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Contactless Payments Surpass E-Commerce to Impact Consumer Spending

Swiss watchmaker Swatch said Monday that it had signed an agreement with Visa that will enable it to sell a timepiece designed to make contactless payments in the U.S., Switzerland and Brazil starting early next year.

It’s the latest indicator that mobile payments are gaining momentum and, as more options become available, usage is set to surge. According to Can Capital, a New York-based small-business financing company, 47 percent of respondents who participated in an October survey agreed that mobile payments were having the biggest impact on consumer spending habits at retail.

The research, based on the sentiments of 166 payments and financial innovation professionals at this year’s Money 20/20 conference in Las Vegas, found that e-commerce ranked second—at 35 percent—in terms of impacting consumer spending (slipping 23 percent from last year’s top spot), while personalized marketing and advertisements came in third with 18 percent.

Can Capital attributed the shift to the launch of such mobile-payment products as Apple Pay, Samsung Pay and Chase Pay over the past year, pointing out that eMarketer data said that total mobile payment transactions are expected to surpass $27 billion in 2016.

Despite the rising popularity of mobile payments (not to mention the lingering memories of massive data breaches at Target and Home Depot), 58 percent of respondents agreed that debit or credit card transactions at the point of sale remain the most secure form of payment. By comparison, 20 percent said contactless payments were the safest.

“These results show just how rapidly technology is changing the payments landscape for small businesses and consumers alike,” said Daniel DeMeo, Can Capital’s chief executive officer, pointing out that, “Especially for small businesses, it can be costly to keep up with these technologies in order to offer consumers the choices they prefer when walking up to the cash register.”

When asked about the biggest challenge in payments processing facing small businesses, 49 percent of respondents said transaction fees, followed by changing to chip-enabled card technology (27 percent) and data breaches (24 percent).