Cash is No Longer King

Contactless digital payments gain traction globally, especially during COVID-19

Bob Goban

Have you ever wondered how many people touch money and the germs that are passed unwittingly through the everyday exchange of cash currency?

That thought is definitely top-of-mind with people these days as they guard against exposure to the COVID-19 virus. It’s a concern that has given further rise to the popularity of contactless digital payment technology such as facial recognition, Quick Response (QR) codes and near-field communications (NFC). Central banks in China, U.S. and South Korea now recommend that consumers use of contactless technology in the form of cards or e-wallets to avoid the spread of COVID-19.[i]

How contactless payment works 

Contactless or paperless payment systems utilize radio-frequency identification (RFID), a widespread technology that uses memory chips to store data or “tags” plus RFID readers that decode the message. Contactless payment often relies on near-field communication (NFC), which is a newer and more complex technology under the RFID umbrella. Unlike RFID, which functions at a distance of many feet, NFC only works when there’s a few centimeters of distance between objects. It prevents the chance that you’ll accidentally pay for a stranger’s groceries if you pass them in the checkout line. NFC is the underpinning technology for contactless services like Apple Pay and Google Pay, popular e-wallet platforms used on smartphones, watches or other wearable devices.

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Contactless transactions have become ubiquitous in many parts of the world, but Americans have been slow to adopt them. In 2018, just 3% of cards in use in the U.S. were contactless, versus about 64% in the U.K. and up to 96% in South Korea, according to a study by global management consulting firm A.T. Kearney.[ii] Below is a list of countries where contactless payments are on the fast track.

Asia Pacific

In Singapore, mobile payments have risen by 53% since 2017. In Australia, 72.4% of people use at least one digital payment method. And in Japan, the government is seeking to double digital payments to 40% of all transactions by 2027.


Our neighbors to the north have increasingly opted for digital solutions over cash and checks. According to new data released by Interac Corp., payment transaction records show that Canadian consumers and businesses are adopting digital methods to spend, send and receive money now more than ever. A record-setting number of 61.3 million transactions took place in Canada from mid-March through April of this year.[iii]


China’s experience with the SARS epidemic in 2003 helped launch digital payments and e-commerce in the country and forced what would become a permanent shift in behaviors. SARS was the catalyst for Chinese companies to adopt e-commerce for sales because people refused to meet in person. In 2019, nonbank online digital payment platforms in China processed nearly $35 trillion USD, according to the People’s Bank of China, showcasing how widespread the technology has become.[iv]


Contactless payments are being encouraged throughout Europe. In the Netherlands, contactless transactions account for 75% of total volume. Similarly, more than half of all card payments in Germany are contactless as compared to 35% before the pandemic. In France, bus drivers, who were worried about handling money, have seen authorities introduce an option for text message payments. In most countries, ATM bank transactions have also decreased significantly. In Germany, where consumers traditionally favor cash, ATM use is down by 47%. In the U.K., ATM transactions have decreased by more than 60% .[v]

Interconnection is key for contactless payments

Like most industries, the future of payments is wrapped up in making things faster, simpler, and more personalized and secure for the customer. And that requires open collaboration and fast, secure data exchange within a rich ecosystem of retail, financial services and fintech partners. Traditional IT architectures based on centralized control can’t cost-effectively scale to support newer digital payment platforms. And they can’t respond to new requirements or comply with regional regulations. Payment processors need a distributed, edge-based architecture that provides proximity to dispersed users, partners, systems, data and clouds across the world.

According to a recent research paper from Finextra, in association with Equinix, “To accommodate these changes, not only is it critical that the market infrastructure that supports this growth is architected for high availability, speed, and a diverse, interconnected financial ecosystem, but also that it is architected to securely connect to participants in whichever cloud provider they may reside.”

Equinix is home to an increasingly connected private and secure digital payments ecosystem. Our global platform with Equinix Fabric™ (ECX Fabric™) provides the digital infrastructure required to accelerate both new product development and business performance by connecting companies to networks, clouds and, in many cases, each other. ECX Fabric provides participants in our global digital payment ecosystem direct and secure high-speed, low-latency software-defined interconnection that bypasses the public internet. We also offer an innovative approach to managing encryption and tokenization of data via Equinix SmartKey™. It’s a global SaaS-based, secure key management and cryptography service offered on cloud-neutral Platform Equinix®  that simplifies data protection across any cloud architecture. It’s ideal for multicloud, e-commerce and payment environments and incorporates capabilities, features and functions designed to address secure, high-volume, real-time digital payments.

When the pandemic eventually abates, experts believe that consumers will continue using their newfound contactless payment tools and we’ll see an even greater shift away from cash. Equinix is ready to help companies design and implement the digital infrastructure needed to deliver quality, secure payment experiences across the globe.

Download the Payment and Commerce Digital Edge Playbook to learn more about how private interconnection is powering Payments and other industries around the world.

You may also be interested in reading the following:

Digital Payments Blueprint
Digital Payments Security E-Book


[i] World Economic Forum, 10 technology trends to watch in the COVID-19 pandemic, April 2020.

[ii] A.T. Kearney, Why US Banks Should Make Contactless Cards an Immediate Priority, 2018 as cited in Forbes, Banking After COVID-19: The Rise of Contactless Payments in the U.S., Jun 2020.

[iii] Finextra, Covid-19 accelerates Canadian move to digital payments, May 2020.

[iv] World Economic Forum, How digital payments can help countries cope with COVID-19, other pandemics: Lessons from China, May 2020.

[v] ACI Worldwide, Digital Payments: A Creature Comfort in the Era of COVID-19, May 2020.

Payment processors need a distributed, edge-based architecture that provides proximity to dispersed users, partners, systems, data and clouds across the world.

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