Retail Trends: Contactless Credit Cards, BNPL, and More

by Lyle Daly | Updated July 21, 2021 - First published on Sept. 4, 2020

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Someone pays with a contactless credit card.

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Retail trends constantly evolve, but the COVID-19 pandemic has put a few of these changes into overdrive.

Coronavirus is changing payment habits and how people shop. A greater focus on hygiene has led to much more interest in checking out without handling cash or touching payment terminals that see hundreds of transactions per day. Social distancing measures have driven more of us to shop from home. And financial uncertainty may be a factor in the growth of interest-free payment plans.

While the retail world has seen all kinds of changes due to the pandemic, these are the trends that have stood out most.

The rise of contactless payments

From a hygiene perspective, the typical checkout process isn't ideal. If you pay by credit or debit, you swipe or insert your card into a card reader, and possibly hand it to the cashier. You may also have to touch the same keypad as all the shoppers before you. Paying by cash, of course, isn't any better, since bills and coins carry germs well.

Fortunately, there's an obvious solution: contactless payments. You only have to hold your card over the payment terminal for a few seconds, or tap a pad with your card.

In our research on contactless payments, we found that this transaction type increased by 40% worldwide in the first quarter of 2020. Even in the United States, often slow to adopt new payment technologies, contactless payments shot up 150% from March 2019 to March 2020.

This likely won't be a temporary change, because 74% of people who use contactless payments said they plan to continue doing so after the pandemic. Contactless capability may already have gone from a nice extra feature to a must-have for all the top credit cards.

More use of buy now, pay later services

Buy now, pay later (BNPL) services work exactly as the name suggests. You make a purchase, but instead of paying in full, you set up an installment plan to pay it off interest-free. Unlike other financing options such as credit cards and loans, BNPL services generally don't require a credit check.

This type of service has grown in popularity in recent years, and according to our study of BNPL services, 20.83% of those who had used a BNPL service first did so this year.

There's a strong possibility that some of those BNPL users turned to it because of COVID-19, because they were dealing with income loss, or because they wanted to keep more cash on hand.

Grocery deliveries and pickups have skyrocketed

Like contactless payments, grocery deliveries and pickups are a retail trend accelerated by the pandemic. Many people were adopting these services, but COVID-19 was a huge push in that direction for everyone who was on the fence or hadn't given it a try.

Data from Bricks Meets Click shopping surveys shows just how much grocery deliveries and pickups have surged. In August 2019, there were 16.1 million active customers and $1.2 billion in sales over the previous 30 days for online grocery deliveries and pickups. By June 2020, those numbers had gone up to 45.6 million active customers and $7.2 billion in sales.

Ordering your groceries online is obviously better from a social-distancing perspective. While that may have been many people's initial motivation, the convenience of stocking up without a trip to the store could be what keeps them coming back.

What's most interesting about retail trends during the coronavirus pandemic is how much faster changes are happening. People likely would have gravitated toward contactless payments, BNPL services, and online grocery orders anyway. However, because of COVID-19, shifts that may have taken years have happened in months.

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