The Contactless Payments Market Is Estimated To Witness High Growth Owing To Rising Consumer Convenience
The contactless payments market is estimated to be valued at US$15782.66 Mn in 2023 and is expected to exhibit a CAGR of 13% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Contactless payments allow customers to purchase goods and services by waving or tapping their contactless payment cards, contactless mobile wallets, or other contactless devices near a contactless-enabled point-of-sale terminal without inserting or swiping a card. The increasing adoption of contactless payments cards and wearables like payment rings provides enhanced security and authentication compared to traditional payment methods.
Market Dynamics:
The contactless payments market is expected to witness significant growth due to rising consumer convenience. Contactless payments enable quick transactions that avoid long checkout lines. The tapping or waving motion necessary to complete contactless payments takes just seconds compared to traditional chip and PIN or magnetic stripe transactions. In addition, the increasing adoption of mobile wallets is also fueling market growth. Mobile wallets allow users to make payment from their smartphones through NFC technology and facilitate secure and frictionless purchases. Furthermore, the COVID-19 pandemic has accelerated the adoption of contactless payments as consumers preferred tap and pay options over other payment methods for safety and hygiene reasons during the crisis.
SWOT Analysis
Strength: Contactless payments offer convenience and speed for consumers as transactions can be completed within seconds without the need to insert a card or enter a PIN. They provide enhanced security compared to traditional card payments as stolen card details cannot be used for fraudulent transactions. Contactless payments allow merchants to process more transactions in less time leading to improved operational efficiency.
Weakness: Contactless payments require compatible POS terminals at merchant locations limiting their use. There are also concerns around data security as contactless cards and devices can be read from a distance raising possibilities of skimming. Lack of consumer awareness regarding the technology and benefits of contactless payments poses a challenge for widespread adoption.
Opportunity: Growth of digital payments and decline of cash-based transactions present a huge opportunity for contactless payments. Partnerships between fintech companies and banks can help expand acceptance infrastructure. Increasing adoption of smartphones and wearables provides an avenue to tokenize cards and enable tap-and-pay with these devices. Emerging blockchain technology can help address data security issues spurring further growth.
Threats: Strict regulations around data storage and sharing pose compliance challenges. Technology changes like biometrics and mobile wallets threaten to make contactless cards obsolete. Slow upgrade of legacy payment systems acts as a hindrance. Privacy concerns due to possible tracking of spending patterns can reduce consumer confidence.
Key Takeaways
The Global Contactless Payments Market Size is expected to witness high growth, exhibiting CAGR of 13% over the forecast period, due to increasing digitization and proliferation of smartphones. Rising demand for secure and seamless payment solutions from consumers is a key driver for market growth.
Regional analysis: North America dominates the contactless payments market currently due to high adoption of advanced payment technologies driven by presence of global players. Europe is the second largest market driven by supportive regulations and infrastructure push by EU states and banks. Asia Pacific is expected to be the fastest growing market over the next decade led by countries like India and China where cash usage is still prominent but digital payments are gaining momentum backed by government initiatives.
Key players: Key players operating in the contactless payments market include Thales Group, Infineon Technologies AG, Ingenico Group, Wirecard, VeriFone, Inc., Giesecke+Devrient GmbH, IDEMIA, Track Innovations LTD., Identiv, Inc., CPI Card Group Inc., Setomatic Systems, Valitor, PAX, PINPAD, Mobeewave, alcineo, and Paycor, Inc. These players are focusing on strategic partnerships and investment in technologies like tokens, biometrics and mobile wallets to strengthen their offerings and market share.