Touch and grow: Visa claims sales growth

Published on the 06/06/2018 | Written by Pat Pilcher

Visa_PayWave_PayMark study

Data analysis points to payment method helping increase sales for merchants…

Cashless payment technologies have been widely embraced on both sides of the Tasman. Separate studies in both countries link contactless payment technologies with business growth and increased customer loyalty.

The Merchant Contactless Study commissioned in New Zealand by Paymark and researchers TRA, involved analysis of three years of Paymark transaction data. Amongst the findings was the fact that merchants who support contactless enjoyed double the sales growth (+10.1 percent) compared to merchants lacking contactless payment capabilities (whose rate of growth was just +4.6 percent).

This, says Visa’s country manager of NZ and the South Pacific, Marty Kerr, is about understanding what customers want: “The data in this independent study shows that merchants that do provide contactless have seen better results than those that don’t. We also know that these findings resonate with innovative merchants…This is because contactless provides merchants with a number of benefits such as the ability to provide a better customer experience (i.e. speed and convenience at the till), improved competitive advantage and greater operational efficiency.”

“Contactless provides merchants with a the ability to provide a better customer experience, improved competitive advantage and greater operational efficiency.”

IT market researcher, IDC attribute this not only to convenience but to the added value that is possible with contactless payment technologies says digital payments analyst at IDC, Michael Sek Pheng Yeo: “Features like automatic spending tracking in banking apps, notifications of payments made and in-built loyalty schemes from the likes of Samsung Pay – which can offer rebates all have strong appeal… With this sort of richness to the contactless payment experience, using legacy payments just seems less fun and less in-tune with what customers are looking for. Merchant’s which don’t offer contactless payments will be looked upon as being unable to provide a basic service that customers demand. Those customers will likely move on to somewhere that can fulfil their needs.”

Yeo’s sentiments were mirrored in the study. It found that transaction volumes with merchants who support contactless payments were double (+10.2 percent) of merchants without contactless payment capabilities (+4.1percent).

Similar studies in the Australian market by Mastercard in 2016 found that 33 percent of Australian respondents stated they got annoyed when a merchant didn’t offer contactless payment options. One in ten respondents also said they had avoided stores they knew didn’t offer contactless payments.

Looking further out, it is expected that contactless payment technologies will become ubiquitous, spanning a plethora of formats according to IDC’s Yeo:

“Contactless payments will see further evolution into formats such as bracelets which could deduct transport fees when you walk past a barrier at a train station, or even sunglasses which have chips built into them. Beyond wearables though, a lot of innovation will be focused on the mobile contactless payments side, as developers and hardware manufacturers continue to experiment to see how they can make payments more seamless than before,” he said.

That said, contactless payment marketers could face short term challenges as Australian research indicates only 26 percent of consumers are aware of having contactless payment options on their phones. Of those aware, only 36 percent said they’d use it. 54 percent said they wish they knew more about digital wallets. While this might be a positive for future adoption, customer education is clearly needed.

If the analysis is correct and such technology really does double sales growth, any initiatives should enjoy strong support from merchants.

Post a comment or question...

Your email address will not be published.

Time limit is exhausted. Please reload CAPTCHA.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Follow iStart to keep up to date with the latest news and views...