Contactless Payments Market Size, Share, Industry, Forecast and outlook (2024-2031)

Global Contactless Payments Market is Segmented By Device (Smartphones And Wearables, Point-Of-Sales Terminals, Smart Cards), By Solution (Payment Terminal Solution, Security and Fraud Management, Hosted Point-of-Sales, Transaction Management, Analytics), By Application (Retail, Transportation, Healthcare, Hospitality, Restaurants & Bars, Government, Others) and by Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis,  2023-2030

Contactless Payments Market Overview

The Global "Contactless Payments Market" is Expected to reach at a CAGR of 20% within the forecast period (2023-2030).

Contactless payment allows consumers to pay for different goods and services using their debit or credit cards with RFID technology, also known as chip cards, or other payment devices without swiping and entering a personal identification number (PIN) or signing for a transaction.

To make contactless transactions easy in the contactless payment industry, near-field communication (NFC) and radio-frequency identification (RFID) technologies are primarily used. Furthermore, transaction devices with an embedded chip and antenna allow customers to wave or tap their smart cards, key fobs, or handheld devices over a reader at a point of sale (POS) terminal.

Furthermore, consumers can now attach their credit cards to a device—a smartphone, smartwatch, or fitness tracker—and pay using the contactless system due to the rise of wireless technology and the popularity of smart devices. The consumer can avail of the contactless pay system by downloading a payment app such as Apple Pay, allowing users to securely store credit and debit card information and make transactions using their smartphone or Apple iWatch.

For contactless payments, transaction sizes on cards are usually limited. The maximum amount spent on a contactless transaction varies by jurisdiction and bank. Some merchants and retailers establish minimal restrictions for their tap system to reduce fraud, while others allow large transactions to go through.

Contactless Payments Market Scope

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Source: DataM Intelligence Analysis (2023)

Contactless Payments Market Dynamics

Tremendously improving the adoption of digital payment is creating huge market growth opportunities for the contactless payment market.

Tremendously improving adoption of digital payment is creating huge market growth opportunities for the contactless payment market

Countries globally implement ICT technologies to promote digital economies. Governments are taking various steps to digitize the payment process. One of the key growth imperatives for a country's economy is digital payment. It can raise productivity and economic growth, improve transparency, increase tax revenue, broaden financial inclusion and provide end-users with new economic options. The Indian government has taken the initiative to promote digital payments.

Furthermore, As a result of COVID-19's global nature and impact on e-commerce, it is anticipated to inspire increased global collaboration and establish online purchases and supplies policies. The pandemic has demonstrated that e-commerce may be a valuable tool/solution, particularly because e-commerce sales can help small and medium companies, the backbone of many economies. Thus predicted to have a significant impact on the growth of digital payment systems in various economies.

In addition, South Africa's payments market is no stranger to the push toward digital payments and a decrease in reliance on cash. Several mechanisms are already in place to enable this and banks, card companies, fintech, and shops are working to implement digital, non-touch payment systems.

Banks and shops globally are responding to COVID-19 fears by boosting the limitations on contactless card transactions, allowing for higher-value transactions to be conducted without touching the machine. To reduce the need for pin entry on point-of-sale devices, the UK government increased the per-transaction limit from GBP30 to GBP45 on April 1st, 2020. In addition, several leading retailers in Australia increased their contactless limit to US$200 on April 2nd, 2020, both to reduce the need for pin entry on the point of sale devices.

Thus growing efforts by the government to promote digital payment methods have boosted the market share for contactless payment at an unprecedented rate. Furthermore, the COVID-19 outbreak has created unprecedented opportunities for the market to grow in the forecast period.

The rising% of fraud cases with a spike in contactless payment is hurdling the market growth for the technology

The pandemic established the ideal conditions for contactless payment fraud to flourish. With the rise of online shopping, contactless payments, and fraud, retailers find it more difficult to track and dispute chargeback losses.

For instance, For the first quarter of 2020, Mastercard reported a 40% rise in contactless payments. In April 2020, the number of attempted fraudulent transactions climbed by 35%. "Friendly fraud," in which a customer demands a refund without returning acquired goods, has become more common. Compared to a 48% success rate with traditional credit card chargeback disputes, only 5% of merchants have successfully disputed Apple Pay or Google Pay chargebacks.

Furthermore, with the rise of mobile payments, merchants find themselves in the hazardous position of receiving more chargebacks while having a low dispute success rate. Merchants have been left to pay the bill due to a lack of clear chargeback resolution, which has resulted in the loss of money and, in some cases, the goods that created the transaction. Small firms are the most vulnerable, operating on thin margins and competing with larger businesses.

Fraudsters are overcoming the challenges of mobile payments. Fraudsters are likely to open a new credit card account if they have gotten personal data or credit card details. According to the FTC, fraudsters opened new accounts for 88% of credit card theft. They can then utilize this information for card-not-present transactions, such as those made through mobile payment apps. In this case, the fraudster owns the mobile app, but the payment information is owned by someone else, allowing the retailer to pay the bill.

COVID-19 Impact on Contactless Payments Market Growth

COVID-19's outbreak is likely to have a beneficial effect on the market. Due to the rise in the adoption and use of digitalized and online payment methods globally, the COVID-19 pandemic has hugely impacted the industry. Furthermore, to stop the virus from spreading, many governments have imposed a lockdown, which has resulted in a decrease in the use of cash, thus improving the cashless payment market.

Furthermore, Contactless card limitations have increased significantly across Europe as contactless payments have been encouraged across the continent during the COVID-19 crisis. In 2019, the contactless payment limit in Europe was EUR 30 or greater in only six countries. North Macedonia, for example, has a EUR 12 limit on contactless cards. By 2020, it will have more than tripled to EUR 41. These data suggest that contactless payments are gaining traction and will become the new standard in the post-pandemic future.

In addition, a Mastercard report done in 2020 indicated that contactless transactions surged twice as fast as traditional checkout methods at supermarket and medicine retailers between February and March, highlighting the pandemic's impact. According to the same Mastercard poll, 79% of respondents had switched to contactless payments, citing "safety and cleanliness as important factors." According to Precedence Research, contactless payment volumes, which were valued at US$1.05 trillion in 2019, are expected to reach US$4.6 trillion by 2027, driven by pandemic shocks in consumer behavior. The factors mentioned above have added value to the market growth value of contactless payment.

Contactless Payments Market Segment Analysis

The global contactless payments market can be segmented by device, solution, application, and region.

An increase in the usage of smartphones and wearable gadgets among young people in various countries is likely to boost the segment's growth prospects

The global contactless payments market is segmented on devices into smartphones and wearables, point-of-sale terminals, and smart cards. Out of the mentioned devices, smartphones and wearables hold most of the market share for the contactless payment market. An increase in smartphones and wearable gadgets among young people in various nations will likely boost the segment's growth prospects. The increasing use of smartphones and wearables has increased the demand for contactless payment methods in everyday activities. In addition, wearable innovations, including payment rings and bands, are expected to drive segment growth throughout the projection period.

For instance, Contactless payments have evolved in the UK, with NFC-enabled bracelets, phone covers, keychains, and jewelry devices sold by well-known firms. The widespread adoption has demonstrated the technology's progression from a playful and colorful series of co-branded Barclays-Topshop silicon devices to bPay-enabled watches from Guess, Timex, and Suunto.

Advancements in technology have also made their way into the world of sports. At the Rio 2016 Olympics, a chosen few wore fashionable contactless rings. ToviSorga wristbands have been used for the 2019 FIFA Women's World Cup event since then.

Furthermore, in March 2021, Axis Bank, a private sector lender, launched wearable contactless payment gadgets that will allow consumers to pay on the go. The devices, dubbed 'Wear 'N' Pay,' are available in the shape of a band, key chain, and watch loop for a price of US$ 10.1 (750 rupees). Customers can use it to make purchases up to US$ 66.8 (5,000 rupees) at a PoS machine, after which a PIN is required to complete the transaction. It also includes benefits like 10% cashback, incentives from multiple eating partners, and fraud liability coverage of up to 100% of the purchase amount.

Source: DataM Intelligence Analysis (2023)

Contactless Payments Market Geographical Share

Increased circulation of contactless cards and terminals by card firms such as Visa and Mastercard, overall contactless expenditure has accelerated the growth of the contactless payment market in the European region

The European contactless payment market is dominating the market, but it is highly fragmented due to multiple currencies and languages. The region includes various developed countries, from economically and technologically advanced nations like UK and Germany too heavily indebted nations like Greece and Austria.

The largest countries in the European market are UK, Poland, Spain, and Germany. With the increased circulation of contactless cards and terminals by card firms such as Visa and Mastercard, these countries' overall contactless expenditure has increased.

Furthermore, the rise of the regional market can be linked to the region's continually expanding electronic money transactions. The increasing demand for contactless payment in the region is expected to be driven by payment solutions enabled by real-time and biometric data and the secure performance of smart card transactions. Additionally, favorable government laws, such as open banking and the Second Payment Services Directive, are aiding regional market expansion.

As per the data published by the National Association of German Cooperative Banks, the number of digital payments grew by 35% in the first week of April 2020 compared to December 2019. Mastercard Global also recorded a significant surge in digital payments during the pandemic.

According to UK Finance, there were 1.6 million debit and credit card transactions in the UK. Contactless cards were used in nearly a third of all card transactions in the UK. There were 642 million contactless card transactions, up from 537 million a year before by 19.5%. Furthermore, banks are integrating with mobile payment apps due to the growing use of smartphones in Europe. Apple, for example, has partnered with Monzo. Thus growing digital payment in the European region is likely to boost the growth of the contactless payment market in the forecast period.

Source: DataM Intelligence Analysis (2023)

Contactless Payments Companies and Competitive Landscape

The global contactless payments market is highly competitive with local and global companies. Some prime companies contributing to the market's growth are Gemalto, Infineon Technologies AG, Ingenico, Wirecard AG, Verifone, Giesecke+Devrient, IDEMIA, On Track Innovations, CPI Card Group, Thales Group, and others.

The major companies are adopting several growth strategies such as acquisitions, product launches, and collaborations, contributing to the global growth of the Contactless Payments market.

• In January 2020, CPI Card Group introduced dual interface metal cards, which combine high-quality design with contactless functionality.

Wirecard AG

Overview: Wirecard is a global technology company offering products and services from 26 offices globally, with an employee strength of more than 5,300 people from 80 nationalities. The company operates regulated financial institutions in several key markets and holds issuing and acquiring licenses from major payment and card networks.

Product Portfolio: The company has a product portfolio of contactless payments that include:

• Google Pay: With Google Pay, Wirecard enables merchants to accept fast, cashless payments for products and services via a mobile device.
  • Google Pay is a fast and easy way to pay in millions of places, including websites, apps, and physical stores. It combines all of the information which needs at checkout and safeguards the payment information with many layers of security.
  • In addition, Google Pay makes it simple to redeem reward points, manage the cards and receive personalized recommendations to save time and money.

Key Development

• In August 2019, German payments company Wirecard Wirecard and Sisal Group signed an agreement on contactless payment solutions in Italy. SisalPay can use Wirecard to unlock the potential of digitalization and provide clients with innovative integrated solutions that provide maximum flexibility.

Why Purchase the Report?

• Visualize the global contactless payments market segmentation by device, solution, application, and region, highlighting key commercial assets and players.
• Identify commercial opportunities in the contactless payments market by analyzing trends and co-development deals.
• Excel data sheet with thousands of global contactless payments market-level 4/5 segmentation points.
• PDF report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study.
• Product mapping in excel for the critical product of all major market players

The global contactless payments market report would provide approximately 61 market data tables, 58 figures, and 180 pages.

Target Audience 2023

• Service Providers/ Buyers
• Chemicals & petrochemicals Companies
• Research Laboratory
• Manufacturers
• Healthcare
• Consumer Goods Companies
• Distributors