Africa contactless payments market size was valued at US$ 781.72 million in 2023 and is expected to reach US$ 1536.57 million by 2031, registering a CAGR of 8.8% during 2023–2031. Voice-based payments with voice match confirmation are likely to remain a key market trend.
The Africa contactless payment market is driven by the increasing adoption of digital payment platforms and contactless payment technologies, the continuous innovation and advancement in payment security technologies and solutions; a surge in demand for faster, safer, and easier payment methods; and a rise in government initiatives and support for developing smart payment infrastructure and solutions. The integration of IoT and AI in contactless payment technology and the untapped potential of emerging markets and regions are expected to offer lucrative opportunities in the market in the coming years. The contactless payment market is fragmented and highly competitive, with the wide presence of several regional and global players.
Contactless payment is a secure and convenient payment method using a smartphone, debit card, or credit card that uses radio frequency identification (RFID) technology and near-field communication (NFC). This payment method works by tapping or waving the payment device over a point-of-sale (PoS) terminal that has contactless payment technology. The method provides several benefits, such as reduced transaction time and friction, as customers do not have to enter their PIN or handle cash at the checkout. Moreover, it improves customer experience and trust, owing to it being safe and encrypted to prevent fraudulent purchases. It offers flexibility for payment devices, as customers can use their NFC-enabled smartphone, wearable device, or contactless card to make payments. It also provides loyalty benefits, as a few contactless payment systems are integrated with loyalty programs that offer discounts and rewards to customers.
Several government bodies across Africa are promoting digital payments and financial technologies. They have implemented policies and initiatives to encourage the adoption of contactless payments. Africa has witnessed rapid technological advancements, such as the widespread availability of smartphones and mobile internet connectivity. These factors have facilitated the adoption of contactless payment solutions, particularly mobile wallets. Payment providers, financial institutions, and technology companies in the region have formed strategic partnerships and collaborations to enhance the adoption and acceptance of contactless payments.
South Africa Reserve Bank announced the launch of a faster payment service, PayShap, in March 2023. PayShap is a low-value, real-time retail payment platform/scheme aimed at deepening the financial inclusion of consumers and small businesses by making digital payments more convenient, thus reducing the reliance on cash. Key features launched include instant payments by enabling fund transfers from one bank account to another and using a proxy, such as a mobile number, to transfer funds to a recipient. The request-to-pay feature is in development and will be launched in 2024. PayShap supports the Vision 2025 goals of financial inclusion, innovation and competition, and cost-effectiveness. Thus, rising government initiatives to promote digital payments drive the Africa contactless payment market growth.
The process of holding a chipped card or smartphone directly against the reader provides extra security to contactless payments. NFC is used by smartphones that have enabled mobile wallets, such as ApplePay. Contactless payment enables faster transactions and increased customer satisfaction and loyalty, as well as the adoption of new payment technologies, such as NFC and others, facilitating machine-to-machine communication and IoT integration. Several cards are equipped with NFC technology that allows tapping or waving near a receptive card reader for contactless payment.
Mobile devices are weaved or tapped near an NFC-equipped card reader, similar to an NFC-enabled credit card. Also, the EMV (short for Europay, Mastercard, and Visa) chip is the physical antennae necessary for RFID/NFC contactless payments using credit cards. While all EMV chips are capable of NFC contactless payments, the ability to do such a transaction relies on the payee. If the PoS or farebox collecting the payment is not able to process NFC payments, the chip is then used by inserting the card into the reader. Thus, technological advancements in contactless payment are expected to provide lucrative opportunities for the contactless payment market.
Key segments that contributed to the derivation of the Africa contactless payments market analysis are component, payment mode, and industry vertical.
The regional trends and factors influencing the Africa Contactless Payments Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses Africa Contactless Payments Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.
| Report Attribute | Details |
|---|---|
| Market size in 2023 | US$ 781.72 Million |
| Market Size by 2031 | US$ 1536.57 Million |
| Global CAGR (2023 - 2031) | 8.8% |
| Historical Data | 2021-2022 |
| Forecast period | 2024-2031 |
| Segments Covered |
By Component
|
| Regions and Countries Covered | Africa
|
| Market leaders and key company profiles |
The Africa Contactless Payments Market market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.
Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.
Major Companies operating in the Africa Contactless Payments Market are:
Disclaimer: The companies listed above are not ranked in any particular order.
The Africa contactless payments market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the Africa contactless payments market are listed below:
(Source: IBA Group a.s., Press Release, September 2024)
(Source: Mastercard, Press Release, February 2024)
The "Africa Contactless Payments Market Size and Forecast (2021–2031)" provides a detailed analysis of the market covering the areas mentioned below:
The List of Companies - Africa Contactless Payments Market
The Increase in government initiatives to promote digital payments and efficiency and cost effectiveness of contactless payments are the factors driving the Africa contactless payments market growth.
The Africa contactless payments market was estimated to be USD 781.72 million in 2023 and is expected to grow at a CAGR of 8.8%, during the forecast period 2024 - 2031.
The efficiency and cost effectiveness of contactless payments are the major future trends for the Africa contactless payments market.
The key players, holding majority shares, in Africa contactless payments market includes Mastercard, Ingenico, Idemia SA, VISA, and Giesecke+Devrient.
The hardware segment led the Africa contactless payments market with a significant share in 2023.
The Africa contactless payments market is expected to reach US$ 1,536.57 million by 2031.