Contactless Payment Market

Global Contactless Payment Market Size (2024 to 2029)

The global contactless payment market size was valued at USD 44.81 billion in 2023. The global market is estimated to grow at a CAGR of 21.5% from 2024 to 2029 and be worth USD 144.1 bn by 2029 from USD 54.44 bn in 2024.

Contactless payment is a way of securing payment transactions that are made using technologies such as Bluetooth, infrared (IR), radio frequency identification (RFID), and near-field communication (NFC). Contactless payment takes almost a tenth of the time traditional electronic transactions take, making it easier for customers. The need to make payment safer and the convenience of paying quickly without cash or identity details make contactless payment a popular game changer. Initially, contactless cards were only used in the form of travel tickets; They have evolved and helped consumers make payments for almost everything. A point to focus on is that these payments will have an upper limit and a restricted number of daily transactions. This allows the transaction to occur without any physical connection between the consumer's payment device and the point-of-sale terminal. Mobile phone payments, key chains, stickers, and cards are some of the devices used to make contactless payments.

Current Scenario of the Global Contactless Payment Market

Contactless payments are a significant transformative force in the global financial landscape. The adoption of contactless payments is happening at an exponential rate in several countries owing to the benefits offered by contactless payments, such as convenience, speed, and improved security for consumers and businesses. Consumers' rapid adoption of tap-to-pay methods using contactless-enabled cards, mobile wallets, and wearable devices is also contributing to the increasing demand for contactless payments. In recent years, the global contactless payments market has experienced remarkable growth and is anticipated to hold a promising future during the forecast period due to technological developments, constantly changing preferences of consumers, and continuous digitalization of financial transactions.

MARKET DRIVERS

The rising penetration of the Internet and the availability of robust Internet connections in several countries that support contactless payments are majorly propelling the global market's growth.

The number of Internet users in 2018 has touched almost 4 billion, with a year-on-year growth rate of approximately 7%. In addition, with the rise of digitalization and smart cities, people will be more inclined to use contactless payment methods because they offer convenience and faster payment terms. Also, smartphone manufacturers are launching contactless payment methods like Samsung Pay. All of this will help develop the market for contactless payment terminals. Applications like Google Pay, Apple Pay, Samsung Pay, and many others stimulate the market by offering money transfers, rewards, and many other easy-to-use benefits. North America recorded the highest Internet penetration rate, trailed by Europe, Australia, and Latin America. The average Internet penetration rate across the globe is 56.80%. With the increasing level of Internet penetration, people are adapting to new technologies and becoming more and more technology-oriented, which is also promoting the growth of the contactless payment market.

The rising popularity and increasing adoption of mobile payment apps are other significant factors boosting the growth of the contactless payment market.

The accessibility to mobile payment technologies has improved dramatically in the last few years owing to the increasing population using smartphones. The convenience and security offered by mobile payment solutions are one of the lucrative factors behind the growing popularity and rapid adoption of these solutions among consumers. Consumers have been leveraging mobile payment technologies and making payments anytime and anywhere, eliminating the worry of carrying physical cards and cash. The number of people who use mobile payment technologies is rapidly growing. For instance, the number of contactless mobile payment users worldwide is expected to reach 1 billion by 2024, which was 782 million in 2022, according to a study by Juniper Research. Between 2019 and 2020, the adoption of contactless payments in the U.S. grew by 150%, says MasterCard. China stands first in the adoption of mobile payments among all the countries. An estimated 80% of Chinese consumers use mobile payments regularly, as per the Pew Research Center. On the other hand, Businesses that operate in various industries are also incorporating mobile payment solutions into their operations to provide convenience and faster checkout to their customers.

Furthermore, several factors are contributing to the growth of contactless payment systems, such as advancements in contactless payment technology, a greater awareness of plastic money among buyers, a higher frequency of purchases, and a need for fast transaction time with no hassle of staying in long queues. Contactless payment continues to evolve, making it a useful interface between consumers and retailers, advertisers and merchants. Increased penetration of the Internet will also stimulate the market for contactless payment in the coming years.

MARKET RESTRAINTS

Concerns about security and fraud are one of the key restraints to the global contactless payments market.

The initial setup cost, the government limitation on the number of contactless payment transactions per day, and the limitation on the amount that can be done per day are some deficiencies of contactless payment that hinder the growth of the contactless payment market. The risk of spyware, malware, and virus attacks from the use of multiple systems limits the adoption of contactless payments worldwide. The poor knowledge of this payment method, particularly in Asia-Pacific and Latin America, further restricts growth in the global contactless payments market.

REPORT COVERAGE

SEGMENTAL ANALYSIS

Global Contactless Payment Market Analysis By Device

The smartphones and accessories segment held 42.9% of the global market share in 2023 and is predicted to grow at the fastest CAGR during the forecast period. The domination of the smartphones and accessories segment is majorly attributed to the increasing integration of contactless payment technology into smartphones and wearable devices and the growing preference from consumers for contactless payments. Popular smartphone manufacturers such as Apple, Samsung, and Google are putting significant efforts into promoting contactless payment features through their devices, which is propelling the growth of the smartphone and accessories segment. Several financial service providers offer a more convenient payment mechanism and transaction volumes through secure transaction devices. The use of smartphones in daily activities has increased considerably. For example, people now use smartphones to make payments in stores. Also, innovations in wearable devices such as payment bands and rings are expected to promote segmental expansion in the global market.

The point-of-sale terminals segment is anticipated to register a prominent CAGR during the forecast period owing to the increasing need for faster and more efficient checkout experiences and the increasing number of regulatory initiatives that promote the adoption of EMV contactless technology. The growing R&D efforts by the popular manufacturers of POS terminals such as Verifone, Ingenico, and PAX Technology to develop advanced contactless payment solutions to address the evolving needs of retailers.

Global Contactless Payment Market Analysis By Solution

The payment terminal solution accounted for 45.8% of the global market share in 2023 and is expected to continue dominating the market throughout the forecast period. The adoption of contactless payment technology is growing exponentially among the retailers due to the convenience, speed and security offered by the contactless transactions, which is primarily boosting the expansion of the payment terminal solution segment in the global market.

Fraud management is anticipated to grow at a healthy CAGR during the forecast period. Transactions made through contactless payments are susceptible to fraud because people have become more aware of the use of these systems. Several contactless technology providers, such as Gemalto and Visa Inc., continually improve their security protocols to improve security management in the contactless payment market. As such, the fraud management segment is expected to grow substantially during the forecast period.

Global Contactless Payment Market Analysis By Application

The retail segment was the largest in the global contactless payments market in 2023, capturing 49.7% of the worldwide market share. The retail segment is also predicted to be the fastest-growing segment in the global market during the forecast period. The lead of the retail segment in the global market is mainly due to increasing preference for cashless transactions from consumers and growing investments by popular retail brands to develop contactless payment infrastructure to offer a smooth shopping experience and streamline checkout processes.

During the forecast period, the transportation and healthcare segments are expected to grow at a healthy CAGR and account for a considerable share of the global market.

REGIONAL ANALYSIS

North America outranked all the other regions and emerged as the top performer in the global contactless payments market in 2023. North America held 36.4% of the global market share in 2023 and is predicted to continue to dominate throughout the forecast period. High consumer preference for contactless transactions in North America and increasing initiatives from financial institutions to boost digital payments are primarily contributing to the domination of North America in the global market. In North America, companies such as Visa, Mastercard, and Apple Pay have been investing significant amounts in the development of contactless payment infrastructure and establishing partnerships to further drive the adoption of contactless payments. In major cities in North America, such as New York, Los Angeles, and Toronto, the use of contactless payments is high. It is being used in public transit systems and retail establishments.

Europe is a strong regional segment for contactless payments in the global market and is predicted to grow at a prominent CAGR during the forecast period. The growth of the European market is mainly credited to the surge in the adoption rate, regulatory policies like Euro MasterCard Visa (EMV), the adoption of NFC technology, the strong penetration of smartphones, and the strong standards related to smart cards. Regulatory initiatives such as the Payment Services Directive (PSD2) promote open banking in Europe and foster innovation in payment technologies, supporting the contactless payments market in Europe. The penetration of contactless payments is happening at a brisk pace in Europe, compared to other European countries, such as the UK, Germany, and France, and these countries are also projected to hold the largest share of the European market during the forecast period.

The Asia-Pacific region is estimated to be the fastest-growing region for contactless payments in the global market during the forecast period. Smartphone usage for everyday transactions is increasing in the Asia-Pacific countries, propelling the Asia-Pacific market growth. The availability of low-cost NFC-enabled devices in Asia-Pacific is also boosting the growth of the Asia-Pacific market. The popularity of mobile payments and QR-based payment solutions is growing exponentially in Asia-Pacific countries such as China, South Korea, and India, which is promoting market growth in this region.

KEY PLAYERS IN THE CONTACTLESS PAYMENTS MARKET

The major companies in the global contactless payments market are Gemalto (Netherlands), Infineon (Germany), Ingenico (France), Wirecard (Germany), Verifone (United States), Giesecke + Devrient (Germany), IDEMIA (France), On Track Innovations (Israel), Identiv (United States), CPI Card Group (United States), Bitel (South Korea), Setomatic Systems (United States), Valitor (Iceland), PAX Global Technology (China), MYPINPAD (United Kingdom), Mobeewave (United Kingdom), Alcineo (South Africa), Castles (Taiwan), SumUp (United Kingdom) and PayCore (Istanbul).

RECENT HAPPENINGS IN THE MARKET

• In January 2020, the CPI Card Group introduced dual-interface metal cards uniquely combining high-quality design and contactless capabilities.

• In October 2019, Mobeewave and IDEMIA widened their partnership to implement a secure mobile POS and the validation of tariffs in Australia.

• In August 2019, Wirecard and Sisal Group signed a deal in the field of contactless payment solutions.

• In April 2019, OTI, a renowned near-field communication (NFC) and cashless payment solutions provider worldwide declared the receipt of a colossal order for rail ticketing systems and around 6,000 advanced payment systems.

DETAILED SEGMENTATION OF THE GLOBAL CONTACTLESS PAYMENTS MARKET INCLUDED IN THIS REPORT

This research report on the global contactless payment market research report is segmented and sub-segmented into the following categories.

By Device

• Smartphones And Accessories

• Point Of Sale Terminals

• Smart Cards

By Solution

• Payment Terminal Solution

• Transaction Management

• Fraud Management

• Hosted POS

By Application

• Retail

• Transportation

• Healthcare

• Hospitality

• Government

By Region

• North America

• Europe

• Asia Pacific

• Latin America

• Middle East & Africa