Conventional wisdom says it takes about two months to form a new habit, and since the pandemic is unlikely to subside until 2021, U.S. consumers will certainly have longer than two months to become accustomed to digital payments. Given the accelerated shift in payment behavior and fintech disruption, the path forward for the market incumbents is clear: adapt or wither.
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The long-lasting impact of COVID-19 on digital payments
The pandemic has changed how people think about their choice of payment options. Following the initial stay-at-home orders in March, the hygiene concerns over handing over cash or payment cards to a cashier and touching the keypads at grocery store checkouts quickly drove many consumers and retailers to adopt contactless payments. According to a recent study from Forrester Research, retailers reported a 69% increase in contactless transactions since January. Further aided by the rise of online orders, digital payments suddenly became a necessity for many.
