Global Contactless Payments Market Report and Forecast 2024-2032

Global Contactless Payments Market Size

The global contactless payments market attained a value of USD 2,430.45 billion in 2023. The market is further expected to grow in the forecast period of 2024-2032 at a CAGR of 20.1% to reach USD 12,633.98 billion by 2032.

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Contactless Payments Market Growth

The rise in the E-Commerce Industry is Driving the Market Growth of Contactless Payment

The increase in e-commerce sales worldwide is one of the main factors boosting the growth of the contactless payments market. People across the world are using digital wallets and contactless cards for making online payments. Contactless payment is considered a safer option when compared to payment by cards as fraudsters can steal the information from magnetic stripes on the back of payment cards. Contactless payment cuts down the risk for both the consumer and the merchant. Thus, these favourable factors are expected to support the growth of the market in the coming years.

The contactless payments market value is further anticipated to be increased by the growing penetration of smartphones and the Internet, especially in emerging economies. The introduction of favourable government initiatives aiding the development and expansion of contactless payment platforms is also expected to catalyse market growth in the coming years.

Contactless Payments Market Trends

The rise of contactless wearable devices is a crucial trend in the contactless payments market. Wearable devices such as smartwatches are becoming popular among Gen Z consumers across the world. Furthermore, voice-based smart payments are expected to become popular in the coming years with the growing adoption of smart speakers.

Recent Developments

As per the contactless payments market analysis, the Massachusetts Bay Transit, USA, announced in July 2024 that contactless payments can be now accepted in buses and trollies. This will make travelling through the public transit systems easier for commuters, especially students.

Industry Outlook

As per the contactless payments industry analysis, in the second half of 2022, approximately 53.8% of the overall card-based payments in the Euro region were contactless. Data showed that in 13 out of 19 Euro countries, more than half of the card-based payments were contactless, signifying this technology's rise.

According to the reports by Worldline India, around 31% of the total transactions in supermarkets in India were contactless in January 2022. This payment method was readily adopted in end-use sectors such as pharmacies, food stores, and quick-service restaurants, among others.  Furthermore, Delhi, Telangana, Gujarat, and Karnataka were some of the -prevalent regions in the country that witnessed the highest adoption rate of contactless payments which can contribute to the contactless payments industry revenue.

As per the data reports from Southeast Asia, the total number of people using contactless payment methods such as PayPal, e-wallets, and Google Pay, among others, reached more than 140 million in 2022. At 97%, Singapore had the highest adoption rate, followed by Malaysia at 96% and Thailand at 94%. A 2022 report from Visa Consumer Payments also states that around 55% of Malaysian customers can go a week without relying on cash for making payments, signifying the increasing usage of contactless payments in the country.

A survey conducted by Forbes Advisor in America shows that around 53% of people depend on digital wallets for their day-to-day payments. Meanwhile, around 47% of the users admitted that they spend more money while using digital wallets compared to cash transactions, which can indicate growth of the contactless payments industry. Data further shows that PayPal is the most popular digital wallet in the country with 69% of surveyors choosing it as the first option, followed by Google Pay at 56% and Apple Pay at 53%.

The Growth of the Global Contactless Payments Market Driven by Convenience and Security

• Convenience: The ease and speed of contactless transactions enhance consumer experience and drive market adoption.

• Security: Enhanced security features, such as tokenization and encryption, increase consumer trust in contactless payments and aid contactless payments demand growth.

• COVID-19 Impact: The COVID-19 pandemic accelerated the adoption of contactless payments due to hygiene and social distancing concerns.

• Technological Advancements: Innovations in Near Field Communication (NFC) and Radio Frequency Identification (RFID) technologies support the expansion of contactless payment solutions.

Challenges Impacting the Growth of the Global Contactless Payments Market Include Infrastructure Limitations and Fraud Risks

• Infrastructure Limitations: Limited infrastructure in certain regions can hinder the widespread adoption of contactless payment systems.

• Fraud Risks: Potential risks of fraud and data breaches require continuous enhancements in security measures and can negatively impact contactless payments demand forecast.

• Consumer Resistance: Some consumers remain resistant to adopting new payment technologies due to familiarity with traditional methods.

• Regulatory Compliance: Navigating complex regulatory landscapes and ensuring compliance with payment and data protection laws can be challenging.

Opportunities in the Global Contactless Payments Market Driven by Mobile Payment Integration and Emerging Markets

• Mobile Payment Integration: The integration of contactless payments with mobile wallets and apps presents significant growth opportunities.

• Emerging Markets: Expanding into emerging markets with increasing smartphone penetration and digitalization supports market growth.

• E-commerce Growth: As per the contactless payments market dynamics and trends, the rise of e-commerce and online shopping drives demand for seamless and secure contactless payment solutions.

• Financial Inclusion: Promoting financial inclusion through contactless payment solutions for unbanked and underbanked populations offers substantial potential.

Setbacks Faced by the Global Contactless Payments Market Share Due to Technological Disparities and Market Saturation

• Technological Disparities: Disparities in technology adoption and internet connectivity across regions can impact market uniformity.

• Market Saturation: In developed regions with high penetration rates, market saturation may limit further growth opportunities as well as contactless payments demand. 

• Interoperability Issues: Ensuring interoperability between different contactless payment systems and devices can be a technical challenge.

• Economic Fluctuations: Economic downturns can impact consumer spending and slow down the adoption of contactless payment technologies.

Several Key Factors Impact the Price Of Contactless Payment Solutions:

• Technology Development: The advancement of technologies such as Near Field Communication (NFC) and Radio Frequency Identification (RFID) plays a crucial role in the expenses associated with contactless payment systems.

• Hardware Costs: The price of contactless payment terminals, readers, and related hardware influences overall costs and can hinder contactless payments market opportunities. These prices are affected by the cost of raw materials, manufacturing processes, and technological sophistication.

• Software Development and Maintenance: The cost of developing, improving, and maintaining the software used in contactless payment systems is an important factor.

• Security Measures: Implementing robust security protocols to protect against fraud and data breaches adds to the cost. Advanced encryption, tokenization, and compliance with security standards (e.g., PCI DSS) are essential for secure transactions.

• Regulatory Compliance: Implementing robust security measures to protect against fraud and data breaches can lead to higher costs. It is essential to use advanced encryption and tokenization and to comply with security standards like PCI DSS to guarantee secure transactions.

• Transaction Fees: Payment processors charge transaction fees for each contactless payment that can contribute to the contactless payments market revenue. These fees can vary based on the volume of transactions, the type of card used, and agreements with payment networks.

• Infrastructure Investment: Building and maintaining the infrastructure such as network connectivity and data storage, contributes to the overall cost.

• Interchange Fees: Fees paid between banks for the acceptance of card-based transactions impact the overall cost of contactless payments as well as demand of contactless payments market. These fees are typically passed on to merchants and, ultimately, consumers.

• Merchant Fees: Merchants may incur costs for setting up and maintaining contactless payment systems, including terminal installation, integration with existing systems, and transaction fees.

• Economic Conditions: General economic conditions, including inflation, currency exchange rates, and market competition, influence the pricing strategies of contactless payment providers.

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Contactless Payments Industry Segmentations

Contactless payments refer to a mode of payment that does not require the use of physical money. It allows customers to pay for goods and services through debit cards, credit cards, and smart cards, amongst others, including mobile devices that use near frequency communication (NFC) or radio frequency identification (RFID), such as chip cards or bank mobile apps, without the need to enter the pin or swipe the card or sign the transaction.

The major devices types using contactless payments are:

• Smartphones and Wearables

• Smart Cards

• Post Terminals

The contactless payments market can be broadly categorised on the basis of its applications into:

• Food and Groceries

• Pharmacy and Drug Stores

• Restaurants and Bars

• Consumer Electronics

• Media and Entertainment

• Others

The EMR report looks into the regional markets of contactless payment like North America, Europe, the Asia Pacific, Latin America, and the Middle East and Africa.

Competitive Landscape

The report presents a detailed analysis of the following key players in the global contactless payments market, looking into their capacity, market shares, and latest developments like capacity expansions, plant turnarounds, and mergers and acquisitions:

• Pax Technologies Pvt. Ltd.

• Proxama PLC

• VeriFone Holdings, Inc.

• Wirecard AG

• On Track Innovations Ltd.

• Ingenico Group S.A.

• Others

The comprehensive report looks into the macro and micro aspects of the industry. The EMR report gives an in-depth insight into the market by providing a SWOT analysis as well as an analysis of Porter’s Five Forces model.

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Contactless Payments Market Regional Analysis

The Asia Pacific is expected to be a Significant Regional Market for Contactless Payment

The Asia Pacific is expected to be a major regional market for contactless payments in the coming years and is projected to witness robust growth over the forecast period. The contactless payments industry in the region is being driven by the rising penetration of smartphones and flourishing e-commerce, leading to an increased adoption of digital wallets. QR codes are gaining increasing popularity in the Asia Pacific, which is further propelling the growth of the market in the region. The COVID-19 pandemic has also positively affected the contactless payments industry in the Asia Pacific region. Online shopping became necessary during lockdowns and various restrictions on physical stores amidst the pandemic, further fuelling the growth of the digital payment industry in the region.

Within the Asia Pacific, India is witnessing strong growth in terms of the adoption of digital payments. The contactless payment market has been witnessing robust growth in India, especially since the demonetisation of a few currency notes, which happened in 2016. The introduction of favourable government initiatives and the development of the UPI system has further propelled the growth of the market.

Key Highlights of the Report

Contactless Payments Market Report Snapshots

Contactless Payments Market Size

Contactless Payments Market Growth

Contactless Payments Market Trends

Contactless Payments Companies

Contactless Payments Market Regional Analysis