Contactless payments are COVID’s new normal in Malta

Contactless payments have been on the increase in the past weeks, with many customers starting to shun cash in favour of a more hygienic way of paying for goods in a world increasingly defined by  COVID-19’s ‘new normal’.

Contactless technology was made available to retailers in Malta in 2016, with local banks starting to issue cards supporting the function the following year.

While this method of payment was slowly becoming more popular, shops visited by MaltaToday on Friday said they had experienced a significant rise in customers using contactless in the months since the coronavirus pandemic hit Malta.

Stephanie Frasson – a sales representative at the Bureau Vallée stationery in San Gwann – said that while people would typically either pay in cash or use the traditional method of inserting their bank card and inputting a PIN number before COVID, they were now more likely to simply tap their card, therefore avoiding touching the terminal with their hands. “People many times prefer to use contactless. It’s a very good system,” Frasson said.

Nigel Mifsud, a salesperson at the electronics store Ultimate in San Gwann also said he had noticed a rise in contactless payment. Mifsud praised the fact that Bank of Valletta had in March raised the limit on its contactless card to €50. He however said that people still needed to be more informed about the technology and its convenience.

“People are using contactless more than before, but there are also those who don’t know about the technology,” he said. “We sometimes ask customers whether they want to use contactless, and, even though their card supports the function, they tell us that they’ve never used it before and don’t know how it works.”

The rise of contactless was even more noteworthy at the Drinks ‘n’ More mini-market also in San Gwann. A representative of the shop said some customers even insisted on using contactless. “There as a substantial increase in its use in the past weeks. Some people even specify that they want to use contactless, instead of using their PIN, before they pay,” he said. “Apart from not having to touch the terminal, the technology also has the advantage of saving people some time,” he added.

Jesmond Gatt, Chief Officer for Banking Operations at the Central Bank of Malta, thinks these changes may well be irreversible. “It is too soon to be able to present data on the methods that people are using to pay, but we are already receiving reports from stakeholders that the use of cash has declined – with more use of electronic means of payment and a sharp uptake of the use of direct debits and credits,” he was quoted as saying by other press.

At the start of the pandemic, the Central Bank teamed up with other banks for comprehensive lab tests on both coins and notes to assess whether they carried a risk of contamination. The risk was shown to be not greater than for any other product, but as a precaution cash is being kept out of circulation a number of days once it is deposited at a bank.

Cash remains widely used in Malta: a 2018 payment habits survey found that 86% of households used cash for groceries – generally a median €10 for small purchases, up to €50 when using cheque or debit and card payments.

But with COVID-19, more supermarkets and grocers saw contactless payments being used, with the use of cards without authentication – not requiring a PIN – having limits raised to €50.

“Contactless card technology has been around for ten years but it was really only introduced to Malta two years ago. Nevertheless, vendors and clients are now relying on it more,” Gatt said.

And yet, in Malta there are only 16,000 electronic points of sale compared to some 80,000 companies registered for VAT.

The payment survey found that 59% of households paid utility bills in cash. It will be interesting to see how this figure changes, Gatt says. “Many people felt no need to move to other payment methods until now but COVID-19 meant that they now had no choice, since they could no longer go to wait at counters to pay in person. But now that they have made the move to direct debit, it is unlikely that they will go back to the way things were.”