The Contactless Payment Boom Just Shifted into Overdrive

By Lou Basenese, on Tuesday, October 6, 2020

Covid-19 isn’t just encouraging massive shifts in consumer behavior, it’s forcing these shifts.

From the way we buy groceries and watch pro sports, to how we dine at restaurants or host social events, everything has changed.

But nowhere is this behavior modification more prevalent, and potentially more profitable, than in the way we pay for goods and services.

As Aite Group analyst Thad Peterson put it, "There's been an avoidance of anything that requires physical contact."

Indeed! And that represents an unparallel investment opportunity.

Let me explain…

No Contact, But Plenty of Profit Potential

Dirty cash, ATM keypads, checkout terminals — consumers are avoiding them whenever possible.

In their place, they’re using “contactless” digital payment methods that can help prevent the spread of coronavirus.

These “contactless” methods include credit cards with embedded NFC technology that only require a quick tap on a screen; smartphones with bar codes that can be picked up from a distance; and various mobile wallets offered by the likes of Apple and Google.

I first alerted you to this trend in April, in the early days of the pandemic. That’s when I identified it as a trend that Covid-19 was “rapidly accelerating.”

But fast-forward to today — and it’s vital we realize these shifts in payment behavior are massive, widespread, and permanent.

Consider the (overwhelming) data:

  • By May of 2020, 50% of U.S. consumers reported having used contactless payment methods at least four times, according to new research by Crowdfund Insider.
  • Almost 30% of U.S. consumers now view contactless payments as their preferred payment method, according to a Strategy Analytics survey.
  • And availability is on the rise, with a recent Deutsche Bank report revealing that 75% of the top 100 merchants in the U.S. now offer tap-to-pay.

Furthermore, I see this trend accelerating, not receding, even as the pandemic subsides.

Why? Simply put, the pandemic has forced a tipping point of adoption — for consumers, and as you can see in the chart below, for merchants, too.

Or as Visa Chief Product Officer Jack Forestell explained, "What we've observed over the years in getting contactless transactions off the ground is that there is a certain amount of trial anxiety that consumers can experience," he said. "People worry about not getting it right. There's been a barrier to getting people to try it. During the Covid crisis, what we've seen is that trial anxiety has been obliterated.”

As a result, contactless payment methods are expected to permanently surge in the coming months and years.

A 1,733% Surge in Two Years

For proof, look no further than card giant Visa…

By the end of this year, the company expects 300 million tap-to-pay credit and debit cards to be distributed in the U.S. That’s up from 110 million a year earlier.

As a result, analysts now expect contactless credit cards will account for a whopping 55% of Visa’s U.S. payment volume in 2022. That's up from 3% last year.

So we’re talking about a 1,733% surge in only two years’ time!

Bottom line, consumers’ experiences during the Covid-19 pandemic are permanently accelerating the move towards digital banking and contactless and mobile payments.

After years of studying technology adoption, I’ve identified such “forced adoption” situations as providing the most consistently lucrative investment opportunities.

So make sure your portfolio is perfectly positioned to profit from this transformation!

Time To Make Your Move

If you have the know-how to identify the most compelling investment opportunities in this emerging arena, now is the time to make your move.

But if not, I can help…

Just days ago, I singled out not one, but two such opportunities in the latest issue of my premium advisory, Lou Basenese’s Trend Trader.

If you’re interested in accessing my research (and finding out the ticker symbols to these two time-sensitive investment opportunities), you can sign up for a risk-free trial here »

Ahead of the tape,
Lou Basenese
Lou Basenese

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