digital payment methods continues to grow, we take a closer look at one of the companies ensuring that our digital transactions are made securely.

The adoption of digital and contactless payment solutions by consumers has been rapidly accelerated by the current pandemic. While the growth in digital payment was an existing trend, the new surge in demand has been clearly visible across Europe. Card network Visa has reported that it has processed an additional 500 million touch-free transactions in 29 European countries since contactless payment limits were increased,1 and a global study from Mastercard notes a 40% increase in contactless payments during the first quarter of 2020.2

However, contrary to public perception, this change has not come at the expense of physical currency, as cash demand also saw a surge in the early stages of the pandemic. The amount of euros in circulation rose by €41.2 billion in the four weeks before April 10 – the biggest jump since the 2008 financial crisis.3

The key message here is that consumers have the choice to use whichever payment method they prefer. And this is a trend that is set to continue beyond the pandemic, according to Netcetera CEO Andrej Vckovski. He says, “People using cards preferred contactless because they could tap the terminal or even use their mobile phones. This trend is set to last beyond the crisis.”


Combining security and convenience

Netcetera, the Zurich-based software company and digital payment expert, was founded in 1996 and now supplies over 2000 banks with mobile payment apps and solutions. G+D recently invested in the company as part of its aim to meet the growing global demand for secure electronic payment methods.

Discussing the investment, Dr. Ralf Wintergerst, G+D Group CEO, says, “Together with Netcetera we want to enhance our portfolio with supplemental innovative software products for digital payment.”

Crucially, customers want to have the same confidence when making a payment digitally or with physical currency. Vckovski claims that trust is a key factor in the success of mobile payment methods. And trust is driven by adequate security and even more by adoption.

“Convenience is the magic ingredient that encourages people to adopt things more quickly, which in turn generates trust and more adoption“
Andrej Vckovski
CEO, Netcetera

He says, “It is a little bit of a chicken-and-egg situation, because we see trust is important for widespread adoption, but widespread adoption also helps to generate trust. Convenience is the magic ingredient that encourages people to adopt things more quickly, which in turn generates trust and more adoption.”


The inclusion of near-field communication (NFC) technologies on mobile devices significantly helped to tip the balance in favor of convenience for consumers, making contactless payments much simpler. “The industry had been trying to bring mobile payments to the market for more than 20 years – even when phones had very limited features, such as SMS,” says Vckovski. “No one really cracked this aspect until we had smartphones. Now that smartphones have NFC, I think we are seeing a transition because it is convenient.”

Making digital payment methods seamless

Any new security measures need to take convenience for the consumer into account, to make digital commerce as seamless as its brick-and-mortar counterpart. The latest generation of EMV® 3-D Secure verification provides greater user-friendliness to the e-commerce security standard. It simplifies the checkout process and allows for one-click purchases in certain instances.

Tokenization is also becoming increasingly popular and replaces a customer’s credit card details with a randomly generated secure code in mobile payment apps and on online platforms. This allows the card details to be passed across wireless networks without the risk of any details being exposed and creates opportunities for delivering additional services, such as automatically updating card information upon renewal. Research predicts that revenues from tokenized payments will exceed $40 billion by 2024.4

As electronic payments take on an increasingly important role in the global economy, payment software companies such as Netcetera will be relied upon to develop innovative security features, which continue to bring convenience to the customer. As Vckovski says, “You only need three things for digital payments to succeed, and that is convenience, convenience and convenience.”

  1. Visa report, “European contactless limits increase,” 2020

  2. Mastercard study, “Consumers moving to contactless payments,” 2020

  3. Financial Times, “Cash demand surges in Europe,” 2020

  4. Juniper research, “Remote tokenisation scales up,” 2020

Published: 18/11/2020

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