Policies Must Support Contactless Payments and Innovations in the Electronic Payments System

By SBE Council at 30 July, 2021, 8:49 am

By Karen Kerrigan –

The COVID-19 pandemic acted as a catalyst in the United States to fast-track innovation in almost every sector. Historic levels of economic disruption created by the public health crisis has ushered in a new era of technological innovation and adoption by the public. Specifically, given the nature of the COVID-19 virus, the electronic payments system has provided immense value to struggling small businesses across the country. Millions of storefronts were forced to shutter due to being deemed “non-essential,” and were required to either adapt to a curbside and e-commerce business model, or go out of business all-together.

Over the past 18-months, this shift by small businesses has been aligned with a similar shift in tendencies among tens of millions of Americans who now favor contactless payments in order for a more efficient, safer, and secure transaction. The rise in adoption of contactless payments allowed consumers to avoid the exchange of cash which was highlighted in a Back to Business study conducted by Visa.

The study highlights the fact that approximately 49 percent of consumers noted that one of the most important safety measures a store can offer is contactless payment methods.

Fortunately, for years, the payments industry has invested in innovative technology such as Secure Remote Commerce, biometric authorization, tokenization, and EMV chip technology that have allowed for this widespread adoption. These innovations have added value for both consumers and small businesses, as new trends accelerated by COVID-19 will surely impact how consumers conduct their lives moving forward.

That’s why it’s unfortunate that some policymakers and big-box retailers have continuously attempted to limit investment, through expansion of Dodd-Frank era price controls, into the electronic payments industry, and in turn the very innovative technology that has allowed small businesses to stay afloat.

While small businesses have been decimated by COVID-19 and continue to dig out of the economic hole created by the pandemic and shut-down orders, most of these larger retailers were allowed to stay open and were pre-positioned for growth and have experienced record profits.

Make no mistake, profits are a good thing, which businesses large and small reinvest into innovations and technologies, which in turn help small businesses and their customers.  That is why policymakers and Congress must support and enable the critical investment into the electronic payments system to ensure the innovation of new technology that will help to boost small business sales and drive the growth of entrepreneurship and opportunity post-pandemic.

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.