While most countries of the world are struggling with the coronavirus rampage, the discussions around "safe payments" is gathering momentum. And this time, there is a whole new dimension added to the "safe payments" terminology.
The cacophony around cyber-security and internet theft has taken a back seat, and the digital payment gurus are now brainstorming over contactless payments that prevent the virus from finding new hosts.
Truth be told, contactless payments seem like the most viable option at this unpredictable and catastrophic juncture. While the world population is still getting accustomed to the cashless payment methods, let's analyse the different aspects of it.
Pros Of Contactless Pay
Not all of us have free cash lying around to pay the bills. Here's a little snapshot of the benefits of contactless payments during COVID-19.
Containment Of The Virus
The biggest aid that contactless payments can offer during the current crisis is to prohibit the spread of the virus. Pin entry pads and banknotes are potential transmission sources and can lead to an uncontrolled perpetuation of infections.
Due to zero or almost no physical contact between transacting parties, contactless payments are one of the most coveted payment methods in the face of the pandemic.
Bygone Queues And Long Waiting Hours
The sudden surge in the usage of e-payments and digital wallets ensure quick payment service at the POS (Point of Sale) terminals. "Tap and go" is taking over supermarkets and convenience stores by storm, and by eliminating queues, it also helps maintain social distancing.
Carving Out The New Normal
The coronavirus pandemic has indeed turned our lives upside down, but there are some silver linings tagged to it that we cannot ignore. The global crisis that brought everything to a standstill is helping us transition to a new normal.
While young millennials seemed to be quite adept at using digital forms of payments, it was the elderly that were reluctant and needed a bit of a hand-holding. As per the surveys held in several cash-dependent economies, consumers are willing to continue with contactless payments even after the pandemic has run its course.
Slow And Steady Elimination Of Cash
Whether or not cash is good for the economy is still debatable. But it does involve printing and other production or storage-related costs. Also, a cashless economy is relatively less prone to money laundering and tax evasion.
Credit Cards To The Rescue
COVID-19 is not just a health hazard. It has ransacked some of the most powerful pillars of the global economy, thereby leading to pay cuts and job terminations.
Several financial institutions are offering a line of credit to those who are in dire need of money at a three-month moratorium period. Even people with a poor credit score are being offered a credit card no credit check facility to survive these turbulent times.
Spoilt For Choice
Contactless payments offer a multitude of payment options to consumers, from contactless and NFC chip-enabled cards to smartphone-based payment apps.
These digital payment methods are safeguarded by KYC verification, remote blocking, PIN/OTP based authentication to ensure online safety and data protection.
Loyalty Benefits And Other Offers
Credit card companies and digital wallets offer loyalty points and cash back rewards on almost every transaction. This may seem trivial at a glance, but a lot of customers derive umpteen benefits out of the accumulated points, especially when most companies are not charging any additional transaction fees.
Short-Term Interest-Free Loans
Even customers with a poor credit profile can seek payday loans bad credit to help them endure a cash emergency. These short-term loans offer a quick cash disbursement at zero interest by paying a monthly membership fee.
Moreover, availing an interest-free loan acts as a safety net to those who are not in a position to opt for high-interest loans and couldn't keep up a healthy credit score either.
The Cons Of Contactless Pay
Contactless pay seems like a true saviour in these distressing times. But if you're not responsible with your money, it can have some serious consequences.
Increase In Credit Card Defaulters
While it is only human to get carried away by the "buy now and pay later" schemes, the onus of repayment lies with the user.
If you have opted for a grace period, you must be cognizant of the fact that the interest keeps accruing on the outstanding bill from the payment date itself. Apart from that, there is a hefty fine imposed on the defaulters.
Lack Of Control And Overspending
There is an age-old saying in the financial paradigm, "If you can't touch it, you don't own it." Easy and swift digital payment methods lure you into spending more than you need, so much so that you lose track of expenditures.
Technology comes at a price, and if you are not wise enough to understand that, it can hit you hard at the end of the month with devastating bills.
Online Fraud And Data Theft
The economic slowdown has rendered millions of people jobless, and this can lead to a substantial increase in money laundering and cybercrimes.
Although banks and financial institutions take every precaution to protect customer data and prevent any fraudulent activities, no system is full proof. Tight surveillance and ensuring customer awareness seem like the only plausible way-outs to curtail these incidents.
High-Value Transactions
To block unwanted theft and intrusion, most banks and card companies set up a higher limit for contactless payments. Because these payments do not require a pin entry, they become more vulnerable to such unwanted incidents. The "tap and go" limits might cause a bit of an inconvenience while shopping especially for high-value transactions.
Conclusion
To sum it up, contactless payments are simply inevitable during the pandemic. Many people are still adamant about using cash, so it's not likely that paper money will disappear altogether. But despite the downsides of going cashless, the future is undoubtedly digital.
While cash-less payments may seem like a momentary switch to contain the virus, its simplicity and ease of use will outlive the pandemic for sure.
