< PrevNext > 2020 Business Travel Buyer's Handbook Selecting a Corporate Payment System Covid-19 Update: Contactless Payments Surge in Pandemic By Adam Perrotta / June 19, 2018 / Contact Reporter Share Download ChapterWith hygiene and safety concerns expected to be top of mind as business travel resumes, contactless payments could finally gain significant traction, especially in the U.S., which has lagged other markets when it comes to contactless usage. The increased interest in touchless also will likely further boost usage of virtual cards, which already have gained adherents in the corporate payment space thanks to a list of advantages that includes security and spending controls—and to which now can be added hygiene and safety. Near Field Communication (NFC) technology, which enables payments to be made by waving an NFC-equipped physical card or mobile wallet near an NFC point-of-sale (POS) terminal, has been around for more than a decade. But long-ingrained consumer habit toward swiping cards, along with merchants' reluctance to invest in upgrading their POS equipment to accept a payment method that consumers largely didn't need, created a chicken-or-the-egg scenario that bogged down adoption of the technology, particularly in the U.S. But amid consistent promotion from card issuers and gradual cardholder realization of the benefits of contactless, the technology began carving out a foothold in 2019. That existing momentum was turbocharged by the Covid-19 outbreak and attendant rise of social distancing and hygiene principles. Surveys conducted amid the pandemic consistently indicated a surge in consumer preference for being able to make in-person payments without touching a card reader, keypad or pen. On the merchant side, many retailers began actively encouraging contactless payments amid the pandemic due to their own safety and hygiene concerns—and the sudden shift in consumer attitudes is bound to compel even otherwise reluctant merchants to step up adoption of NFC acceptance technology to serve the groundswell of demand. Meanwhile, payment card providers are playing their part too, with all major networks recently raising the amount limits for contactless payment transactions—thereby enabling more purchases to be made without a touch—while issuing banks continue to incorporate NFC technology into the majority of plastic cards they issue.Taken together, all signs point toward the pandemic serving as a tipping point for contactless payments as a whole. That could be particularly good news for organizations, as contactless payments are uniquely well-suited to helping achieve several long-standing goals of corporate T&E and payment programs. With the onus higher than ever on corporate duty of care responsibilities post-Covid, organizations are widely expected to double down on hygiene and safety protocols intended to keep employees safe as corporate travel and spending re-emerges in the wake of the pandemic. The inherent hygienic advantages of touchless payments are among the lowest hanging fruit in achieving safety goals; quite simply, the fewer surfaces travelers need to touch, the less chance of contracting a virus—whether Covid-19 or the common cold. Contactless also is a key tool in helping corporate T&E managers provide their travelers with a more convenient, seamless and "consumer-like" travel and payment experience. That's especially true in markets such as Asia and parts of Europe, where ubiquitous mobile wallets such as Alipay and WeChat Pay have become an integral part of consumers' everyday lives. Even before the Covid pandemic, the travel ecosystem had begun laying the groundwork to incorporate those services, with hotels, airlines, restaurants, ground transport and other end-suppliers adapting their systems to accept the mobile wallet services that are widely expected to play a central role in the next generation of payments on a global scale. Mobile wallets also have proven to be the perfect complement to virtual payment cards, which can be issued and accepted with no physical card involved at any point in the process. Virtual cards offer widely acknowledged benefits, such as easy issuance, spending controls, data capture and one-time use numbers that are useless to criminals in the event of a data breach. But technical limitations long hamstrung virtual cards, especially in the hotel sector, where card numbers had to be sent to a property via fax—a tedious process often ending in confusion and frustration during check-in.Mobile wallets offer a way around such complications by enabling virtual cards to "live" on a traveler's mobile device, which can simply be waved near an NFC terminal at the front desk—a process as simple as checking in with a plastic card. And once loaded onto a mobile device, virtual cards can subsequently be used to make other payments during a trip, such as meals, coffee and ground transport, ensuring all in-trip costs flow directly to corporate spending managers for reconciliation and reporting. Along with placing a premium on ensuring workforce hygiene and safety, the Covid-19 pandemic has spurred many organizations to re-evaluate their travel and spending programs, striving for modernization and increased efficiency. Given the technology's ability to address both needs simultaneously, it's likely contactless payments soon will finally make contact in a big way.