Don’t Ignore This COVID-Accelerated Trend
When I went to college, it was the early days of commercial Internet. Compared to today, the speed was slow as molasses, but as a novelty at the time it still seemed amazing.
Fast forward 25 years and today’s kids don’t even know that we once had to dial a number on our landline phone to go online. From good ol’ dial-up to broadband to wireless, Internet technology has come a long way. And wireless technology itself is moving to the fifth generation (5G).
5G promises to enable more connectivity and faster transmission speeds than ever before. We don’t even need cables to carry data anymore. Indeed, we are headed toward an increasingly wireless world, and COVID-19 has only accelerated the trend. When the pandemic forces people to be physically apart, mobile devices allow them to seamlessly and instantly connect to loved ones, friends, and coworkers.
Bringing the World Closer Together
It’s not a coincidence that tech stocks outperformed last year. Companies that provide the solutions that help the world continue to function in lockdown stood to gain business. Even after COVID-19 is defeated, it’s possible that pre-COVID normalcy as we knew it never fully returns. For example, working remotely could continue and video conferencing could replace in-person meetings. Mask wearing and minimizing physical contact could stay the new social norm.
Even before COVID struck, touchless technology was already here. For example, at some stores I didn’t even need to hand over or swipe my credit card anymore. I could just hover my card or mobile phone over the scanner. Since physical contact is one of the ways the coronavirus can pass from host to host, not needing to touch anything at a public place should help to reduce that type of transmission.
Credit card company surveys of consumers have shown that COVID has made contactless options more popular. People are more willing to use the technology.
A Mastercard (NYSE: MA) poll taken in the early days of lockdowns indicated that contactless payments were growing twice as fast as contact payments. Among those surveyed, 74% said they would continue to use contactless payments after the pandemic is over. Additionally, almost half of the respondents said that they had upgraded to a payment card capable of contactless payment.
Contactless: Here to Stay
Today, besides paying without contact, other forms of contactless interactions are already a reality. Visiting a restaurant for pickup is no longer necessary. You can order food online and have it delivered to your front door all without never speaking to anyone. You don’t even need to speak to the clerk at the hotel. You can book a hotel room online and use your phone as the room key.
From the business perspective, using contactless technology is more efficient. And from the user perspective, it’s not only safer in light of the pandemic, but it’s very convenient to be able to use your phone as essentially your personal assistant. Using the appropriate apps, consumers can do things that used to be the stuff of sci-fi movies.
Contactless technology goes beyond credit card payments. Other contactless technologies include voice command and facial recognition. The faster and more reliable wireless technology becomes, there will be more and more contactless capabilities. Technology is always evolving, and we are headed toward an increasingly connected, but contactless, world.
Even if you don’t feel like you need to use contactless technology in your life, from an investment perspective it’s important to keep tabs on which direction the wind is blowing. As the recent past has shown us, technology can change a lot in just a few years. Finding the right trends for investment can be a very profitable endeavor.
Editor’s Note: As our colleague Scott Chan just explained, consumers are getting accustomed to mobile cashless payments, more than ever before, because of lockdowns and social distancing. Once the global economy gets on the other side of the coronavirus crisis, the cashless payments segment will be in even stronger shape. The pandemic is causing shifts in buying habits, consumer expectations and workplace practices.
The contactless payments market is expected to soar over the coming months. Even the smallest slice of the payment industry’s multi-billion-dollar pie could result in massive stock price growth. After months of painstaking research, we’ve unearthed a company that’s in the best position to leverage these mega-trends. For details, click here.