The COVID-19 has given contactless payments technology the boost it needed for widespread global adoption, as consumers worldwide started avoiding cash in fear of spreading the virus.
According to data presented by BuyShares.co.uk, contactless payments are expected to continue rising worldwide and hit a $665bn transaction value in 2021. The impressive growth is set to continue in the following years, with the total value of contactless transactions doubling up and reaching over $1.6trn by 2024.
Contactless payments are a quick, secure, and easy way to purchase products or services by simply holding a card or smartphone up to a payment reader for the transaction to proceed.
These tap-and-go payments became especially appealing to consumers amid the pandemic, allowing them to pay for goods and services without the need to swipe, enter a personal identification number, or sign for a transaction. Consumers can also make contactless payments by connecting their credit cards with a payment app like Apple Pay or Google Pay on their smartphone or smartwatch.
Over the years, this payment method became very popular in China, Australia, Canada, South Korea, and the United Kingdom. However, the COVID-19 fuelled the growth of contactless transactions among American consumers as well.
Last year, the global contactless payments market was worth $482.7bn, revealed the Statista and Juniper Research data. As the number of people choosing tap-and-go payments continues rising, this figure is expected to jump by another 40% in 2021. Statistics show the following years are set to witness a surge in contactless payments, with their value rising by another $1 trillion by 2024.
China and the Far East is the leading region for this type of transactions, generating more than half of all contactless payments globally. In 2021, countries from the region are expected to generate $313.3bn worth of transactions, 38% more than a year ago. By 2024, this figure is forecast to surge by 170% and hit an $849.1bn value.
Contactless transactions in LatAm to surge by 851%
As the second-largest market globally, North America is expected to generate $194.2bn worth of contactless transactions in 2021, up from $156.5bn a year ago. Statistics indicate this payment method is expected to gain popularity among American consumers in years to come and hit almost $310bn value by 2024.
Last year, the European contactless payments market was worth $63.5bn. This figure is expected to triple and hit $224.1bn in the next three years.
However, Latin America is set to witness the most impressive growth of tap-and-go payments in this period.
Before the pandemic, contactless payments In Latin America were still emerging. Just a handful of issuers launched contactless cards, with several banks which developed contactless mobile wallets. However, the user uptake was minimal. The Americas Market Intelligence Survey revealed that in 2019, more than half of Latin American consumers were underbanked, and up to 90% of retail payments still took place in cash. However, the COVID-19 changed that.
In 2020, the Latin American contactless payments market was worth $4.6bn. Statistics show the total value of transactions is expected to jump by 165% YoY and hit $12.2bn in 2021. By 2024, this figure is forecast to soar by 851% and hit a $116.1bn value.