Share of contactless card payments at POS New Zealand 2018-2020

In 2020, New Zealand witnessed an uptake in the use of contactless payments at points of sale (POS), with contactless card payments accounting for 39 percent of total card transactions. This marked a significant year-on-year increase from only 27 percent. This might be attributed to more availability of contactless-enabled terminals at POS during the COVID-19 pandemic.

From cashless to contactless

Cashless payments have become a norm among consumers in New Zealand, whether for everyday expenses or retail shopping. In the wake of COVID-19, many businesses as well as consumers have gravitated towards contactless payments, also a non-cash payment method. Such tap-and-go transactions can effortlessly be made via contactless-enabled bank cards, mobile phones, and other wearable devices, such as smartwatches, using near-field communication (NFC). However, the lower transaction limit for contactless payments in comparison with contact card payments might be keeping shoppers from making larger purchases via contactless methods.

The future of digital payments

Pre COVID-19, cashless payment methods, which refer to payments made without exchanging cash, such as card and mobile payments, had already been widely used. The value of card transactions in New Zealand has constantly been on the rise within the last couple of years and will likely continue to grow as New Zealand continues to draw closer to a cashless society. Meanwhile, the coronavirus pandemic has further accelerated a shift from cash transactions at POS as global consumers shun away from cash for fear of virus transmission through the physical handling of money. Digital and mobile wallets have been gaining popularity and are likely to become more prevalent, even well after COVID-19.