The global contactless payments market was valued at US$ 9.8 Billion in 2017 and is expected to surpass US$ 26.3 Billion by 2027, registering a CAGR of 12.9% during the forecast period (2019-2027), according to the Global Contactless Payments Market Report, By Device Type (Smart Cards, Smartphones, POS, NFC Chips, and Others), By Component (Solution and Services (Consulting, Integration and Deployment, and Support and Maintenance)), By Vertical (Retail, Hospitality, Energy & Utilities, Transportation & Logistics, BFSI, and Others (Government, Telecommunication, and Education)), and by Region (North America, Europe, Asia Pacific, Latin America, and Middle East and Africa), published by Coherent Market Insights.
Increasing demand for contactless payments from the retail sector is expected to drive the market growth during the forecast period. Retailers are modernizing their brick-and-mortar stores to offer secure services to customers and establishing online stores to increase revenue. They are adopting advanced technologies such as big data analytics and cloud computing to increase their presence in the market. Retail manufacturers are using contactless payments methods that provide many benefits, such as reduced transaction time, increased operational efficiency, increased revenue, minimized cost, and others. Contactless payment methods at retail stores reduce transaction process and queue in counter. Moreover, the governments are also focusing on introducing new payment methods in order to increase productivity and remain competitive in the market. For instance, in December 2016, the government of India launched BHIM app for Unified Payment Interface (UPI). The common UPI based BHIM app allows the user to send and receive money through their mobile phones by linking their bank accounts. For instance, according to Coherent Market Insights’ analysis, the number of transactions done through the Bharat Interface for Money (BHIM) app reached 18.8 million in February 2020.
Contactless Payments Market - Impact of Coronavirus (Covid-19) Pandemic
Globally, most of the countries are affected by COVID-19 and most of the countries have announced lockdown. Contactless payment have become more preferred payment method, as it requires less physical interactions. Smartphone based payment interface and digital wallets are the potential solutions to contain the spread of coronavirus pandemic. Moreover, recent developments in digital payments have encouraged the use of contactless payment methods during this pandemic. For instance, in April 2020, Upgrade Inc., a U.S.-based loan company, launched new contactless credit card. The new credit card provides high transaction limit than other payment methods. Moreover, bank authorities and card network in Germany, U.K., Austria, and other countries have set higher transaction limit, as people are staying at home and prefer shopping through payment cards only. For instance, U.K Finance Limited increased the transaction limit for contactless payment cards starting from 30 Euros to 45 Euros. This, in turn, increases demand for contactless payment solutions.
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