The coronavirus pandemic has changed the way businesses have been operating so long. Social distancing has become a priority to contain the spread of the deadly coronavirus. This has also seen a change in the way people carry out transactions.

Contactless payment has become the most-preferred option for safety concerns given its convenience. And this mode of payment is likely to stay since it also saves time.

Contactless Payments Gaining Popularity

The options for contactless payment have been there for quite some time. However, its importance is being felt now like never before given that it has emerged as the most convenient and safest mode of conducting transactions amid this pandemic. Consumers now want not only to shop at their convenience but also minimize personal contact with point-of-sale devices. Contactless cards are growing in popularity as a result.

According to a recent Entrust Datacard survey, 75% of those familiar with contactless payment cards now prefer these as their primary payment mode. Sanitation (70%) and speed (67%) are the top reasons cited by respondents. Overall, 83% of respondents believe contactless cards are here to stay and 61% think it’s at least somewhat of a priority to have a contactless feature on their credit or debit card.

Contact Payment Is Here to Stay

A survey of more than 11,000 consumers in 11 countries by global data and insights firm Dynata found a universal uptick in the adoption of contactless payments. The United States saw the largest absolute rise in contactless adoption, with 46% Americans responding that they now have a contactless payment method, up from 38% previously.

However, the country is still a laggard in terms of contactless preference, with only 24% indicating it as their preferred method of payment. But this may change fast as businesses too have started preferring contactless transactions keeping safety in mind.

Also, payments solution companies are introducing newer modes of contactless payments. In fact, Visa, Inc. V, on Jul 28, reported that its second-quarter results suffered from plummeting consumer spending amid COVID-19, although the pandemic did boost online spending and contactless cards. The company said it added 80 million contactless-enabled cards in the United States in the first half of 2020. 

Moreover, online transactions were another area of fairly solid growth for Visa, with card-not-present transactions spiking 25% every week since the start of April — roughly double the online transaction rate for Visa since the COVID-19 outbreak.

Stocks to Watch

PayPal Holdings, Inc. PYPL has emerged as one of the largest online payment solutions providers on the back of its strong product portfolio and two-sided platform that enables it to offer a smooth and secure transaction facility to both customers and merchants.

The company’s expected earnings growth rate for the current year is 7.4%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 60 days. The company has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Visa Inc.operates retail electronic payments network worldwide. It provides transaction processing services (primarily authorization, clearing and settlement) to financial institutions and merchant clients through VisaNet, its global processing platform.

The company’s expected earnings growth rate for next year is 15.6%. Its shares have gained 8.6% over the past 60 days. Visa has a Zacks Rank #3.

Global Payments Inc. GPN was incorporated in Georgia as Global Payments Inc. in 2000 and spun off from its former parent company in 2001.

The company’s expected earnings growth rate for next year is 27.3%. Its shares have gained 6.1% over the past 60 days. The company has a Zacks Rank #3.

Alphabet, Inc. GOOGL, apart from other products and services, also offers Google Pay, a digital wallet platform and online payment system developed to power in-app and tap-to-pay purchases on mobile devices, enabling users to make payments with Android phones, tablets or watches. 

The company’s expected earnings growth rate for next year is 32.6%. Alphabet’s shares have gained 14.2% over the past 60 days. The company has a Zacks Rank #3.

Apple, Inc.’s AAPL Apple Pay is a mobile contact payment system and digital wallet service that Apple Inc. introduced in 2014. The service allows users to pay for products and services using near field communication at the point of sale, whether in person, via iOS apps or the Internet.

The company’s expected earnings growth rate for the current year is 3.9%. The Zacks Consensus Estimate for current-year earnings has improved 0.5% over the past 60 days. Apple carries a Zacks Rank #3.

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