The growing popularity of mobile and contactless payment methods among merchants and businesses is fueling the expansion of the contactless payment market. This trend is driven by the increasing number of retailers, restaurants, service providers, and other businesses that are opting for mobile and contactless payment options to draw and retain customers, boost sales, and reduce expenses. These businesses are also making significant investments in advanced payment systems, terminals, and software to seamlessly integrate mobile and contactless payment capabilities into their operations, marketing strategies, and customer service.
Furthermore, the rise of contactless payments, facilitated by smartphones utilizing near-field-communication (NFC) technology, has led to a surge in consumer adoption of mobile payment systems. Consumers can now swipe their smartphones over a card reader to make purchases, eliminating the need for credit or debit cards and physical cash. As a result, merchants and retailers are increasingly incorporating contactless payment technology into their businesses, while consumers are relying on it for their day-to-day transactions. Consequently, the widespread adoption and implementation of contactless payment technology among merchants play a vital role in driving the growth of the market.
Contactless Payments Market: Industry Overview
The contactless payments market is segmented on the basis of payment mode, component, industry vertical, and geography. Based on payment mode, the contactless payments market is segmented into smartphones, smart cards, PoS terminals, and others. Based on component, the contactless payments market is segmented into hardware, solutions, and services. In terms of industry vertical, the contactless payments market is categorized into retail, hospitality, healthcare, transportation & logistics, media & entertainment, and others. The contactless payments market, based on geography, is categorized into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
The contactless payments market is witnessing significant growth due to the rising adoption of contactless payment methods among merchants. This adoption is driven by the desire to provide useful and secure payment choices for customers, streamline operations, and enhance overall transaction experiences. With advancements in technology and increased acceptance by merchants, contactless payments are reshaping the way transactions are conducted. Owing to all these factors, the market is expected to continue growing across the globe.
The adoption of contactless payment methods among merchants and businesses in Europe is driven by various factors, including the desire for convenient and secure payment options, the need to streamline operations, and the increasing demand from consumers. One of the key drivers of the contactless payments market in Europe is the revised Payment Services Directive (PSD2). This directive aims to contribute to a more integrated and efficient contactless payments market in Europe, fostering competition and innovation. The implementation of PSD2 has paved the way for the widespread adoption of contactless payment technologies by merchants across the region. The European Central Bank (ECB) has also conducted studies to analyze the use of cash, cards, and other payment instruments at points of sale (POS) in Europe. These studies highlight the growing popularity of contactless payments among consumers, further driving the adoption of contactless payment technologies by merchants.
Furthermore, partnerships and collaborations between payment providers and technology companies have played a substantial role in promoting contactless payments in Europe. For example, Mastercard partnered with Weve, a joint venture between EE, Telefónica UK, and Vodafone UK, to develop contactless mobile payment systems in Europe. Additionally, the introduction of Apple Pay in 2014 integrated contactless payment capabilities into smartphones, further boosting the adoption of contactless payment methods in Europe. The COVID-19 crisis has also accelerated the adoption of contactless payments in the region. As consumers and merchants prioritize safety and hygiene, contactless payments offer a touchless and secure alternative to traditional payment methods. This has led to a surge in contactless payment transactions and an increased acceptance of contactless payment technologies by merchants across various industries. As the market continues to change, contactless payments are estimated to become the preferred payment method for both merchants and consumers in the region.
Contactless Payments Market: Competitive Landscape and Key Developments
Thales, Infineon Technologies AG, Ingenico, Giesecke+Devrient GmbH, IDEMIA, CPI Card Group Inc., PAX Technology, mypinpad, SumUp Payments Pty Limited, PayCore Inc., Visa Inc., and Mastercard are among the leading market players profiled in the contactless payments market report. Several other essential market players were analyzed for a holistic view of the market and its ecosystem. The report provides detailed market insights, which help the key players strategize their market growth. A few developments are mentioned below:
- In November 2023, contactless payments became more popular worldwide, owing to features such as convenience and speed of tap and pay technologies. These technologies also enable new and creative ways of designing payment cards that can perform additional functions besides payment. One such innovation is the SECORA™ Pay security solution from Infineon Technologies AG, which supports card inlays with LED lights. This product family, which has been certified by Visa and Mastercard, allows banks to offer unique and attractive payment cards to their customers. The LED lights on the cards provide a visual confirmation when the cards are used for payment transactions at the PoS terminals.
- In June 2022, Visa Inc., the world’s leading digital payments company, published a whitepaper on the increasing adoption of contactless payments in India. The whitepaper, titled “India Taps into a Contactless Future,” was prepared in collaboration with Worldline, a payment services provider. It examines the country’s progress with digital payments infrastructure and contactless payments and emphasizes the fast and widespread adoption across different regions and sectors.