Contactless payments rise as Covid-19 changes shopping habits

The Covid-19 pandemic has impacted the consumer behavior and consumption patterns, even as the country has begun to unlock completely after months of lockdown.

Since the lockdown started in March, a majority of the consumers have preferred online shopping channels as a safe mode for buying both essential and non-essential goods. They have also preferred to use contactless payment channels to make payment for their purchases, a study has revealed.

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According to a new survey carried out by YouGov, a global market research company for American Express India, 69% of surveyed consumers (total sample of 1,000 consumers across 10 cities including Bengaluru) prefer contactless modes of payment such as Paytm, BHIM, Google Pay or PhonePe when they purchase goods.

The survey also finds that 8 out of 10 customers still feel scared of stepping outside their homes to shop and 6 out of 10 prefer to shop online for non-essentials. About 63% consumers are quite optimistic about resuming their pre-Covid-19 shopping habits in the next 3-6 months.

The survey was conducted in 10 top cities including Bengaluru, Delhi, Mumbai and Kolkata among others during the first fortnight of September. The survey also included 300 small and medium businesses (SMBs).

There is a heightened interest amongst the consumers to shop from local shops/ small businesses (LSSBs). Every three out of four consumers found LSSBs to be useful and a vast majority (70%) also state that they are likely to prioritise shopping from LSSBs.

About 53% of customers feel that a safe shopping environment is their topmost requirement to be willing to visit local small businesses.

“With the lockdown restrictions easing, it is heartening to see small businesses and consumers being optimistic about returning to pre-Covid shopping levels while taking appropriate safety measures. Interestingly, our survey reveals that 70% of consumers are likely to prioritise shopping from local small businesses as they open,” Manoj Adlakha, SVP & CEO, American Express Banking Corp India told DH.

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He said American Express has set up a $200 million global fund to help SMBs incentivise their customers.

Among the SMBs, 80% owners are optimistic that they will survive the Covid-19 pandemic. Small businesses are innovating to retain and maintain the trust of consumers and will continue to do so post the pandemic as well. Around 45% of SMBs have started accepting new methods of payments such as contactless payment channels, mentioned the survey.