Bridging The Gap For Digital Exclusion In Payments

As the lockdown eases worldwide and shops begin to reopen their doors, many retailers are encouraging customers to use contactless card payments or mobile apps to pay. This move has come as a result of the concerns around the virus staying on bank notes for around 48 hours, and therefore able to transfer via point-of-sale terminals and ATMs.

In reaction to this, many of us have embraced touch-free payments to help improve hygiene in the payment process and reduce the risk of contamination.

Advancement in technology and the use of touch-free authentication allows consumers to make a transaction without having to touch a shared PoS to tap in a PIN number, sign for their purchase, or hand over cash.

 It is common when tapping a contactless card or using a mobile payment app and is an increasingly vital step in the process of making the payments industry safe in the world of coronavirus. However, there is a significant segment of society that still relies on cash who are unable to embrace touch-free payment authentication.

As we move more towards a more digital-focused society, government bodies are increasingly worried about the effects on vulnerable members of society. In particular, the elderly, those who remain un-banked, or those without a smartphone are still reliant on cash and could be left excluded in a digital-first payment ecosystem.

 In a post-COVID world, these same groups are those who could be most exposed to further viruses from cash circulation.

So, with touch-free payments important to improving hygiene, there is an important question to consider for those unable to access contactless payments: could digital exclusion be a barrier to a COVID-free society?

There is a significant segment of society that still rely on cash who are unable to embrace touch-free payment authentication.

Those who are digitally-excluded have limited or no access to digital tech that can make life more convenient, such as a smartphone or payment apps. According to the ONS, 9% of UK adults, or almost 5 million people, don’t have access to the internet, while in the USA, FCC data suggests around 42 million Americans lack broadband internet. As a result online banking would be inaccessible to many. In the UK, the government-commissioned Access to Cash review found that 17% of the population over 8 million adults would struggle to cope in a cashless society.

Exclusion from the digital world can lead to lower skills and confidence, but it can also lead to social exclusion and wider economic problems. As payment technology continues to advance, the use of basic IT devices could become essential to access goods and services. While touch-free digital payments offer many benefits, not everyone is ready to embrace a fully digital society just yet. But in our new normal, we must also consider the need to remove the concerns around transmission of the virus on cash.

Therefore it is important to be more innovative in our approach to payments and ensure that governments and banks work together to develop new digital payment technology in a more inclusive way, to bridge the digital exclusion gap.

Failure to do so will see those without access to digital services and payment options locked out from everyday services that so many of us take for granted and forced to continue using cash. Meanwhile more digitally-included members of society are able to avoid touching paper notes and coins or ATMs amid the threat of the virus. With more and more banking services moving online the need for simple and secure access to these digital services is more important than ever before.

In The Access to Cash review, the commission highlights biometrics in digital payments as an innovative technology that will make payments even easier in the future, which will support the pace of change towards a cashless society.

Biometrics are likely to be key to revolutionising digital inclusion in the coming years. As people get used to using fingerprints and faces to identify themselves, biometrics will become a more familiar and accepted touch-free way to validate transactions. Now, fingerprint biometric sensors can be incorporated into smart payment cards providing a speedier, personal and more secure means for consumers to authenticate payments.