Global Contactless Payment Market Size By Type (Smartphone-Based Payments & Card-Based Payments), By Application (Retail, Transportation & Healthcare), By Geographic Scope And Forecast

Contactless Payment Market Size And Forecast

Contactless Payment Market size was valued at USD 13.29 Billion in 2024 and is projected to reach USD 24.75 Billion by 2031, growing at a CAGR of 8.08% from 2024 to 2031.

The Contactless Payment Market refers to the ecosystem surrounding payment methods that allow consumers to make transactions without physical contact with the payment terminal. Utilizing near field communication (NFC), radio frequency identification (RFID), or similar technologies, contactless payment systems enable swift, secure, and convenient transactions, enhancing the overall payment experience for consumers and merchants alike.

Global Contactless Payment Market Dynamics

The key market dynamics that are shaping the global contactless payment market include

Key Market Drivers

• Consumer Convenience Contactless payments are a faster and more convenient way to pay for goods and services than traditional methods such as cash or chip-and-pin cards. This convenience is a key driver of adoption, as consumers want to streamline their shopping experiences.
• COVID-19 Pandemic The COVID-19 outbreak has increased the use of contactless payment options as consumers emphasize hygiene and safety. Contactless payment removes the requirement for physical contact with payment terminals, lowering the risk of virus transmission and increasing the demand for touchless transactions.
• Government Initiatives Many governments around the world are supporting the use of contactless payments as a way to minimize cash usage and improve transaction efficiency. For example, the Indian government has established several programs to promote digital payments, such as the Bharat QR code system.
• Enhanced Security and Fraud Prevention Contactless payment systems use advanced security features like tokenization and encryption to reduce the risk of fraud as compared to standard magnetic stripe cards. Furthermore, contactless transactions frequently demand identification for higher-value purchases, which improves security and promotes confidence in consumers.

Key Challenges

• Security ConcernsDespite advances in security measures such as tokenization and encryption, contactless payments remain susceptible to fraud, including illegal transactions and data theft. Criminals may exploit technological flaws or intercept transaction data during wireless communication between the payment device and the terminal, posing risks to both customers and companies.
• Consumer Trust and Education Many consumers are suspicious of the security of contactless payment technology and may be hesitant to use it due to privacy and data security concerns. Educating consumers about the benefits and security features of contactless payments is critical for fostering trust and broad acceptance of the technology.
• Infrastructure and Compatibility To ensure widespread adoption of contactless payment technology, businesses must invest in upgrading their point-of-sale terminals and payment systems to enable NFC technology. However, the cost and complexity of adopting new infrastructure may be too expensive for small businesses, resulting in uneven adoption and compatibility concerns across various retail contexts.
• Transaction Limits and Authentication To reduce the risk of fraud, card issuers or regulatory agencies often impose transaction limits on contactless payment transactions. While these limits assist maintain consumers from illegal transactions, they may annoy users who frequently make large purchases or need to divide payments. Furthermore, the authentication methods necessary for transactions exceeding the contactless payment limit, such as PIN entry or biometric verification, might add friction and reduce the convenience of contactless payments.

Key Trends

• Collaboration across Industries Fintech startups, payment processors, and technology providers are working together to drive innovation in the contactless payment industry. Partnerships and alliances strive to develop innovative solutions, increase interoperability, and address regulatory constraints, thereby promoting market growth and innovation.
• Biometric Authentication Contactless payments are combining biometric authentication technologies, such as fingerprint and facial recognition, to improve security and speed the payment process. Biometric authentication protects against fraud while simplifying the user experience.
• Rise Wearable Payments Wearable gadgets, such as smartwatches, fitness trackers, and payment-enabled wristbands, are gaining popularity as payment methods. These gadgets use NFC technology to enable contactless payments, giving consumers a simple and smooth way to conduct purchases while on the go.
• Expansion of Contactless InfrastructureMerchants and financial institutions are increasing their investment in contactless payment infrastructure, such as contactless-enabled terminals and POS systems. This infrastructure expansion increases the acceptance of contactless payments across industries and continents.

Global Contactless Market Regional Analysis

Here is a more detailed regional analysis of the global contactless payment market

North America

• North America emerged as the contactless payment market leader, accounting for more than 30.0% of worldwide sales in 2021. The region’s dominance is supported by strong investments in cutting-edge technical solutions for contactless payments, specifically NFCs (Near Field Communication) and RFIDs. As North America experiences a surge in digitization, combined with the growing prevalence of the Internet of Things (IoT) and big data analytics, there is a palpable expectation of increased demand for advanced hardware and software solutions among the region’s contactless payment solution providers. This optimistic trend bodes well for the regional market’s growth, as industry players compete to innovate and fulfill the changing needs of both businesses and consumers.
• Furthermore, in Canada, consumers are increasingly choosing digital wallets as their preferred payment method. This trend is encouraged by digital wallets’ convenience and simplicity, which allow users to easily load their debit card information onto their mobile devices and make purchases in a few steps. The increasing use of digital wallets reflects a broader shift toward contactless payment systems, driven by consumer expectations for speed, security, and convenience.
• The region continues to lead the way in advancing contactless payment technology and usage, the area is positioned to maintain its worldwide market dominance, driving innovation and redefining the future of digital transactions.

Asia Pacific

• Asia Pacific is expected to be the fastest-growing regional market for contactless payments throughout the projected period. This forecast development is being fueled by the region’s significant presence and concentration of prominent mobile wallet providers such as Alipay, Paytm, PhonePe, and Google Pay. The strong presence of these established businesses demonstrates the contactless payment market’s significant potential for growth and innovation across Asia Pacific.
• Furthermore, good economic conditions and extensive acceptance of mobile wallets in a variety of retail applications boost the region’s growth possibilities. These characteristics, taken together, offer a favorable environment for the contactless payment market’s rapid expansion in Asia Pacific.
• Also, the Japanese government’s plans to digitize financial services are likely to accelerate the expansion of the region’s contactless payment sector. Japan’s persistent efforts to turn its financial landscape into a digital platform are consistent with global trends in digitization and technical innovation. These measures, which promote the implementation of contactless payment solutions and nurture a digital-first approach to financial transactions, are positioned to stimulate market growth and push the adoption of contactless payment technology across a variety of industries.
• As Asia Pacific continues to see significant technology improvements and a shift toward digitalization, the region is positioned as a key driver of innovation and growth in the worldwide contactless payment market.

Global Contactless Payment MarketSegmentation Analysis

The Global Contactless Payment Market is Segmented on the basis of Type, Application, and Geography.

Contactless Payment Market, By Type

• Smartphone-Based Payments
• Card-Based Payments
• Credit Cards
• Debit Cards

Based on Type, the market is bifurcated into Smartphone-Based Payments and Card-Base d Payments. The contactless payment market is expanding rapidly, owing to an increase in smartphone payment usage, particularly among younger generations. Smartphone digital wallets are growing increasingly popular and wearable technology such as payment rings and bands is expected to expand much more. Traditional contactless cards, on the other hand, continue to be essential, with credit, debit, and other card-based choices experiencing substantial development in a variety of sectors.

Contactless Payment Market, By Application

• Retail
• Consumer Electronics
• Fashion & Garments
• Others
• Transportation
• Healthcare
• Hospitality

Based on Application, the market is segmented into Retail, Transportation, Healthcare and Hospitality. Retail now leads the contactless payment market, thanks to the rise of quick and convenient “tap-and-go” transactions. Contactless payments are gaining popularity among retailers due to its benefits, which include shorter checkout times, more sales, and enhanced efficiency. This trend is projected to continue as shops use technology to broaden their reach and capitalize on consumers’ increasing preference for contactless payments.

Contactless Payment Market, By Geography

• North America
• Europe
• Asia Pacific
• Rest of the World

On the basis of Geography, the Global Contactless Payment Market is classified into North America, Europe, Asia Pacific, and the Rest of the world. North America accounted for the largest market share of followed by Europe. Growing demand for effective emergency care and increasing adoption of mobile surgery centers are anticipated to drive the industry during the forecast period.

Key Players

The “Global Contactless Payment Market” study report will provide valuable insight with an emphasis on the global market. The major players in the market are MasterCard, Thales, Visa Inc., PayU, Amazon.com, Inc, Giesecke & Devrient GmbH, Apple Inc, PayPal Holdings Inc, American Express Company, and Alibaba. com, VeriFone, Wirecard, InsideSecure, Gemalto, Giesecke+Devrient, Ingenico, Oberthur Technologies S.A., On Track Innovations, PAX Technology, Inc., and Proxama Plc. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

Our market analysis also entails a section solely dedicated to such major players wherein our analysts provide an insight into the financial statements of all the major players, along with product benchmarking and SWOT analysis. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

Contactless Payment Market Recent Developments

• In July 2023, PayPal announced the launch of Tap to pay technology for Venmo and PayPal Zettle businesses in the United States. Small companies may now accept contactless payments including cards and digital wallets directly from their mobile devices without the need for additional gear or upfront fees.
• In August 2022, the Bank of New Zealand (BNZ) announced BNZ Pay, a mobile app for stores and merchants that turns an Android device into a contactless payment terminal. Retailers who open a BNZ account can use BNZ Pay without paying any monthly fees until January 2024, thanks to an agreement between BNZ, Quest Payment Systems, and Visa.
• In June 2022, Giesecke+Devrient (G+D), an announced provider of security technology, disclosed the acquisition of Valid USA’s payment and identification solutions division. With this initiative, G+D intends to accelerate its expansion in the United States, one of the world’s most important payment and identity markets. The enhanced company scale will aid G+D clients in dealing with recurring supply chain difficulties that affect the whole industry.
• In February 2022, PAX Technology, Inc., one of the world’s major global payment solution providers and the #2 mobile POS vendor, was tasked with offering contactless and secure payment options at the WM Phoenix Open.

Report Scope

Ace Matrix Analysis

Contactless Payment Market continues to witness robust growth driven by factors such as increasing adoption of mobile payment solutions, rising demand for quick and secure payment methods, and advancements in technology facilitating seamless transactions. With consumers increasingly prioritizing convenience and safety, the contactless payment market is poised for sustained expansion, presenting lucrative opportunities for stakeholders across the payment ecosystem. However, ongoing efforts to address security concerns and enhance interoperability will be critical in ensuring the continued success and widespread adoption of contactless payment solutions.

Research Methodology of Market Research

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• Qualitative and quantitative analysis of the market based on segmentation involving both economic as well as non-economic factors• Provision of market value (USD Billion) data for each segment and sub-segment• Indicates the region and segment that is expected to witness the fastest growth as well as to dominate the market• Analysis by geography highlighting the consumption of the product/service in the region as well as indicating the factors that are affecting the market within each region• Competitive landscape which incorporates the market ranking of the major players, along with new service/product launches, partnerships, business expansions, and acquisitions in the past five years of companies profiled• Extensive company profiles comprising of company overview, company insights, product benchmarking, and SWOT analysis for the major market players• The current as well as the future market outlook of the industry with respect to recent developments which involve growth opportunities and drivers as well as challenges and restraints of both emerging as well as developed regions• Includes in-depth analysis of the market of various perspectives through Porter’s five forces analysis• Provides insight into the market through Value Chain• Market dynamics scenario, along with growth opportunities of the market in the years to come• 6-month post-sales analyst support

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