The global contactless payment market size was US$ 1,493.2 billion in 2020 and expected to reach US$ 5,490.2 million by 2027; this converts into a compound annual growth rate (CAGR) of 21.1% for the forecast period.
Contactless payment systems consist of several devices such as smart cards, smartphones, credit & debit cards, and others. These payments are carried out in close physical proximity ensuring security and preventing illegal access during the transactions. Factors such as increasing adoption of digital payments, technological advancements in payment devices and rising demand for mobile & wearable payment devices are boosting the growth of the contactless payment market.
On the basis of device, the smartphones & wearables segment held the largest market share in 2020, while the point-of-sales (POS) terminals segment accounted for 27.7% market share in the same year followed by the smart cards segment.
On the basis of application, the food & groceries segment held the largest market share in 2020, while the restaurant & bars segment accounted for 20.6% market share in the same year followed by the consumer electronics segment.
The ongoing pandemic situation is expected to favorably impact the contactless payment market and is anticipated to grow significantly from mid-2021. The market is expected to maintain its dominance in the upcoming years due to expected change in the payment behavior by users and firms across the world. The World Health Organization (WHO) has been guiding customers to maintain social distancing and avoid cash handling.
This is expected to create growth opportunities for the market over the forecast period. The global health crisis has accelerated the adoption of contactless payments options such as EMV cards. This enables the consumers to tap against point-of-sale (POS) terminals to avoid direct contact. Similarly, mobile wallets such as Apple Pay, Google Pay, and Samsung Pay can used for in-store and online payments.
Among the European countries, Germany, France and U.K. have the highest market share. The market in Europe is analyzed across the UK, Germany, France, Spain, Italy, and rest of Europe. The contactless payment market in Europe is the largest in terms of market size due to continuous technological advancement in the payments sector and increase in adoption of contactless payments technology among the retailers in this region. The western European countries are economically and technologically advanced and have adopted contactless payment options on larger scale. The total spending in digital platforms has grown in these countries with the increasing flow of cards by companies, such as Visa and Mastercard.
Asia-Pacific is considered as an emerging market and is expected to occupy the major market share in the upcoming years. China, India, and Singapore are some of the major countries that drive the growth of the contactless payments market in the region. It is considered as the fastest-growing region globally, owing to emerging economies, increase in disposable income, awareness toward contactless payments, and adoption of advance technologies in the payments industry in the region.
Some of the key players operating in the global contactless payment market includes Gemalto N.V., Giesecke & Devrient GmbH, Visa Inc., Heartland Payment Systems, Verifone Systems Inc., Ingenico Group SA, On Track Innovations (OTI) Ltd, IDEMIA, Thales Group, Wirecard AG among others. Most of the players are focusing on implementing several types of technology to expand their payment platform performance. In order to increase speed, convenience and speed for retail payment applications, vendors are integrating blockchain technology. They are also focusing on business strategies, such as product launch, collaborations and partnerships to enhance product portfolios and increase customer base.
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