Download Sample, Increasing Adoption of Smartphones and Wearable Devices is Influencing the Contactless Payment Market Growth
The growing adoption of contactless payments, smartphones, and wearable devices by businesses and merchants is influencing the market growth of the contactless payment market. Most of the service providers, retailers restaurants, and other businesses are providing and receiving mobile and other contactless payments to attract customers, reduce cost, and increase sales. The growth for contactless payments is rising due to the impact of the Covid-19 pandemic period due to which card payments increased and cash payments continued to fail.
According to UK finance, the number of contactless payments made in the UK has increased approximately by 15% to 12 billion payments. Contactless payments have increased in recent years by more than 30%. The people in the UK use the contactless payment mode more than 87%. There are more than 138 million contactless cards in circulation, covering approximately 83% of credit cards and approximately 91% of debit cards. There is a strong growth in the use of smartwatches and mobile phones to make payments. Nearly 35% that is 20.3 million people of the adult population are registered to use mobile payments.
According to UK finance, the number of contactless payments made in the UK has increased approximately by 15% to 12 billion payments. Contactless payments have increased in recent years by more than 30%. The people in the UK use the contactless payment mode more than 87%. There are more than 138 million contactless cards in circulation, covering approximately 83% of credit cards and approximately 91% of debit cards. There is a strong growth in the use of smartwatches and mobile phones to make payments. Nearly 35% that is 20.3 million people of the adult population are registered to use mobile payments.
Integration of IoT Technology in the Contactless Payment in Driving the Market
The rising integration of IoT (Internet of Things) in contactless payment technology is accelerating the market demand. Through leveraging IoT devices like smart cards, smartphones, and wearable things customers can consistently initiate transactions with a simple wave or tap, which enhances convenience and speed. Furthermore, according to Mastercard’s research, it found that 46% of people have contactless payment cards. Mastercard determined that the majority 82% of participants consider the contactless payment method to be a safer way for payments as compared to other modes of payment.
Moreover, contactless payment is in high demand as the growing acceptance of electronic payment methods is contributing to market expansion. Contactless payments offer several benefits to the users, such as security for transactions. For security protection of contactless payments, this involves network tokenization, circuit chips, and encryption, which benefits merchants, financial institutions, and customers. In addition to this, contactless payments provide speed payments and more efficiency to the users. It helps businesses to serve more customers in less time, significantly reduces the waiting time of the customer, and increases operational efficiency.
Moreover, contactless payment is in high demand as the growing acceptance of electronic payment methods is contributing to market expansion. Contactless payments offer several benefits to the users, such as security for transactions. For security protection of contactless payments, this involves network tokenization, circuit chips, and encryption, which benefits merchants, financial institutions, and customers. In addition to this, contactless payments provide speed payments and more efficiency to the users. It helps businesses to serve more customers in less time, significantly reduces the waiting time of the customer, and increases operational efficiency.
Recent Trends in the Contactless Payment Industry
- Increasing security in NFC payments with biometric authentication.
- Gaining popularity for quick and touch free transaction through QR codes.
- Enhancing speed limits in contactless cards for customers convenience.
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Security Concerns and Low Limit Transaction Acts as a Challenge to the Market Development
The growth of the contactless payment market is affected by various features such as technological dependency. The payment which is made by contactless payment mode, needs the device to have an internet connection and battery life for the device. Without this the user cannot be able to make the payment, this technology dependency leads to the hampering of the market growth. Moreover, the key challenge of the contactless payment market is the concern of data security, inadequate password protection, and weak authentication measures that may make the system vulnerable to unauthorized access.
While using contactless payment for transactions, payment data may be tracked and this leads to privacy concerns about the security of personal information stored digitally. Furthermore, contactless payments offer low transaction limits, which provide traction to the market expansion. This limit restricts the customer for larger purchases and requires the users to make payments in traditional methods for higher-value transactions. Adoption and acceptance of contactless payments in various sectors including hospitality, retail,l and transportation is crucial to overcome this limitation.
While using contactless payment for transactions, payment data may be tracked and this leads to privacy concerns about the security of personal information stored digitally. Furthermore, contactless payments offer low transaction limits, which provide traction to the market expansion. This limit restricts the customer for larger purchases and requires the users to make payments in traditional methods for higher-value transactions. Adoption and acceptance of contactless payments in various sectors including hospitality, retail,l and transportation is crucial to overcome this limitation.
New Product Launches Present Lucrative Growth Opportunities for the Market Expansion
Major market participants are concentrating their efforts on research and development in order to manufacture products that meet the demands of their customers. They also explore various market strategies, such as technological advancements, mergers, and acquisitions, in order to get a competitive advantage in the global market. For example, in April 2024, Mastercard introduced its mobile virtual card application, to simplify and make business expenses and travel more secure. Furthermore, in Dec 2023, ToneTag introduced its latest revolution called as Contextual Unified Secure Payment (CUSP) network. CUSP is a conversational, contextual, and margin-based presence payment infrastructure for new-age digital payments such as contactless tokenized debit/credit cards, UPI, and CUSP. Additionally, in Sep 2023, Eastern Bank Limited (EBL) launched wearable payment solutions in Bangladesh in collaboration with Visa and Mastercard. It is Bangladesh’s first wearable payment device named WEARABLE.
Heartland Payment Systems (Global Payments Inc.), Giesecke & Devrient GmbH, IDEMIA (Advent International), On Track Innovations Ltd., Setomatic Systems, Thales Group, Valitor, Verifone Systems Inc. (Francisco Partners), Visa Inc., Pax Technology, Ingenico Group (Worldline S.A.), Ingenico, Apple Inc., PayPal, Amazon.com, Inc., Mastercard, VeriFone, Inc., Square, Inc. and American Express Company.
Heartland Payment Systems (Global Payments Inc.), Giesecke & Devrient GmbH, IDEMIA (Advent International), On Track Innovations Ltd., Setomatic Systems, Thales Group, Valitor, Verifone Systems Inc. (Francisco Partners), Visa Inc., Pax Technology, Ingenico Group (Worldline S.A.), Ingenico, Apple Inc., PayPal, Amazon.com, Inc., Mastercard, VeriFone, Inc., Square, Inc. and American Express Company.
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Rising Adoption of NFC and QR Codes is Stimulating the Contactless Market Development
North America is anticipated to hold the largest contactless payment market share during the forecast period. This is due to the existence of key competitors in the contactless payment business, growth in rising demand for increasing adoption of two technologies such as NFC (near-field communication) and QR (quick response) codes, and an increase in demand for enhancing convenience for customers and fast transactions. Demand for contactless payment is significant in developed nations such as the United States and Canada. Additionally, in the Asia Pacific contactless payment market is expected to expand rapidly over the forecast period. This might be attributed to an increase in the number of companies providing similar services in emerging nations such as India and China. The contactless payment in India is rapidly growing, which has resulted in a significant increase in commercial activity in major cities.
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The report provides a detailed overview of the contactless payment market insights in regions including North America, Latin America, Europe, Asia-Pacific, Oceania, and the Middle East and Africa. The country-specific assessment for the contactless payment market has been offered for all regional market shares, along with forecasts, market scope estimates, price point assessment, and impact analysis of prominent countries and regions. Throughout this market research report, Y-o-Y growth and CAGR estimates are also incorporated for every country and region, to provide a detailed view of the contactless payment market. These Y-o-Y projections on regional and country-level markets brighten the political, economic and business environment outlook, which are anticipated to have a substantial impact on the growth of the contactless payment market. Some key country and region included in the contactless payment market report as follows:
| Regions | Countries |
|---|---|
| North America | United States, Canada |
| Latin America | Brazil, Mexico, Argentina, Colombia, Chile, Rest of Latin America |
| Europe | Germany, United Kingdom, France, Italy, Spain, Russia, Netherlands, Switzerland, Belgium, Sweden, Austria, Norway, Denmark, Luxembourg, Ireland, Finland, Rest of Europe |
| Asia Pacific | China, India, Japan, South Korea, Australia & New Zealand, Indonesia, Singapore, Malaysia, Thailand, Rest of Asia Pacific |
| Middle East and Africa | GCC Countries, South Africa, Nigeria, Egypt, Turkey, Morocco, Israel, Kenya, Rest of MEA |
Contactless Payment Market Research Report Covers In-depth Analysis on:
- Contactless payment market detailed segments and segment-wise market breakdown
- Contactless payment market dynamics (Recent industry trends, drivers, restraints, growth potential, opportunities in contactless payment industry)
- Current, historical and forthcoming 10 years market valuation in terms of contactless payment market size (US$ Mn), share (%), Y-o-Y growth rate, CAGR (%) analysis
- Contactless payment market demand analysis
- Contactless payment market regional insights with region-wise market breakdown
- Competitive analysis – key companies profiling including their market share, product offerings, and competitive strategies.
- Latest developments and innovations in contactless payment market
- Regulatory landscape by key regions and key countries
- Contactless payment market sales and distribution strategies
- A comprehensive overview of parent market
- A detailed viewpoint on contactless payment market forecast by countries
- Mergers and acquisitions in contactless payment market
- Essential information to enhance market position
- Robust research methodology
- Frequently Asked Questions -
What is the impact of contactless payment technology on consumer behavior?
Contactless payment technology has significantly enhanced consumer convenience, providing a faster, more secure method for transactions. This shift has led to increased adoption, particularly among younger and tech-savvy users.
How is the growth of mobile payments influencing the contactless payment market?
The rise of mobile payments has boosted the contactless payment market by offering consumers an easy, quick, and secure way to make transactions through smartphones and wearable devices, further accelerating market growth.
What factors are driving the adoption of contactless payments in the retail sector?
The retail sector is adopting contactless payments due to factors like enhanced transaction speed, improved customer experience, and the growing demand for secure, frictionless payment methods among consumers.
