Business management

How has coronavirus changed payment behaviour?

We’re being encouraged to go contactless in the fight against Covid-19, but will it change the way consumers shop in the future?

We are using 50% less cash than we were a month ago, according to ATM network operator Link. The fear of contracting coronavirus has made retailers and shoppers automatically turn to alternative, hygienically safer ways to pay. In this strange new world of social distancing, it’s never been more appropriate to go contactless.

Of course, since the government’s edicts to shut all restaurants, bars and then shops selling ‘non-essential’ goods, there are only a handful of physical places to spend money anyway.

But we can still buy from food stores, pharmacies, post offices and petrol stations. These businesses are having to find ways to avoid taking your cash – and even some digital payment methods.

“The problem is we are using less cash, but contamination risks remain,” says Steve Cocheo, executive editor of digital finance magazine The Financial Brand. “Someone with Covid-19 hands a cashier their card. You’re next and when the cashier hands you your credit card back, it may come back with viral matter smeared all over it. Then there’s the ATM touchscreen, debit cards, point-of-sale terminals with keypads, a pen to sign a bill with. There’s no traditional payment mechanism that doesn’t expose both parties to infection.”

Contactless limit up

Nationwide measures have already been introduced to encourage payment without contact. From 1 April, months earlier than originally planned, the British Retail Consortium raised the national contactless card payment limit from £30 to £45, a move welcomed by UK Finance CEO Stephen Jones, who said: “This will give more people the choice to opt for the speed and convenience of purchasing goods using their contactless card, helping to cut queues at the checkout.”

Even before the coronavirus pandemic, the popularity of contactless was booming, with it accounting for 50% of all debit card payments last year for the first time. Now faced with the threat of Covid-19, the major food stores have taken additional steps to protect staff and customers by minimising contact at the checkout – for example at M&S. “You can use our Mobile Pay Go app in some stores,” says M&S corporate communications co-ordinator Emma Brown. “We’re asking people to take advantage of the increase in the contactless payment limit – and to use their loyalty cards differently too. We’re asking them not to scan their Sparks cards in store, but to go on to the website to add their loyalty points when they get home.”

To prevent further unnecessary close physical contact, M&S is positioning staff outside stores to greet customers and manage numbers entering stores, has put up ‘sneeze guards’ around the tills and extended its exchange-and-returns policy to 90 days to stop customers coming in with non-food-related queries.

At Sainsbury’s, customers are asked to use cards at tills and only use cash at self-service checkouts, where notes and coins go directly into a secure machine. “We will be closing every other payment point in our supermarkets, convenience stores and petrol filling stations,” says communications manager Ellie Denison, “so that we can keep people further apart.”

Life-saving apps

Most major retailers are also recommending shoppers use phone payment apps such as Apple Pay, Samsung Pay and Google Pay, which have no spending limit unless individual retailers impose one – and no major UK supermarket does.

On many petrol forecourts you can already pay for fuel remotely – BP, Shell and Esso all have payment apps that were designed to save motorists the inconvenience of entering the shop or even paying at the pump. But those apps could now save lives, too, by combining this new technology with an old-fashioned, hitherto outdated service: a petrol pump attendant.

“We are asking all customers to stay in their vehicles and wait for our forecourt attendant to fill up their cars,” says Martin Holmes, who runs JS Holmes service station in the village of Wisbech St Mary, Cambridgeshire. “That way only we touch the pump and you won’t even need to get out of your car. It’s the best way to keep everyone as safe as possible.”

We’re asking people to take advantage of the increase in the contactless payment limit – and not to scan their Sparks cards in store, but to go on to the website to add their loyalty points at home

Emma Brown
Corporate communications co-ordinator, Marks & Spencer

Pharmacists, too, are being encouraged to take contactless payments as much as possible. “Handle cash with care and encourage contactless payments – use gloves or wash hands after each transaction and after cashing up,” the Royal Pharmaceutical Society has urged its members.

Many outlets of course have access to only normal point-of-sale contactless machines, but one legacy of the current crisis is that it will change the way Britons pay – not only accelerating the long-predicted demise of cash, but readying them to embrace more inventive payment methods when we can all socialise again.

For example, at Henry’s Cafe Bar in London’s Piccadilly, before the lockdown punters were able to pull their own pints and pay with a contactless card at the bottom of the pump; at the Blue Cross, dogs wearing special fundraising coats with contactless technology have been used to collect donations for the charity; at Cancer Research, passers-by have been able to donate money by tapping a bank card on the window of some of its charity shops; and at fashion retailer Zara in Westfield, east London, shoppers have been able to buy clothing by paying iPad-carrying staff who serve as mobile checkouts.

The need for financial inclusion

The holy grail of contactless payments may ultimately come, as so many items do at the moment, from Amazon. Customers at its prototype AmazonGo stores in the US can just pick up their items, including groceries, and leave – a system it has branded ‘Just Walk Out’ – without actively presenting any payment device at all. On launching the store format, an Amazon spokesperson said: “Just Walk Out technology automatically detects when products are taken from or returned to the shelves – and keeps track of them in a virtual cart.” Once finished, shoppers simply leave the store with their chosen products and their Amazon account is debited later.

However, there are caveats to the advance of a contactless society, even in these contamination-conscious days. Regulators, retailers and lawmakers need to be mindful that around 1.2 million adults in the UK, most of them among the poorest or most vulnerable Britons, do not have a bank account, a situation that already costs them an estimated £485 a year in lost Direct Debit and online deal savings.

“We are concerned this will leave many vulnerable people unable to pay for the basics they need,” says Gareth Shaw, head of money at Which?. “Both the government and retailers need to find a way to ensure that the millions of people who rely on cash, and may not have a bank card, can still pay for essentials during this difficult time.”

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