The global pandemic has led to a massive surge in contactless payments in Ireland. According to the research data analyzed and published by Comprar Acciones, Q3 2020 saw an increase of 36% year-over-year (YoY) in the number of contactless transactions.
The report reveals that there were more than 182 million payments made, valued at $3.4 billion. Compared to a similar period in 2019, there was an upsurge of 77% in the value of payments made.
There was a slight dip in September in terms of activity, but Q3 3030 still saw at least two million contactless payments every day. On average, consumers spent $36.66 million every single day during the three-month period.
Moreover, consumers made higher value transactions, going from $14.23 in Q3 2019 to $18.56 in Q3 2020. Additionally, the number of contactless-capable cards increased to 1.7 million credit cards and 5.1 million debit cards.
Comparing Q3 and Q2 2020, there was a significant increase in the value of transactions in the third quarter. According to a Banking & Payments Federation Ireland (BPFI) report for Q2 2020, the total value of transactions increased by 26.6% YoY to hit a new high of $2.24 billion.
Over 40% US Consumers Using Cash Less Frequently Following COVID-19 Outbreak
According to insights from S&P Global research, the situation in Ireland mirrors that of the US. A Q3 2020 survey shows that more than 40% of consumers are using cash less often since the beginning of the global pandemic.
For survey respondents aged 38 to 53 years (Gen X), there was a 54% decrease in the use of cash. Similarly, there was a 64% decline for respondents with an income surpassing $150,000.
More than 1 in 6 persons surveyed said that they had made their first ever contactless payments after the start of the pandemic. The adoption rate was highest for Gen Z, at 25%, followed by Millennials at 23%. For Baby Boomers, 10% made their first ever contactless payment in 2020.
The pandemic has also driven increased adoption for existing users, with 29% of consumers saying they had increased their use during the outbreak. Millennials posted the highest gains at 40% while Gen X stood at 39%. 60% of those using contactless payments are active users, making daily or weekly transactions.
The global contactless payment landscape is equally thriving. According to a Grand View Research report, it was worth $1.06 trillion in 2019 based on transaction value. It is projected to expand at a compound annual growth rate (CAGR) of 19.8% from 2020 to 2027.
Also pointing to the increasing popularity of contactless payments, 48 countries increased spending limits on touchless transactions. On average, there was a 131% increase in transaction limits after the pandemic broke out.
Germany, which has always had a preference for cash, well illustrates this massive shift. It went from 35% cashless transactions before the pandemic to over 50% as of August 2020.
PayPal Payment Volume Grows by 36% to $247 Billion in Q3 2020
In the same vein, the pandemic has driven robust growth in the performance of contactless payment service providers.
A case in point is PayPal, which recorded its strongest growth in company history in payment volume during Q3 2020. In the three-month period, the payment processing company posted a 36% growth in total payments volume, reaching $247 billion.
In comparison, its total payment volume for Q3 2019 was $179 billion. The figure grew to $199 billion in Q4 2019 and then dropped to $191 billion in Q1 2020. Following a COVID-based surge, it shot up to $222 billion in Q2 2020.
PayPal’s revenue for Q3 2020 was $5.46 billion, marking a 25% YoY increase. Around 15 million new accounts were created during the quarter, a growth of 55% YoY. That brought the total number of accounts to 361 million.
On the other hand, the number of transactions rose by 30% to 4 billion. Venmo payment processing volume surged by 61% YoY to $44 billion, compared to 52% YoY growth in Q2 2020.
According to its full-year forecast, PayPal is on track to complete the fiscal year with 70 million new accounts. It anticipates a 30% growth in total payment volume and a 20% to 21% growth in revenue.
Payment processor Fiserv also recorded strong performance during Q3 2020, posting 21% growth in revenue to $3.79 billion. Its acceptance segment grew by 44% while the payments segments had a 20% increase. Together, they offset the 1% decline reported in the fintech segment. For the first nine months of 2020, its revenue soared by 79% YoY to reach $11.02 billion. There was a 303% increase in the acceptance segment during the period and 66% growth in payments. Once again, the fintech segment had a 1% drop.