The Global Contactless Payment Market Size Was Valued At $1,168 Billion In 2022, And Is Projected To Reach $5,424 Billion By 2030, Growing At A CAGR Of 20.6% From 2023 To 2030.

Contactless Payment Market Overview:              

Contactless payment is a way to pay that lets people exchange digital information without having to touch each other. It uses credit, debit, and smart cards, as well as key fobs and online payment apps for smartphones. With an integrated circuit (IC) chip and antenna, they use radio-frequency identification (RFID) or near field communication (NFC) technologies to make secure payments. They are faster, safer, and easier to use than other payment methods that require contact, and they help to improve the overall customer experience. Because of this, they are used in many different fields, such as retail, healthcare, energy, hospitality, transportation, banking, financial services, and insurance.

The market is growing because of new products and services and improvements in payment security technologies. There are now contactless payment methods, such as contactless cards, digital wallets, QR codes, and Tap to Pay, which make it easier and safer to pay. Contactless payment technologies, such as Near Field Communication (NFC) and Radio-Frequency Identification (RFID), make transactions faster with just a touch and shorten the time people have to wait. Also, the market is likely to grow because consumers and retailers want to cut down on the time it takes to do transactions and bill customers.

Contactless payments make it easier for customers to pay and give them a better shopping experience. The benefits of cutting down on transaction time depend on how many transactions are made during busy times. Also, the growing number of new ideas and government programs to improve networking infrastructure and create smart solutions are expected to drive market growth. Several governments around the world try to get merchants to use new ways to pay. The market for contactless payments is also growing because more and more businesses are using technologies that cut costs and offer services that are both easy and quick to use.

It is expected that the cost of putting in place technologies for contactless payments will slow the growth of the market. A lack of trust due to security worries, data theft, and unauthorized use of contactless payment methods is also expected to slow market growth over the next five years. Cyber-attacks on the rise and a lack of infrastructure are expected to slow market growth in developing economies. Financial regulators all over the world need to educate and inform the public about safe and scalable contactless payment methods. This will help the market grow.

COVID-19 Impact Analysis

During the forecast period, the COVID-19 pandemic played a significant role in driving market growth. Increasing global awareness has led to the rise in popularity of contactless payment methods. In the wake of the pandemic, the growing preference for contactless payment solutions is creating opportunities for the adoption of contactless payments. Concurrently, numerous merchants are integrating contactless payments into their daily operations to provide customers with a safe and secure payment method.

Enhance purchase experience is boosting the market growth

One of the most common complaints about EMV chip technology is the added time required for transactions. Contactless payments eliminate friction and improve the purchasing experience for customers. Positive outcomes from a reduction in transaction duration are wholly contingent on the proportion of transactions conducted during peak hours. A shorter line indicates that more customers have been assisted. Contactless payment technologies, such as NFC, HCE, and RFID, expedite transactions with touch-and-go payments, resulting in increased customer throughput during peak hours in the retail, BFSI, hospitality, and transportation industries, thereby reducing lines. Increased throughput will directly lead to an increase in revenue.

High cost of deploying contactless payment technologies

NFC-enabled readers are relatively more expensive than other types of readers. An industry that is prepared to invest in new contactless technology-enabled readers or POS terminals will be required to spend a substantial amount of money to adopt, acquire, and maintain the necessary machines and other equipment. While large and well-established businesses have successfully adopted this technology, it may be difficult for smaller businesses to maintain their current turnover and increase profits while adopting the technology. Installing hardware and software, as well as employing technicians to maintain them, could cause a company's costs to spiral out of control.

Rising demand for mobile and wearable payment devices proves to provide opportunities for market growth

NFC-enabled mobile handsets are embedded with smart chips that allow phones to securely store payment applications and consumer account information. This data can be easily used as virtual payment cards. The embedded smart chips are available in many forms, such as Subscriber Identification Module (SIM) cards, embedded secure elements in the phone, and Secure Digital (SD) memory cards. NFC chips in mobile devices can act as a card and a reader, enabling consumer devices to safely share information and make secure payments quickly. The introduction of the HCE technology specifically for mobile phones further offers major growth opportunities for the contactless payment market vendors in the next 10 years specifically for the MEA and APAC.

Lack of customer awareness for Contactless Payments

Lack of acceptable standards for contactless cards hinders the global acceptance of this technology. Consumers are in need of a viable alternative to cash for making payments; however, they are not aware of the options available in the market. In developing countries, consumers are mostly unaware of the contactless card payment technology. Financial regulators have to make huge efforts to educate people in these countries about the availability of different types of cards that are scalable and secure. The lack of standard payment technology in countries is also a major challenge for contactless payment vendors.

The solutions segment to record a higher growth rate during the forecast period

In the Contactless payment market by component, the solutions are expected to record a higher growth rate during the forecast period. Contactless payment solutions include software and applications required to build contactless payment functionalities to integrate into electronic devices, such as apps for smartphones and smart watches, thus making them NFC-enabled. For instance, PayCore Contactless Level 2 (L2) Kernel is a middleware application between terminal OS and terminal payment application that offers an EMV transaction between a terminal and card.

Type Insights

The smartphone-based payments segment led the market and accounted for more than 50.0% share of the global revenue in 2021. The rising penetration of smartphone devices used for making payments among the youth population across the globe is anticipated to generate growth opportunities for the segment. The use of digital wallets for making contactless payments through smartphones has increased the usage of smartphones in everyday tasks and activities. For instance, in the U.S., the smartphone penetration rate reached all the way up to 85.0% in February 2021. Furthermore, innovations in wearable’s, such as payment bands and payment rings for making contactless payments, are expected to propel the segment's growth.

The card based payments segment is expected to witness significant growth during the forecast period. The growing adoption of contactless cards, such as credit and debit cards for making payments in sectors such as BSFI, retail, transportation, hospitality, and the government, is expected to drive segment growth. Additionally, the acceptance of contactless cards by retailers is becoming more common, worldwide. For instance, in 2021, more than two-thirds of retailers in the U.S. have started accepting contactless payments through contactless cards. Moreover, merchant outlets are also focusing on reducing end-user queues by allowing them to use cards for quick transactions.

Application Insights

The retail segment dominated the market and accounted for more than 59.0% share of the global revenue in 2021. The growth of segment can be attributed to an increase in the number of 'tap-and-go' transactions around the globe. Retailers are adopting numerous innovative technologies, such as social networks, cloud computing, and digital stores, to increase their presence in the market. Moreover, retailers also understand the benefits of contactless payments, which include reduced transaction time, increased revenue, and improved operational efficiency. For instance, according to the global MasterCard study of 2020, 74.0% of retailers worldwide would plan to continue to use contactless payments after the pandemic situation.

The hospitality segment is expected to register the highest CAGR during the forecast period. Moreover, contactless payment is becoming increasingly prevalent throughout the hospitality industry. Hospitality businesses have started adopting some of the most cutting-edge technology while offering their guests a more user-friendly experience. Hospitality businesses have started deploying self-service kiosks that enable customers to pay for purchases without any human interaction with hotel staff. Moreover, hotels and motels are adopting payment solutions owing to the various benefits it offers, such as a high level of customer satisfaction and fast & secure transactions.

Regional Insights

In 2021, North America was the leader in the contactless payment market and made up more than 30% of the world's revenue. In North America, a lot of money is being put into developing advanced technologies for contactless payments, like NFCs and RFIDs. Also, a growing preference for digitization, the Internet of Things (IoT), and big data is expected to drive demand for advanced hardware and software solutions from the contactless payment solution providers in the region, which is good for the growth of the regional market. At the same time, Canadians are focusing on using digital wallets, which let them load their debit card information onto their mobile wallet and pay in a few easy steps.

During the forecast period, Asia-Pacific is likely to become the region with the fastest growth. The contactless payment market in Asia and the Pacific has a lot of potential because of all the big names in mobile wallets, like Alipay, Paytm, Phone Pe, and Google Pay. Also, the economy is doing well and the use of mobile wallets in retail is growing, which opens up more expansion opportunities and helps the Asia-Pacific market grow. At the same time, the Japanese government's efforts to turn financial services into a digital platform are expected to drive the growth of the contactless payment market during the forecast period.

Scope Analysis

Competitive Analysis

The vendors operating in the contactless payment market mainly used initiatives such as partnerships and collaborations to launch new products, and expand as well as offer contactless payment solutions to various end users. Demand for contactless payments is attributed to the ability of simplified payments at a faster rate. For instance, in December 2021, Visa Inc. launched India’s roadmap to strengthen payment security. This program aims at securing India’s dynamic digital payments ecosystem from emerging threats and cyber-attacks.

Numerous digital wallet solution providers, such as Google Pay and Samsung Pay, offer their contactless services at no charge to consumers as well as merchants. Vendors are also focusing on business strategies, such as partnerships. For instance, IDEMIA announced its partnership with Soft Space in March 2022 to enable contactless payment acceptance. This collaboration aims to accept mobile wallet and card payments across the world by simply converting a tablet or smartphone into a point-of-sale (POS) terminal by merchants and acquirers.

Recent Development

Apple empowers businesses to accept contactless payments through Tap to Pay on iPhone

February 8, 2022 - Apple today announced plans to introduce Tap to Pay on iPhone. The new capability will empower millions of merchants across the US, from small businesses to large retailers, to use their iPhone to seamlessly and securely accept Apple Pay, contactless credit and debit cards, and other digital wallets through a simple tap to their iPhone.

Amazon One: The Future Of Contactless Payments

In the fall of 2021, Amazon partnered with Affirm to be its exclusive BNPL provider in the U.S. through January of 2023, while Amazon also announced it will accept Venmo as a payment method.

Market Segmentation

This portion of the study on the Contactless Payment Market gives detailed data on the segments at the country and regional level, thereby aiding the strategist in determining the target demographics for the relevant product or service and the impending opportunities.

By Device Type

• Smartphones & Wearables
• Smart Cards
• Point-of-sale (POS) Terminals

By Application

• Food & Groceries
• Pharmacy & Drug Stores
• Restaurants & Bars
• Consumer Electronics
• Media & Entertainment
• Other

By Companies

• Thales
• Visa Inc.
• Giesecke & Devrient GmbH
• MasterCard
• Apple Inc.
• PayPal Holdings Inc.
• American Express Company
• com, Inc.
• com.
• PayU