Contactless Payment Market Size By Type (POS Terminals, Smart Cards), By Technology (NFC, RFID, IR), By Application (Hospitality & Restaurant, Transportation, Healthcare, Retail, Warehouse & Logistics, Entertainment & Media), Industry Analysis Report, Regional Outlook, Growth Potential, Price Analysis, Competitive Market Share & Forecast, 2020 – 2026

Industry Trends

Contactless Payment Market size exceeded USD 40 billion in 2019 and is estimated to grow at 15% CAGR from 2020 to 2026. The global industry shipments are projected to reach 15 billion units by 2026. Growing demand from consumers and merchants to reduce transaction & billing time will propel the market growth.
 

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Traditional banks have lost around 20% of their millennial clients in 2019, highlighting the disconnect between millennials and traditional banks. Millennials prefer to partner with banks that can relate to their needs and act as trusted advisors that can provide a meaningful, contextual, and personal engagement. Millennial consumers are also prepared to work outside a traditional financial setup when they find that the experiences working with such companies are better. Millennials are embracing contactless payments and care less about visiting brick & mortar branches or ATMs, driving the market demand for contactless POS terminals.
 

Safety & security of transactions is the primary concern of consumers and merchants. The players in the payment ecosystem are focusing on improving the safety and security of contactless payment by integrating 128-bit and 256-bit encryption in the payment methods. For instance, in May 2020, Identiv, Inc. partnered with Mint ID to launch the Internet of Things (IoT) connected, Near Field Communication (NFC) protected, and gold & silver bullion. Both the market players developed a tamper-proof NFC label that is integrated with AES-128-bit encrypted which enables MintID customers to authenticate their investments in real-time with iOS and Android mobile apps.
 

Advancements in networking infrastructure and rising government initiatives

Ongoing advancements in networking infrastructure and rising government initiatives for the development of smart solutions are the key industry driving factors. Several government administrations are encouraging their merchants to adopt advanced payment solutions. For instance, the Government of Australia is insisting retailers to adopt POS systems for contactless debit card transactions, as a result, since 2018 more than 90% face-to-face transactions made in the country were contactless.
 

The Australia & New Zealand (ANZ) contactless POS terminals market is predicted to register over17% growth rate through 2026.The rapid shift toward advanced POS terminals will push the adoption of contactless payment solutions. According to Security Technology Alliance and Visa, Inc., more than 70% of the U.S. market players have POS terminals that are hardware-capable for contactless payments.
 

Growing adoption of NFC-based payment solutions globally

The NFC technology segment accounted for around 60% of global market revenue share in 2019 owing to the extensive usage of NFC technology, facilitating real-time transactions. The solutions enable faster transaction process, easy support, and secure payment. Growing penetration of NFC-based mobile handsets is contributing to the NFC-based contactless payment market growth. The technology provides short-range communication between electronic devices, providing a high degree of customer satisfaction & experience and helps in fast-tracking connections. Demand for NFC-based contactless payment systems is growing from the transportation, retail, and healthcare industries.
 

Demand for contactless payments solutions from the Asia Pacific retail industry

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The Asia Pacific contactless payment market will expand at 17% CAGR during the forecast timespan. Rapid adoption of contactless POS terminals in the retail industry is being witnessed. Contactless POS reduces transactional time and helps retailers to accelerate transaction process and reduce counter queues. Inserting an EMV chip takes 30 seconds while a contactless method only takes 15 seconds, saving 15 seconds per transaction. Consumers also prefer contactless payment options. According to the Mastercard Survey, more than 68% of consumers in Asia Pacific prefer to shop at stores with contactless payment options. As a result, retailers are moving from traditional systems to contactless payment options.
 

In 2020, the COVID-19 pandemic has become a catalyst in the widespread market adoption of contactless payments. As a result of the pandemic, retail stores have limited the number of consumers in their stores, improved their sanitization regimen, and introduced social distancing markers. The pandemic will force retailers to implement protective measures and adopt contactless POS terminals within their stores.
 

Growing circulation of contactless smart cards in Europe

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Europe held more than 25% of the industry shipments in 2019 and is anticipated to dominate the contactless payment market during 2020-2026 due to consistently growing electronic payment transactions in the region. Visa and Mastercard accounted for majority of electronic payment transactions and more than 85% of the transaction via payment cards in Europe were on these cards. The secured performance of smart card transactions along with payment solutions enabled by real-time and biometric will drive demand for contactless payments.
 

Prominent companies in the region are Thales Group, IDEMIA, and Ingenico Group SA. Robust growth of account-to-account payment systems at the POS terminals in countries including Russia, Denmark, Sweden, Italy, and Spain will further augment the regional demand for contactless payments. Moreover, favorable government regulations such as second payment services directive and open banking are also contributing to the market growth.
 

Market players are adopting several strategies to penetrate untapped markets

The contactless payment market players are focusing on business strategies, such as new product development, to increase customer base and strengthen their product portfolio. For instance, in January 2020, Mastercard certified the first contactless fingerprint payment card by Thales Group. This new certification will ramp-up product adoption in the technologically advanced countries. The project is currently deploying several pilot projects.
 

Stakeholders are also adopting inorganic business strategies by acquiring companies that can enhance their value proposition and complement their existing product lines. For instance, in April 2019, Thales Group acquired Gemalto and become a global leader in digital identity and security. The acquisition increased its revenue to more than USD 19 billion and enhanced its product portfolio.
 

Some of the key players operating in the contactless payment market are Alcineo, Giesecke & Devrient GmbH, Heartland Payment Systems, Inc., IDEMIA, Identiv, Ingenico Group SA, On Track Innovations Ltd., PAX Global Technology, PayCore, Thales Group, Valitor, Verifone, Visa, Inc., and Wirecard AG.
 

This market research report on contactless payment includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD and shipments in units from 2016 to 2026 for the following segments:

Market, By Type

• POS terminals
• Smart cards
• Others

Market, By Technology

• RFID
• NFC
• IR
• Others

Market, By Application

• Hospitality & restaurant
• Transportation
• Healthcare
• Retail
• Warehouse & logistics
• Entertainment & media

The above information is provided on a regional and country basis for the following:

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia
  • South East Asia
• South America
  • Brazil
  • Argentina
  • Chile
  • Colombia
• MEA
  • UAE
  • Saudi Arabia
  • South Africa