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The widespread and global adoption of e-commerce has, in many markets, given brick-and-mortar establishments a run for their money. To combat this, the ‘offline’ shopping experience needs to be elevated to one of convenience and speed.
A seamless yet simple payment experience helps shoppers bust queues and spend less time paying, and contactless cards are already taking this experience to the next level at the point of sale, says Country Manager for Visa in Sri Lanka and the Maldives Anthony Watson.
A recent study by Adyen, conducted in Australia, found that 73% of shoppers had left a store due to long billing queues; the average wait time being 10 minutes, something customers were not willing to wait for1. Long queues and slow payment processes do more than just irk customers. The store can lose repeat customers or even loyal patrons due to one bad experience or negative word-of-mouth. Some even abandon purchases halfway through the billing queue if the items can be bought at a smaller or less crowded store. Apart from these, merchant profitability is affected by the monetary and non-monetary costs of handling cash and disbursing change.
Customers and merchants in Sri Lanka, like in other parts of the world, are clearly looking for easier, quicker and smarter ways to pay and be paid offline, akin to the smooth, online experience they are familiar with. And contactless cards do just that.
Contactless cards come with convenience and reduced payment time due to their simple mechanics of tapping to pay. This results in quicker checkout and a better experience, not just for the shopper but for the cashier too.
Watson adds, “By eliminating the need to swipe or insert the card for a transaction value of up to Rs. 5,000, contactless cards make small ticket payments much easier for customers. For merchants too, these cards not only help save on the cost of managing cash, but achieve higher footfalls by drastically reducing customer wait time and improving the overall shopping experience.
An additional benefit for merchants in accepting contactless payments is the reduced cash handling, freeing up time and resources for something more effective than going to the bank and depositing cash every now and then. This also reduces the worry of possible cash theft, pilferage or loss.”
The benefits of deploying contactless technology are being experienced by merchants everywhere. A recent study by Visa in Australia shows that 41% of retailers witnessed an increase in sales by introducing contactless payments, while 68% benefited from the improved speed of service2. Paying through contactless cards can greatly aid merchants in Sri Lanka too, especially those who deal with small ticket transactions and face the perennial issue of managing cash.
Contactless payments have been around for over a decade but have advanced remarkably over the past few years. Currently in Sri Lanka, there are 22.5 million cards in circulation3 covering more than 100% of the population –of this more than two million cards are already contactless enabled. Watson says that the growing financial services sector in Sri Lanka will further buoy the growth of contactless cards, enabling more consumers to pay with ease.
As offline merchants continue to face-off against e-Commerce giants, contactless payments can truly be a gamechanger for traditional store owners and merchants, irrespective of their size. Contactless payments save customers’ and merchants’ time and effort, making the experience smooth and seamless and helping increase stickiness. Customer loyalty, faster queue handling and subsequently higher footfalls are all strong reasons for stores to make the inevitable shift to contactless payments.
Footnotes
1Adyen: The True Cost of the Queue
2New report highlights the economic benefits of electronic payments, as contactless payments in Australia reach new high
3Central Bank of Sri Lanka Payments Bulletin Second Quarter 2018
