Coronavirus pushes consumers to increase digital wallet usage
Commonwealth of Australia (CBA) reports digital wallet users spent a AUS$1 billion (about $630 million) in March 2020, a high for the bank that's part of an acceleration to digital wallets and contactless cards during the coronavirus crisis.
CBA’s digital wallet transaction dollar volume in March 2020 increased by 17% from February 2020 and outpaced its average monthly compound growth rate of 6.7% over the past six months. The number of individual digital wallet transactions also increased at a faster rate, up 8% in March over February’s totals and faster than the previous six months average monthly compound rate of 4.4%. Overall, there were 36 million digital wallet transactions in March, up from 33 million in February and they exceeded the prior record of 34 million in December 2019.
“The growth in the number of contactless purchases has been increasing since the introduction of Apple Pay last year, however it’s now evident that even more people regard it as a safe and secure way to pay in this environment,” said Kate Crous, executive general manager of everyday banking at Commonwealth Bank of Australia in a press release.
Consumers are flocking to payment alternatives to cash as news stories arise questioning the safety of using banknotes for the fear of transmitting coronavirus. Additionally some restaurants are taking cash off the menu for their takeout and drive thru services.
Mastercard has is increasing contactless spend limits across the globe to entice more consumers to use its contactless cards for in-store transactions. Earlier in April Mastercard raised its contactless limit in Canada from CA$100 (about $70) to CA$250 (about $175). In March Mastercard raised its contactless limit across 29 countries with most Eurozone countries going to €50 (about $57) following a similar move by Barclaycard to raise its contactless limit in the UK to £45 (about $53) and Dutch banks to raise their limits as well.
Similarly digital wallets have begun to flourish not only in usage but also in number. Huawei technologies just introduced its mobile wallet Huawei Pay to Singapore to compete with Apple Pay, its second foreign market after expanding into Russia in 2019.
“In the current environment, paying without cash is an important way to protect yourself and others against the spread of coronavirus. The increased contactless card limit is a fantastic step, however where possible we’re encouraging our customers to use digital wallets as they have the added safety of not needing to enter a PIN on the PIN Pad no matter how much they spend, as it instead leverages touch ID or Face ID,” said Crous.