March 19, 2020
Will coronavirus make mobile payment systems like Apple Pay, Google Pay mainstream?
At the Cameron's Deli takeout restaurant in New York's Westchester County, owner Albert D'Alisa just hung up new signs urging patrons to pay with contactless methods, like mobile pay.
"We're encouraging everybody to pay electronically," he says. Because in a coronavirus era, "nobody wants to touch cash anymore. The less contact, the better. Cash is filthy."
For years, experts have been telling us this.
We touch a dollar with our germs, pass it on to someone else who passes it another, and that was before there was a coronavirus. A study by Mastercard and the University of Oxford once found that the average banknote was home to 26,000 types of bacteria.
This is why D'Alisa wants his takeout customers to pull out their phones to pay, with either Apple Pay, Google Pay or Samsung Pay. He notes that many current credit cards also have a tap-to-pay feature that ditches swiping the card or having the reader read the chip. Instead, you just tap over the payment terminal.
The mobile pay solutions all work similarly. Through an app on your smartphone, you associate your existing payment card with the mobile payment solution. And then when you visit a retail store, place the phone near the terminal and validate the purchase with touch or face ID.
So in an era when the government has told us not to congregate in large gatherings, to skip handshakes and to wash our hands well as often as possible, paying by phone is safer, health-wise, as only one person has to touch the payment device, not two.
And Jordan McKee, an analyst with 451 Research, a unit of S&P Global Market Intelligence, calls it an "inflection point," that could help kick start the mobile payment industry.
But at this point, it's still really "early days" for mobile pay, with it accounting for just 2% of U.S. in-store sales in 2019, he says.
Apple Pay, which was first introduced in 2014, is by far the most heavily used, followed by Google Pay and Samsung Pay, he adds.
But for the general public, there's a big education curve for the industry. "Just 29% of consumers think wallet transactions are very secure," McKee says.
Why mobile pay is safer than cash
Mobile pay is actually safer than cash because you're never sharing the card with someone who has the potential to write down your payment card credentials, and at, say, a gas station, you're not inserting the card into machines that have been known to be hacked with a unit that can read your numbers after the card is inserted.
When you can just hold your phone over a card reader, you've got two steps of security. You have to authenticate the transaction with your thumbprint, PIN or facial ID on the phone, something you never have to do with a physical credit card.
When mobile pay was first introduced, many stores neglected to sign on. Early adopters included Whole Foods and Panera Bread. Now, major big-box retailers like Best Buy, Target, Walgreen's and CVS all accept it, while Walmart is still a big holdout from working with Apple, Google and Samsung.
Peter Giles doesn't mind. He spent Sunday helping his wife add credit cards to her wallet app on an iPhone and setting her up for mobile pay "all in the interest of keeping a distance from germ-infested paper currency," he says.
Beyond the deli business, D'Alisa also has a company that helps restaurants set up mobile apps for takeout orders, Trec2Go, and he says his phone has been ringing steadily over the last few days.
"This is the way of the future," he says. "Nobody wants cash in their restaurants to get stolen by somebody."
Consumers like it because they can order at home and run in to find a bag with the order waiting for them.
"We want to get people in and out, in the safest manner possible."
It was reported by the Daily Mail that the World Health Organization had called for consumers to stop using cash, due to the coronavirus, but WHO says it was misquoted.
"WHO did not say banknotes would transmit COVID-19, nor have we issued any warnings or statements about this," says WHO spokeswoman Fadela Chaib. "We do recommend that people wash their hands regularly."
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