The contactless payment means mobile operator based mobile communication network and Internet technology, through the non-contact communication function of mobile phones available to mobile user’s on-site payment services-oriented financial services. It can use smartphones, smartwatches, key chains, and even stickers. Any can also use a credit card; the difference is that they do not need to insert it into the slot of the POS terminal physically. Different cards and devices use different protocols to communicate with the terminal. Still, the key point is that EMV technology determines whether the transaction will pass means that they are, in a sense, a more useful chip and PIN card version.
The global contactless payment market size was stood at USD 9.12 billion in 2019 and anticipated to reach USD 21.76 Billion by 2027, registering a CAGR of 10.61% during the forecast period, 2020-2027. The significant factors are increasing the integration of contactless payment technology in mobile handsets, wearables, less queening time, and growing convenience. Additionally, upsurge in awareness about digital money as it helps in reducing transaction time offers convenience in processing low-value payments. It increases revenue opportunities for sellers will spur the global contactless payment industry in future periods. Further, the surge in adoption of contactless payment for its benefits such as efficient and quick payment solutions through an EMV contactless card, NFC mobile phone, or standard contactless travel card is positively impacting the market growth.
Moreover, the increasing need to make secure, safe, and easy payments across several industrial units is anticipated to fuel the demand for contactless payment across the globe in the coming years. Also, reduced transaction time, convenience in processing low-value payments, and increased revenue opportunities are driving the growth of the contactless payment industry in the forecast timeframe. Furthermore, the increasing need for cashless payments and ease of transactions, along with the rapid rise in the cashless transaction, is strengthening the market growth. The adoption of smartphones across the globe and safety & security offered by the non-contact payment mode is expected to witness remarkable growth of the global contactless payment market share. Additionally, the mounting trend of making payments through QR codes and mobile phones and innovations in payment technologies such as IoT is projected to trigger the robust growth of the market.
The rapid development of contactless payment will enter a cashless society where radiofrequency cards or other smart devices will replace traditional bank cards and cash. Intelligent and convenient payment and online banking constitute a complete online transaction system, thus avoiding the theft and forgery problems caused by card and cash transactions. The transparency of transactions brought about by electronic payments has dramatically improved the economic situation and even deterred political corruption. The fast-food restaurants, grocery stores, pharmacies, and other merchants accepting contactless payments start experiencing simple, fast, and secure contactless payments.
The future development direction of contactless payment is to integrate the cards for different purposes, such as bus cards and fuel cards, to use one card for multiple purposes. These technologies are becoming more mature and have entered the field of identity recognition. With the popularization of mobile phones and the development of new mobile services in the 3G era, mobile phones will show their talents in the field of contactless payment in the future.
The COVID-19 will accelerate the adoption of the contactless payment card. Much of this growth can be directly attributed to the global pandemic of the new coronavirus COVID-19. Coronaviruses have caused more interest in contactless solutions, which are more hygienic than cash and alleviate the need for physical contact with shared devices such as payment terminals. Payment providers such as Mastercard are collaborating with the government and banks to increase the spending limit for contactless transactions, while physical stores such as retail stores are encouraging people to use contactless methods for payment based on isolation measures.
Based on the component, the global contactless payment market classified into Hardware (POS, Cards, and Others), Solutions, and Services (Consulting, Integration and Deployment, and Support and Maintenance). The hardware accounted for the largest market share in 2019 and is expected to grow further over the forecast period. The segment’s growth is driven by the growing use of POS across retail channels and restaurants as it has ease of use, low deployment cost, and mobility.
The services will witness a lucrative growth rate in the projected period as services provide integration and deployment in various modules of the day-to-day operations such as project management, designing, engineering, procurement, testing, installation, commissioning, and after-sales services.
Based on the technology, the global contactless payment market segregated into radio frequency identification, near field communication, and host card emulation. The radio frequency identification segment witnessed a lucrative share in 2019 and likely to dominate the global contactless payment market by 2027. It is due to the radio frequency identification help in making secure payments and faster, more convenient payments.
Near-field communication is expected to gain significant market share over the forecast period as it powers contactless payments via contactless cards and allows smartphones, laptops, tablets, and other devices to share data when nearby.
Based on the solution, the global contactless payment market segregated into payment terminal solutions, transaction management, fraud management, and hosted pos. The payment terminal solution segment estimated to lead the market by 2027 due to these solutions can connect the customers directly to service providers of contactless payments.
The fraud management will grow at a significant rate during the forecast period on account of transactions carried out through contactless payments that are susceptible to fraud that needs data security.
Based on payment mode, the global contactless payment market segmented into smartphones, smartcards, and others. The smartcards segment expected to gain significant market share over the forecast period. It is attributable to smart card make the required data available to their customers with additional security to protect an individual’s identity and assets
The smartphone segment is poised to witness significant growth over the forecast period due to smartphone use in daily activities and to make payments at stores.
Based on the end-user industry, the global contactless payment market categorized into retail, BFSI, healthcare, energy and utilities, transportation and logistics, hospitality, and others. The retail segment has higher market potential in 2019 and is projected to witness substantial growth over the forecast period. It is attributed to contactless payment provide a convenient & quick way to conduct its financial transactions.
The transportation segment market exhibited a lucrative market share in 2019. It is expected to generate significant revenue during 2020-2027 due to the government and public organizations to improve and upgrade the ticketing systems with the help of contactless payments.
Based on geography, the global contactless payment market segmented into North America, Europe, Asia Pacific, South America, and Middle East & Africa. Europe estimated to occupy the lion’s share in the Contactless Payment market by 2027. It is due to the growing adoption of contactless payment among retailers, restaurants, bars, pubs, service stations, and supermarkets in the region. Additionally, the region comprises of better economic and technologically advanced countries.
North America will capture a prominent share of the contactless payment market by 2027. Due to the key developments in the media and entertainment industry in the region and increasing adoption rate.
Companies such as Gemalto, Infineon, Ingenico, Wirecard, Verifone, Giesecke+Devrient, IDEMIA, On Track Innovations, Identiv, CPI Card Group, Bitel, Setomatic Systems, Valitor, PAX Global Technology, MYPINPAD, Mobeewave, Alcineo, Castles, SumUp, and PayCore are the key players in the global contactless payment market.
By Payment Mode
By End-User Industry
Contactless payment allows consumers made payments for goods and services using their debit or credit cards with RFID technology or chip cards or other payment devices without the need to swipe, entering the PIN, and sign for a transaction.
The global contactless payment market size is valued at USD 10.12 billion in 2020 and is estimated to reach USD 21.76 Billion by 2027.
Contactless payments are secured and enabled with fraud protection on contactless payments as normal Chip and PIN transactions.
Europe will have the lion’s share in the Contactless Payment market by 2027 due to the growing use of contactless payment among retailers, restaurants, bars, pubs, service stations, and supermarkets
The contactless payment market registering a CAGR of 10.61% during the forecast period, 2021-2027.