Contactless Payments Market: Rising Demand for Convenience and Security to Drive Growth

Introduction

Contactless payment is an efficient method that enables consumers to purchase goods and services by tapping or waving their payment card or device near a contactless reader. RFID and NFC technologies transmit payment data.

Contactless payments have quickly gained in popularity thanks to their convenience and speed, being used at numerous merchants such as grocery stores, restaurants, gas stations and retail stores.

To make contactless payments, just tap or wave your card or device near a contactless reader; once near, it will beep to indicate the transaction has taken place; no need to swipe your card or enter your PIN!

Market Overview:

According to Market.us, The global contactless payments market was valued at US$ 22.4 billion in 2022 and is expected to grow US$ 90.6 billion in 2032. Between 2023 and 2032, this market is estimated to register a CAGR of 15.4%.

The contactless payments market has witnessed significant growth in recent years, driven by the increasing adoption of digital payment methods and the growing demand for convenient and secure payment solutions. Contactless payments refer to transactions made using near-field communication (NFC) technology or radio-frequency identification (RFID) to enable quick and secure payments without the need for physical contact between the payment device (e.g., a smartphone or card) and the point-of-sale (POS) terminal.

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Key Takeaways:

1. Rapid Growth: The contactless payments market has experienced rapid growth, fueled by advancements in technology and changing consumer preferences. Contactless payments are becoming the preferred method for many consumers due to their convenience and speed.
2. COVID-19 Acceleration: The COVID-19 pandemic further accelerated the adoption of contactless payments as consumers sought touchless and hygienic payment options. Retailers and businesses also embraced contactless payments to minimize physical contact.
3. Mobile Wallets: Mobile wallets, such as Apple Pay, Google Pay, and Samsung Pay, have played a pivotal role in the expansion of contactless payments. These digital wallets allow users to store their payment information securely on their smartphones and make payments by simply tapping their device at the POS terminal.

Market Trends:

1. Contactless Cards: Contactless payment cards, which include credit and debit cards embedded with NFC technology, have gained popularity. These cards offer consumers an easy way to make contactless payments without the need for a smartphone.
2. Wearables and IoT: The integration of contactless payment technology into wearables like smartwatches and fitness trackers has expanded the use cases for contactless payments. Consumers can now make payments conveniently using their wearable devices.
3. Biometric Authentication: To enhance security, contactless payments are increasingly incorporating biometric authentication methods like fingerprint recognition and facial recognition. This adds an extra layer of protection to transactions.
4. QR Code Payments: While NFC-based contactless payments dominate the market, QR code payments have also gained traction, especially in regions with limited NFC infrastructure. Apps like Alipay and WeChat Pay in China have popularized QR code payments.

Rising Demands:

1. Safety and Hygiene: Consumers are demanding safer and more hygienic payment options, particularly in the post-pandemic world. Contactless payments address these concerns by eliminating physical contact with payment terminals.
2. Speed and Convenience: Contactless payments are known for their speed and convenience. Quick tap-and-go transactions are appealing to consumers who value efficiency in their everyday transactions.

Increasing Uses:

1. Retail: Retailers, both online and brick-and-mortar stores, widely accept contactless payments. This includes grocery stores, clothing retailers, electronics stores, and more.
2. Transportation: Public transportation systems in many cities have integrated contactless payment options for bus and subway fares, making commuting more convenient.
3. Hospitality: Hotels, restaurants, and cafes have also embraced contactless payments, offering customers the option to settle bills quickly and securely.

Rising Popularity:

Contactless payments have become increasingly popular due to their many advantages. They offer a seamless and secure payment experience, which appeals to both consumers and businesses. As technology continues to evolve, and as consumers become more accustomed to contactless payments, this market is likely to continue its upward trajectory.

Market Segments:

Based on Component

• HardwarePOSCardsOthers
• SolutionPayment Terminal SolutionDevice Management SolutionContactless Mobile Payment SolutionTransaction & Data ManagementSecurity and Fraud Management
• ServicesConsultingIntegration & DeploymentSupport & Maintenance

Based on Application

• Retail
• Transportation
• Healthcare
• Hospitality
• Other Applications

Key Players Analysis

Listed below are some of the most prominent contactless payments industry players.

• Gemalto
• Infineon
• Ingenico
• Wirecard
• Verifone
• Giesecke+Devrient
• IDEMIA
• On Track Innovations
• Identiv
• CPI Card Group
• Bitel
• Seomatic Systems
• Valitor
• PAX Global Technology
• MYPINPAD
• Mobeewave
• Alcineo
• Castles
• SumUp
• PayCore
• Other Key Players

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