The revenue of Contactless Payment Market crossed $40 billion in the year 2019 and is predicted to touch $100 billion till 2026, growing at 15% between the years 2020 and 2026; as per the research done by Global Market Insights, Inc.
The latest launch of ‘IPOS bric’ by renowned financial technology leader IPOSUP has brought to light the significance of contactless payments in today’s crucial times. IPOSUP’s ‘IPOS bric’ is a next generation chip and PIN & contactless card payment device for contactless only acceptance and works with the IPOS WALLET mobile app. With this free card payments portable device, the fintech company has now become the first of its kind to deliver a “PIN on Glass”, standalone mobile payment solution which uses the merchant’s Android smartphone to enter the cardholder PIN as opposed to an external expensive PIN entry device.
IPOSUP’s initiative goes on to depict how convenient contactless payments can be. Perhaps their efficiency and ease of usage have been responsible in propelling their usage across various businesses. Indeed, Global Market Insights, Inc., estimates that owing to rising consumer preference for toward digital transformation and increasing penetration of smartphones, contactless payment market size will cross USD 100 billion by 2026.
The popularity of contactless payments had already been on a high, however, it has soared tremendously since the COVID-19 outbreak, given nationwide lockdowns and the enforcement of social distancing norms. The robust shift toward becoming cashless economies is also responsible for service adoption, as governments encourage digital payment providers to deliver digital payment forms to consumers. In fact, an HSBC Holdings report suggests that between 2018-2029, the volume of contactless card transactions surged by 24% in the UK.
Entailed below are a few trends that are likely to characterize contactless payment market in the years to come:
Retailers worldwide have been robustly adopting mobile payment applications, such as Samsung Pay, PayPal, Apple pay, AliPay, and WeChat Pay to accept payments, given changing consumer lifestyles. Retail stores have also been rapidly adopting POS terminals owing to rising consumer preference for mobile wallets.
Recently in January 2020, Blackhawk Network Holdings, Inc., claimed that mobile wallet adoption is may generate close to USD 190 billion in terms of transactions, in the U.S. by 2021. Retailers are majorly integrating mobile wallets along with customer loyalty cards as well as promotions to deliver an enhanced shopping experience for consumers.
Merely a couple of weeks ago, Kroger’s QFC division was out testing NFC (near-field communication) contactless payment at the checkout counters in all of its 61 stores located at Washington’s Puget Sound area and the metropolitan Portland, Ore. In this pilot program, QFC customers will pay for their purchases by means of placing their contactless chip card or smartphone near a PIN pad in the checkout lane, and then payment data will be transmitted to the terminal for processing the transaction.
RFID-based contactless payment market will depict commendable gains, as more and more merchants are now adopting smart payments so as to enhance customer experience and increase profits. Since cards incorporated with RFID technology deliver faster, convenient, and secure payment processing as opposed to chip-and-PIN payments cards, this business has been witnessing quite some traction.
This technology involves a memory chip or tag which stores data and RFID readers. It is massively used in warehouse, logistics, and toll collection transactions.
Apart from the retail domain, the healthcare industry is anticipated to emerge as a pivotal revenue ground for contactless payment providers. Hospitals, insurance companies, and clinics have been majorly adopting contactless smart card solutions to enable quick transactions. Medical smart cards can also be used to save patient information in an orderly fashion. What’s more, they provide secure access to portable medical records and emergency medical information, reducing healthcare frauds.
Contactless payments also help medical care platforms to implement numerous other applications as required and enable compliance with regulatory mandates and government initiatives.
The North America industry is expected to depict commendable traction between 2020 to 2026, driven by the rising adoption of advanced payment techniques in the transportation, healthcare, and retail sectors. The Mastercard Survey reveals that in 2020, over 56% of consumers used contactless cards, thereby enabling easy payment solutions at retail outlets. The use of contactless payments in the region has increased by a mammoth 150% in March 2019. Powered by the presence of important players and the extensive internet penetration in the region, North America is certain to come up as a major growth ground for contactless payment providers.
While COVID has acted as a major trigger for the rise in the adoption of contactless payments, the trend is expected to continue even during the post-corona era, given the convenience offered by this service. As more and more companies strive to bring in mobile wallets and similar, and end-use firms adopt the same, contactless payment market share will witness a tremendous rise.