The contactless payments market size is projected to reach US$ 91.80 billion by 2031 from US$ 33.27 billion in 2023. The market is expected to register a CAGR of 13.5% during 2023–2031. Voice-based payment with voice match confirmation is likely to remain a key trend in the market.
Various governments across the globe are promoting the use of digital payments. Governments of various countries in Asia Pacific have been actively promoting digital payments and financial technology. They have implemented policies and initiatives to encourage the adoption of contactless payments. The IoT contains a vast network of interconnected devices, each embedded with sensors and software, capable of collecting and exchanging data over the Internet. Wearable devices, such as smartwatches, contactless payment cards, and mobile apps embedded with IoT technology, allow users to make payments with a simple tap or by holding their device near a point-of-sale (PoS) terminal. The elimination of physical cards or cash streamlines the transaction process and minimizes the risk of loss or theft. Security concerns have long been a central focus in financial transactions.
Contactless payment is a secure and convenient way of paying for goods and services with a smartphone, debit card, or credit card that uses radio frequency identification (RFID) technology and near-field communication (NFC). Contactless payment works by tapping or waving the payment device over a point-of-sale terminal that has contactless payment technology. Contactless payment has several benefits, such as reduced transaction time and friction, as customers do not have to enter their PIN or handle cash at the checkout. It improves customer experience and trust, as contactless payment is safe and encrypted to prevent any 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 provides loyalty benefits, as some contactless payment systems are integrated with loyalty programs that offer discounts and rewards to customers.
Contactless payment technologies enable transactions through contactless chips embedded in payment cards, tags, wearables, and mobile phones. The contactless payment offers quick approvals from banks, and the money is transferred to the account instantly. This reduces the waiting time and hassle for both consumers and merchants and improves the efficiency and convenience of payments. The contactless payment allows the automation of monthly payments to save time and effort and get cashback. Also, the contactless payment option has low processing fees.
NFC is used for contactless payments. The process of holding a chipped card or smartphone directly against the reader provides an extra layer of security, making contactless payments safe and secure. NFC is the technology 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, which facilitate machine-to-machine communication and IoT integration.
Key segments that contributed to the derivation of the contactless payments market analysis are payment mode, component, and industry vertical.
The geographic scope of the contactless payments market report is mainly divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa, and South & Central America.
Contactless payments are already increasing in popularity in the US. The COVID-19 pandemic has significantly boosted the use of various touch-free payment methods among Americans. In November 2023, as reported by the Mastercard Contactless Consumer Polling, more than half (51%) of Americans were utilizing some form of contactless payment, such as tap-to-go credit cards and mobile wallets, such as Apple Pay. The rising popularity of contactless payments can be attributed, at least in part, to the growing apprehension about the hygiene of signing at the point of sale (PoS) or using cash. According to the survey, 50% of US consumers have concerns about the cleanliness of signature touchpads, and 72% of US consumers opt to forgo signatures entirely.
The European Central Bank (ECB) oversees the euro area payments market to ensure the smooth operation of payment systems and the availability of diverse payment methods. By examining payment statistics, the ECB tracks current trends, such as the increasing usage of contactless card payments. This data has been gathered since the first half of 2022 and has recently been made public. In the second half of 2022, 53.8% of all card-based payments in the euro area were contactless. Furthermore, in 13 out of the 19 euro area countries at that time, over half of all card payments were contactless, indicating a strong demand for this technology throughout the euro area. These stats highlight the emergence of contactless payments in Europe.
The regional trends and factors influencing the Contactless Payments Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses 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$ 33.27 Billion |
| Market Size by 2031 | US$ 91.80 Billion |
| Global CAGR (2023 - 2031) | 13.5% |
| Historical Data | 2021-2022 |
| Forecast period | 2024-2031 |
| Segments Covered |
By Payment Mode
|
| Regions and Countries Covered | North America
|
| Market leaders and key company profiles |
The 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 Contactless Payments Market are:
Disclaimer: The companies listed above are not ranked in any particular order.
The 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 contactless payments market are listed below:
(Source: Ingenico, Press Release, January 2024)
(Source: Mastercard, Press Release, February 2024)
The "Contactless Payments Market Size and Forecast (2021–2031)" report provides a detailed analysis of the market covering below areas:
The List of Companies - Contactless Payments Market
Visa, Mastercard, Giesecke+Devrient GmbH, Ingenico, and IDEMIA are major players in the market.
The market is expected to reach a value of US$ 91.80 billion by 2031.
Voice-based payments with voice match confirmation is a key trend in the market.
The market is anticipated to expand at a CAGR of 13.5% during 2023-2031.
Asia Pacific dominated the contactless payments market in 2023.
Increase in government initiatives to promote digital payments and efficiency & cost-effectiveness of contactless payments are driving the market growth.