Over the last ten years, contactless payments have gone from being a nice option to being the default payment method for many day-to-day transactions. Whether it’s cards, phones, or digital wallets, they are moving away from cash or chip cards and opting for tap-to-pay.
How Digital Wallets Broke Beyond Day-to-Day Purchases
Digital wallets originally came into existence to make easy payments in daily life. One example is Touch n Go, which started as a card that was used mainly for toll booths, train rides, and parking systems. The emphasis was on facilitating people to pass through high-traffic areas without having to carry cash. Eventually, this narrow use case expanded.
As smartphones became more ubiquitous and e-wallet apps became better, people began to connect them to their bank accounts and cards. Touch ‘n Go has followed this trend. What was initially a prepaid transport card later transformed into a complete mobile wallet. It can now be used for shopping, food delivery, prepaid utilities, and in-game purchases.
That is why it is also widely used for online casinos with TNG, which are already implemented for convenience. On these platforms, users do not have to install any third-party payment method. A PIN, bank card, or online banking application associated with the Touch ‘n Go account is all that is required to make a transfer.
Adoption in Retail and Grocery Stores
Retail remains one of the leading sectors where contactless payment has been the norm. In the U.S., 85% of grocery stores now accept it, with nearly 40% of other retailers doing the same. Customers use it for the speed and reduced touchpoints.
According to Visa’s reports, more than 300 million of their cards in the US are contactless-enabled. This broad rollout is aided by changing customer habits. People now top up digital wallets online or through bank apps linked to them and prefer scanning a QR code or tapping their card rather than counting cash.
In certain countries, such as Australia, contactless rose to dominance early on. By 2019, four out of five cards purchased were already contactless. Nowadays, that number is even greater. Merchants report that the process results in quicker checkouts and higher purchase frequency as consumers end up shopping more frequently if it’s easier to pay.
Food Services and Tipping Behavior
Restaurants and food outlets have also embraced contactless payments, especially since 5 years. Around 36% of restaurants in the U.S. already accept this method. Some have seen higher tips when digital platforms are used.
A survey found that 73% of people tipped more when paying through a device, with many leaving 16% to 20% more than they would with cash. One reason for this is the design of the checkout process. Tablets used for payment often include tip suggestions before the transaction ends.
Digital payments have also improved the worker experience. In an industry where wages can be unpredictable, these systems make tipping more consistent. Customers are less likely to skip it due to a lack of change, and restaurants can move people through lines faster, especially during peak hours.
Impact on Transit and Public Infrastructure
Public transport has been one of the starting points for contactless adoption for a long time. The U.K. recorded more than 142 million cards in circulation using contactless technology, and 147,000 active terminals.
Contactless cards and digital wallets can now be used on buses, trains, and even ferries, allowing passengers to avoid using ticket machines or booths. In the US, the adoption has been slower, but steady. Contactless use was reported at only 9% in transit systems before 2020, but a significant number of cities have started installing NFC-compatible terminals.
This gradual growth has been attributed to the high cost of upgrades and slow city-level implementation, but the pressure from riders is driving this development forward. Contactless is not only faster, it also decreases the time spent at entry points, which is good for traffic flow and passenger comfort.
Small Business and Independent Retail Uptake
Independent retailers and small businesses are experiencing the benefits of using contactless systems in a big way. Around 78% of small businesses that used it reported they experienced improvements in both their sales and customer satisfaction.
Faster checkout means more clients can be served in less time, and these businesses don’t always have the staff to handle long lines. Retailers that accept mobile wallets have reported a 12% increase in average transaction value. Some say it’s because customers tend to spend a bit more when not limited by physical cash.
In 2023, nearly 60% of independent retailers upgraded to POS systems that support tap-to-pay. This group also saw a 35% drop in fraud, as tokenized payments made it harder for stolen cards to be used.