A contactless payment refers to the method that allow customers to securely pay through debit cards, credit cards or from payment devices by using radio frequency technology (RFID) or near field communication (NFC). Contactless payment solution is a payment method that does not involve any physical contact with cash, menu, bill, etc. Contactless payment is considered as a quick and easy method to pay and it does not require customer to input a PIN. Companies are continuously leveraging latest technologies to make contactless payment methods more secure and easy to use. Payment companies are also focusing on eliminating the physical contact of card by introducing new digital payment methods such as google pay, apple pay, and Samsung pay. All major financial institutions are now offering contactless payment solutions to the customers, owing to the increasing demand for cashless payment across the world. These factors are expected to drive growth of the contactless payments market in the near future.
The global contactless payments market is expected to witness significant growth during the forecast period (2020–2027). Increasing use of digitalized payment options is expected to drive the market growth over the forecast period. The emerging economies are easing their tax policies and companies are providing loyalty offers on every transaction to encourage people to opt for digital transaction instead of cash transaction. The payment industry is shifting towards EMV (Europay, MasterCard and Visa) chip cards to provide improved security and finer control for offline transaction, which is expected to be another major factor fueling growth of the contactless payments market. Contactless payment card offers high security as compared to cash payment. For instance, in October 2019, SBI launched SBI Card Pay, a contactless mobile payment for all credit card users. This card provides faster, convenient, and more secure card payment using mobile phones. Moreover, payment industry is shifting towards contactless payment methods such as Google Pay, Samsung Pay, and others. Payment industries are using contactless payment methods to protect users from fraud and provide seamless experience such as Omni channel (personalized user experience), improving security of cards through EMV (Europay, MasterCard and Visa), loyalty offers on payment, and card holder verification method (CDCVM) to verify user identity, which are expected to increase demand for contactless payments market. All these features provide the customer/company with more security, cashless experience, and better tracking of expenses and reports based on spending, which is expected to drive growth of the market.
The major factor restraining growth of the global contactless payments market is lack of trust due to security concern, data theft, and misuse of the contactless payment methods other than the authorized user. The contactless payment do not require to input PIN, which makes it less secure than the conventional methods. Such factors are expected to hinder growth of the contactless payments market over the forecast period.
|Base Year:||2019||Market Size in 2019:||US$ 11.2 Bn|
|Historical Data for:||2017 to 2019||Forecast Period:||2020 to 2027|
|Forecast Period 2020 to 2027 CAGR:||12.9%||2027 Value Projection:||US$ 26.3 Billion|
Thales Group, Infineon Technologies AG, Ingenico Group, Wirecard, VeriFone, Inc., Giesecke+Devrient GmbH, IDEMIA, Track Innovations LTD., Identiv, Inc., CPI Card Group Inc., Setomatic Systems, Valitor, PAX, PINPAD, Mobeewave, alcineo, and Paycor, Inc.
|Restraints & Challenges:||
Contactless Payments Market - Impact of Coronavirus (Covid-19) Pandemic
COVID-19 pandemic is expected to drive growth of the market during the forecast period. This is due to increasing demand for contactless payments from various sectors such as BFSI, retail, transportation, and others. Retail sectors are using contactless payments to ensure the safety of premises & employees, and are enforcing them to follow social distancing. Moreover, due to COVID-19, contactless payments have become more preferred payment method, as it requires less physical interactions and is very helpful to contain the spread of COVID-19. Due to this reason, many companies have expanded their business by offering contactless payment solutions to their customers. In January 2020, Paytm launched contactless QR code payment method through which the user can do direct payment by scanning QR code from their mobile by minimizing the direct contact with payment devices.
Europe held dominant position in the global contactless payments market during the forecast period
Europe held dominant position in the global contactless payments market in 2019, accounting for 39.2% share in terms of value, followed by Asia Pacific and North America.
Figure 1: Global Contactless Payments Market Share (%), By Region, 2019
Europe held dominant position in the global contactless payments market in 2019 and is projected to retain its dominance throughout the forecast period, owing to high penetration of smartphone and enhancement in the technologies. For instance, according to Coherent Market Insights’ analysis, 71.1% of the population were using smartphone in 2018 from 21.3% in 2011. Furthermore, increasing adoption of Euro Mastercard Visa (EMV) cards and near field communication (NFC) technology is expected to boost revenue of contactless payments market. For instance, in June 2020, Wirecard announced collaboration with Stocard to launch new payment feature in Stocard app. This new feature allows user to load fund quickly by their bank cards to the app.
Asia Pacific region is expected to exhibit highest growth during the forecast period, owing to growing urbanization in countries such as India and China. Improving living standards, increasing disposable income, and rising international and domestic tourism are expected to increase demand for contactless payment solutions. For instance, in China, according to the National Bureau of Statistics (NBS), rural and urban per capita disposable income reached US$ 5,658.45 from US$ 2,107.2 in 2018.
Major players operating in the global contactless payments market include Thales Group, Infineon Technologies AG, Ingenico Group, Wirecard, VeriFone, Inc., Giesecke+Devrient GmbH, IDEMIA, Track Innovations LTD., Identiv, Inc., CPI Card Group Inc., Setomatic Systems, Valitor, PAX, PINPAD, Mobeewave, alcineo, and Paycor, Inc.
Smartphone segment is expected to drive the market growth during the forecast period
Among device type, the smartphone segment is expected to hold dominant position in the global contactless payments market during the forecast period. This is attributed to increasing smartphone penetration and increasing usage of internet-connected devices in Asia Pacific region. For instance, according to Coherent Market Insights’ analysis, in China, the penetration of smartphones increased from 41.3% of the population in 2016 to 61.2% of the population in 2020. Moreover, increased investments by telecom operators such as KT Corporation, NTT Docomo, China Telecom, Reliance Jio, and China mobile focusing on deploying 5G network infrastructure is expected to drive the market growth during the forecast period.
Figure 2: Global Contactless Payments Market Value (US$ Bn) Analysis and Forecast, 2017 - 2027
The global contactless payments market was valued at US$ 11.2 Bn in 2019 and is expected to reach US$ 26.3 Bn by 2027 at a CAGR of 12.9% between 2020 and 2027.
Contactless payment is a payment method where secure payment is done by using technologies such as radio frequency identification (RFID), near field communication (NFC), Bluetooth, and infrared. Contactless payment can take one-tenth of the time as compared to other conventional payment methods. Contactless payment mainly provides more convenient way to do payment without having cash, card or other identity details. Moreover, contactless payment has become an important part of the payment process in various industries. Consumers along with businesses are accepting ways that are highly safe by making use of NFC and RFID technology. Increasing the frequency of purchases, rising awareness regarding plastic money, and rising need for fast transactions without any inconvenience are expected to drive the market growth during the forecast period.
The global contactless payments market is expected to grow significantly during the forecast period, owing to increasing internet penetration in developed and emerging economies. For instance, according to Coherent Market Insights’ analysis, internet penetration reached 4.9 billion in 2020. People are now preferring digital payment and contactless payment method as it is more convenient, easy to use, and also minimizes the check-out time. Smartphone manufacturers are developing contactless payment methods such as google pay, Samsung pay, Apple pay, and others. Moreover, with increasing penetration of the internet, people are adopting new technologies and have become more technology-oriented. Various applications such as Samsung pay, google pay, apple pay, and others are driving the market growth by providing ease of use, fast transaction, security, rewards, quick money transfer, and a lot of other perks. Hence, these factors are expected to drive the market growth during the forecast period.
Moreover, major global players across different regions are focusing on developing new products with new features and latest technologies to gain competitive edge in the market. Industries are developing contactless payments with new features to cater to the demand from the end users. For instance, in January 2020, Visa Inc. announced partnership with SAMSUNG to innovate tap to phone program. Through this partnership, tap to phone enable sellers to accept payment through android smartphone.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.