Throughout the lockdown period in New Zealand and onward as we descended through the COVID-19 alert levels, contactless payments (payWave and tap-and-go payments) have been at the forefront of the changing face of payment solutions in retail.
Prompted by the World Health Organisation, the New Zealand government stated clearly that businesses "must be contactless" at levels 4 and 3, urging customers to pay online, over the phone, or by contactless in-person, with delivery or pick-up services also required to be contactless.
Why? According to the WHO:
So how did COVID-19 effect contactless payments in New Zealand?
We've undertaken a deep dive into our terminal data to attempt to unpack how payments changed as a direct result of COVID-19, and glean some interesting insights!
We undertook a review of the data collected from all Eftpos New Zealand terminals active between January 2020, up until the transition to Level 2 in May 2020. Here’s what we found.
There were some noticeable trends:
Once trading kicked off again at Alert Level 2, there was a noticeable increase in contactless transactions and a decrease in overall non-contactless payments compared to pre-COVID levels. Contactless payments peaked at 37.47% of all transactions on the Eftpos NZ network at Alert Level 2. Overall, there was a 10.88% increase in contactless transactions from the month prior.
The total revenue attributed to contactless transactions also increased by 9.33% in Alert Level 2, or a transaction value of $277,277,687 in revenue.
We believe these trends are underpinned by a sentiment shift among Kiwi consumers. Kiwis have transitioned from contactless payments being thought of as a 'convenient nice-to-have', to an essential and expected requirement. To some extent, contactless payments have become second nature to customers off the back of COVID-19. The once common 'no payWave' sticker on a dairy EFTPOS terminal is now jarringly inconvenient to customers.
To take a look at the full break down of the contactless payment numbers at each alert level stage in New Zealand, download the full Contactless Payment Whitepaper.
The emergence of COVID-19 in New Zealand also highlighted the value of contactless transactions in terms of mitigating human error and transaction decline. During the Alert Level 4 lockdown, it was more pivotal than ever that transactions were accepted smoothly, with as little physical contact with surfaces as possible.
In some instances (such as supermarkets), EFTPOS cards were handed over the counter, operated by the shop assistant, wiped down and passed back - demonstrating the level of vigilance during the peak of the COVID-19 lockdown in NZ.
Through analysing our data set, we can see that historically contactless transactions accounted for 25% of all of the declines made, while representing 30% of all transactions made.
Through looking at the percentage of declined purchases by method, we're able to see that contactless transactions are underrepresented in terms of declines, showing us that contactless transactions have better accuracy than non-contactless payments. This makes sense because 'Incorrect PIN' is the most common reason for a declined transaction and for most contactless transactions, customers are not required to enter their PIN.
Insights we can learn from this data set:
Contactless payments became the new ‘best practice’ for merchants in New Zealand during the COVID-19 lockdown. More and more businesses and industries are adopting contactless payments across the country, and if the general trend continues and research predictions are correct, contactless will eventually become the preferred payment type for merchants and customers alike.
What’s probably most important to note, is that while not all businesses have moved to contactless, we’ve observed an ideological shift from consumers who now expect contactless payment options as a part of ‘good service and safe practice’, as a direct result of the COVID-19 pandemic.
If you'd like a full breakdown of:
Download our full Contactless Payments Whitepaper, below. It's completely FREE and yours to keep.