Contactless Payment Market worth over $100 billion by 2026
Published Date: August 14, 2020 Authors: Preeti Wadhwani, Saloni Gankar
Contactless Payment Market size is set to be over USD 100 billion by 2026, according to a new research report by Global Market Insights, Inc.
The rapid market adoption of smartphones, wearables, communications technologies, and integrated payment applications among consumers and merchants is driving the contactless payment industry growth. Devices integrated with multiple P2P apps facilitate real-time transactions, reducing waiting time and enhancing customer satisfaction. Regulators across the globe are taking efforts to accelerate real-time payments. For merchants, contactless payment reduces fraudulent activities, improves cash flow management, and offers incremental value to their customers. For governments and consumers, real-time payment enhances the fluidity of the overall economy and can efficiently trace activities.
Growing adoption of biometric real-time payment technology in smart cards is expected to drive contactless payment market growth as the technology provides secure transactions to end-users. Several market players are collaborating with banks to commercialize fingerprint-enabled contactless payment cards. For instance, Zwipe is planning the commercial launch of its first-generation biometric contactless cards in 2020. In addition to physical payment cards, the company has also collaborated with Watchdata Technologies to incorporate biometric payment technology into wearable devices.
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In 2020, due to the coronavirus pandemic, awareness of real-time payment technology among consumers has increased. Several developed and developing countries are raising their contactless payment capitals to conduct safe & secure payment and follow social distancing norms. For instance, in April 2020, to introduce more measures to limit cash usage and physical contact, the UK government raised the contactless payment limit from USD 39 (GBP 30) to USD 59 (GBP 45). Government initiatives to curb the spread of COVID-19 by promoting cashless transactions will increase the contactless payment market demand for such solutions in the near future.
Infrared (IR) contactless payment technology to gain traction due to proximity transactions demand
Market demand for proximity contactless transactions is increasing across several sectors, such as hospitality, retail, and restaurant, for real-time face-to-face transaction processes. Devices used for the implementation of IR wireless technology are cheaper as they consume less power and are compact. The technology covers a much wider area range and provides a more secure transaction due to point-to-point communications. An advanced biometric payment uses near-IR LED scanning technology. For instance, in 2020, several hospitals in the Southwest Sichuan Province of China started accepting payments through biometric IR technology using veins in fingers.
Browse key industry insights spread across 300 pages with 425 market data tables and 30 figures & charts from the report, “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” in detail along with the table of contents:
Digitalization in the transportation sector will drive the U.S. contactless payment market
Several authorities globally are adopting contactless payment solutions in their transportation sector to provide convenience, portability, and ?exibility to customers. Smart cards that can hold a range of tickets, other transport products, and third-party services are being implemented by transportation authorities. For instance, in May 2019, in the U.S., New York’s Metropolitan Transit Authority announced that buses will allow riders to tap a contactless bank card at turnstiles to make payments. The new fare payment system will be available on all New York City bus routes by 2020.
Secure transaction processes offered by contactless smart cards will drive industry growth
The ability to provide fast and convenient transactions will result in the increasing demand for contactless payments in smart debit & credit cards. These cards include built-in tamper-resistant technology, which is difficult to duplicate or forge. Access to stored information can also be protected by PIN and biometrics to counter unauthorized access. Contactless smart cards ensure integrity, confidentiality, and privacy of payment information stored or transmitted. Growing need for secure and convenient transactions has led to the adoption of contactless smart cards globally.
Digitalization in the Asia Pacific banking sector will provide several market growth opportunities to stakeholders
The Asia Pacific contactless payment market is projected to expand at 17% CAGR during 2020 to 2026. China accounted for majority of the regional market share. Additionally, economies in the South Eastern region including Singapore, Malaysia, the Philippines, and Indonesia are widely adopting contactless technologies in their transportation sector. For instance, in June 2019, Land Transport Authority (LTA) of Singapore government launched contactless transit payments initiative by partnering with Visa Inc, SimplyGo. It allows consumers to use their Visa or Mastercard’s contactless cards on public transport.
As a result of the growing demand for digital payments in the region, fintech companies are collaborating with stakeholders to integrate contactless technology in their products. For instance, in November 2019, Mastercard collaborated with Tappy Technologies, a wearable token service provider, to enable real-time payments through fashion wearables in Singapore and Hong Kong.
Strategic alliances among market players remain key strategic initiatives to increase market penetration across regions
Stakeholders are undertaking strategic initiatives to adopt inorganic business strategies and strengthen their position in contactless payment market. For instance, in October 2019, IDEMIA and Mobeewave extended their partnership to deploy NFC-enabled payment acceptance systems across Australia. The companies have collaborated since 2017 to provide contactless mPoS solutions to their end-users.
In February 2020, Fiserv, PayCore, Samsung, and Visa partnered to provide mobile POS terminals. The terminals allow merchants to accept contactless transactions on a consumer-grade mobile device without a dongle or any other additional hardware. The mPoS solution is becoming popular among small merchants and will raise non-cash acceptance & usage.
Prominent players operating in the contactless payment market include On Track Innovations Ltd., PAX Global Technology, PayCore, Thales Group, Valitor, Verifone, Visa, Inc., Heartland Payment Systems, Inc., IDEMIA, Identiv, Ingenico Group SA, Alcineo, Giesecke & Devrient GmbH and Wirecard AG.