If there is one thing the Covid-19 pandemic has shown us, it is the need to be adaptable. It seems that most individuals, communities, and businesses are coming out of the initial shock, and are starting to adjust to these changes in our current day-to-day lives, and planning for a “new normal.”
Brick and mortar retail is one industry that is being shaken particularly hard. With many storefronts closed, or offering limited services to minimize exposure risks, owners and operators are realizing they must undergo a digital transformation to future proof their businesses. This need is not particularly new, but Covid-19 is accelerating these changes, pushing retailers to be nimble and move faster than ever before.
Societies are adjusting by encouraging cashless, contactless retail environments. In addition to credit card companies raising spending limits, we also anticipate a surge in NFC (Near Field Communication) tap technology adoption.
History has shown us that it is very hard to “put the genie back into the bottle” once it has been released. As we saw in India in 2016 after a major cash crunch, e-payments soared and had a persistent effect on the use of electronic payments after the crisis was managed. It’s very likely that this adjustment to NFC technology will stick around.
In fact, a recent study suggests that the contactless payment market will grow from USD 10.3 billion in 2020 to USD 18.0 billion by 2025 at a compound annual growth rate (CAGR) of +11.7% during the forecast period (2020-2025) —with the retail market projected as the vertical to hold the largest market size during this forecast period. We believe it!
As more businesses adopt these features, it will become an industry standard and others will need to keep up to survive.
Also known as tap technology, NFC (Near Field Communication) technology is a method of wireless data transfer that detects and then enables technology in close proximity to communicate without the need for an internet connection. You have likely seen NFC at the point of sale for payments, as well as check-in services, ticketing, etc.
NFC technology has been deemed one of the safest ways to make payments, as it is immune to credit card skimming technology (where cyber thieves can collect your account number when you swipe your card) and uses sophisticated encryption to protect your account data.
A lot of hurdles stem from a lack of knowledge of NFC technology. There is concern over cost and having the right IT support, as well as the required efforts to train staff. But integration into current legacy systems, at a low cost and with minimal training is absolutely possible.
Did you know? As of 2018, only an estimated 3% of cards in the U.S. are contactless? That compares to roughly 64% in the U.K. and as high as 96% in South Korea.
Consumers are growing more aware of the bacteria on cash and credit cards (credit cards actually possess a greater variety of bacteria than cash!) and are avoiding these modes of payment. In order to keep up with consumer expectations and stay relevant, US retailers will have to adopt new technologies, whether they were ready to or not.
To continue our conversation on sanitation, NFC removes or minimizes human contact—supporting a contactless, cashless environment.
During the Covid-19 crisis, brick and mortar businesses have been offering services such as curbside pick-up and delivery to abide by social distancing expectations, and encouraging cashless payments through tap technology or pre-payments online.
However, it has become quite clear that these reactionary processes are incredibly flawed, as they still involve a manual process between retailer and consumer. For example, even if the consumer paid online, these measures are shattered when they exchange a paper receipt, ID, or payment cards during pick up or delivery.
To support the recovery of brick and mortar retail, Loop developed a transformative solution that merges its artificial intelligence software with NFC hardware to create a seamless, contactless customer/vendor interaction at the point of sale. Its ability to read the customer’s ID through their wallet pass verifies the transaction, and ensures the right product is in the hands of the right person.
After Covid-19, we will be entering into a new normal— with new consumer expectations. In order to bring customers back into brick and mortar stores, we need to curate a safe, secure, and trusted environment.