Desires for Contactless Payments On the Rise

Contactless Payment Market To Witness Steady Growth of 15% During 2020-2025
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According to a recent study from market research firm Global Market Insights, the contactless payment market is set to grow from its current market value of more than $40 billion to over $100 billion by 2026, gaining remarkable traction over the 2020 to 2026 period.
The worldwide contactless payment market is poised for a considerable expansion in the years ahead, driven by its increasing benefits such as high safety and security. These payment solutions are often embedded with the same protection as that of chip & PIN payments, making them much more reliable than hard cash. Also, companies have been working to ensure that contactless cards and devices are integrated with numerous layers of security to protect the user from fraudulent transactions, making them an ideal choice for myriad applications.

The ongoing COVID-19 pandemic has provided an unexpected impetus to the growth of contactless payment industry. Driven by nationwide lockdowns and the imposition of social distancing measures, these payment solutions have been deployed on a very large scale since the last few months.

With respect to the type of device, contactless payment market is divided into PoS terminals and smart cards. Of these, PoS terminals segment is anticipated to depict substantial growth on account of the rising implementation of numerous technologically advanced solutions that enable convenient, safe, and speedy transactions.

With respect to the application segment, contactless payment industry is divided into retail, warehouse and logistics, hospitality, healthcare, entertainment, transportation, and others. Of these, the retail segment is estimated to depict an appreciable growth rate, driven by the surge in the demand for immediate transfer settlements from e-commerce retailers and merchants. Since contactless payment solutions provide a highly competitive edge to the regional retail and e-commerce businesses by ensuring a rather affordable and quicker mode of transaction than the legacy systems, they are rather popular in the retail industry.

Another major application area that provides a push to the overall contactless payment industry is the hospitality sector. Increasing demand for advanced contactless PoS systems from restaurants and resorts so as to ensure a rather pleasant customer experience through secure and quick transactions will augment contactless payment market share from the hospitality sector.

Regionally speaking, contactless payment market is segmented into Europe, Asia Pacific, North America, Middle East and Africa, and Latin America. Of these, APAC is anticipated to emerge as a highly lucrative regional revenue pocket for contactless payment industry, given the rising penetration of smartphones across the emerging nations of the region. In addition, the region is remnant of numerous initiatives brought forth by governments, pertaining to the increase in digital transactions. Also, the number of e-commerce users in the region has been on a rise lately, increasing the adoption of contactless payments across SMEs, in regions such as India and China, thereby augmenting the APAC business outlook.

Latin America is another region that is poised for substantial growth. Rising number of government-led initiatives subject to the adoption of contactless payment solutions so as to promote the cashless economy culture will proliferate the regional industry expansion.

Governments worldwide have been playing an intrinsic role in increasing the adoption of contactless systems in their economies, which will add impetus to the market growth. Additionally, they are also concentrating in developing their own advanced contactless payment solutions – for example, Faster Payments – from the UK, FAST – from Singapore, Swish – from Sweden, etc.

However, issues related to interoperability among various RTP network schemes such as the Society for Worldwide Interbank Financial Telecommunications (SWIFT) and The Clearing House (TCH) in tandem with surging cybersecurity concerns, may restrain the market growth to some extent over the forecast period.

Source: https://www.gminsights.com/industry-analysis/contactless-payment-market

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