E-commerce has boomed in the past few months, thanks to the COVID-19 pandemic.
As the coronavirus outbreak has been forcing us to stay indoors and increasingly resort to cashless payments, transactions in the form of cards or e-wallets are becoming a norm. Digital payments have been actively rising in the United States as people are making transactions online.
Precautionary measures set by the government compelled people to avoid physical contact, which aggravates the risk of COVID-19 transmission. People are opting for touch-free transactions across different merchants and platforms, even for daily requirements, such as groceries, pharmacies, gaming, recharges and utility payments, etc.
Globally, seven in 10 consumers say the shift to digital payments will likely be permanent and nearly half of consumers plan to go cashless after the pandemic subsides, according to a Mastercard weekly survey launched on Apr 27.
The industry players are gaining traction as digital payments are becoming the new normal. They are even taking up initiatives that will help them boost their business and make online purchases easier for customers.
In response to this, the leading companies, such as American Express Company AXP, Discover Financial Services DFS, Mastercard Incorporated MA and Visa Inc. V are making efforts to expand the Click-to-Pay online checkout, based on the EMV Secure Remote Commerce industry standard. Click to Pay is a digital checkout solution that provides enriched checkout experiences to consumers. Click to Pay aims to make transactions more secure and seamless for customers across web, mobile sites, mobile applications and connected devices.
The bigwigs will penetrate the territories of Australia, Brazil, Canada, Hong Kong, Ireland, Kuwait, Malaysia, Mexico, New Zealand, Qatar, Saudi Arabia, Singapore, United Arab Emirates and the United Kingdom among others. This breakthrough will basically do away with the key entries of personal account numbers and information at checkout. Consumers will benefit from this streamlined experience, which includes a consistent, interoperable checkout experience at physical stores.
The initiative seems well-timed as people are now relying more on digital payments for most day-to-day activities. The aforementioned companies announced the universal digital checkout solution in the United States during October 2019 and more than 10000 merchants gave its customers the option to click to pay ever since. Cinemark, Crate & Barrel, Expedia, Fresh Direct, et al are just to name a few in this regard.
Merchants will also be able to use a single virtual terminal for various card brands, which assure better digital checkout experiences for customers. To boost the card acceptance, each network has been coordinating with its respective payments service providers, gateways and acquirers across the ecosystem to facilitate a smooth online checkout that is compatible with all participating networks.
In the United States, partners like ACI Worldwide, Aurus, Blackbaud, BlueSnap, Braintree (a PayPal Service), Cybersource, Global Payments, Mastercard Payment Gateway Services and Square are offering their merchants the choice to use Click to Pay.
We expect this initiative to be a boon for Financial Transaction Services industry, which currently carries a Zacks Industry Rank within the top 16% (41 of 252).
Year to date, the industry has lost 2%, comparing unfavorably with the S&P Index’s growth of 0.3%.