Contactless Payment Market, by Device Type (NFC Chips, Mobile Handsets, Smart Cards, Point of Sale Terminals, Others), by Industry Verticals (Government, Transportation, Retail, IT & Telecom, Hospitality, BFSI, Others),Regional Analysis (North America, Europe, Asia Pacific, LAMEA): Global Opportunity Analysis and Industry Forecast, 2019–2026

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Global Contactless Payment Industry Insights, 2026:

The global contactless payment market forecasts a revenue generation of $20,340.3 million by 2026, increasing from $8,700.0 million in 2018 at a significant CAGR of 11.2%.Europe contactless payment market is projected to rise at a noteworthy CAGR of 11.7% by registering a revenue of $6,305.5 million, throughout the analysis period. Strategic tie-ups coupled with the strong presence of smartphone manufacturers in this region are expected to accelerate the Europe market growth.

A contactless payment, also known as a tap-and-go system, is a secure method for a buyer to purchase products or services by using RFID (radio-frequency identification) technology or NFC (near-field communication). Contactless payment is an easy and convenient alternative of cash payment in which the customer can make payments using chip cards such as debit, credit, or smartcard. Contactless payments do not need a PIN (personal identification number) or signature. However, the allowable amount for a contactless payment varies by bank and by the country. 

Contactless Payment Market Synopsis

The enormously rising digitalization and the growing reference of consumers for innovative payment procedures are the key factors anticipated to drive the contactless payment market growth.

However, the high risk of contactless cards getting lost, stolen, or misused may restrain the growth of the global industry in the estimated timeframe.

According to the regional analysis, the Europe contactless payment market is anticipated to grow at a healthy CAGR of 11.7%, by generating a revenue of $6,305.5 million during the forecast period.

Drivers: The acceptance and demand for contactless payments worldwide is anticipated to drive the global contactless payment market

Contactless transactions are the most popular method of paying across the world. This is because they offer more convenient and faster processing, especially for an urban lifestyle. This may lead to accelerate the growth of the contactless payment market, over the forecast period. Moreover, the tremendously increasing digitalization and consumer preference for innovative payment procedures, like smartphone payment, are one of the significant factors for the boost of the contactless payment market. Furthermore, this technology also provides key benefits such as cryptography security features, biometric authentication, virtual card provisioning, and remote deactivation. These key factors are anticipated to drive the demand for contactless payment market, across the globe, during the forecast period.  

Market Restraint: Higher cost of deployment of contactless payment technology is expected to obstruct the global contactless payments industry growth 

The risk of lost or stolen contactless cards can be higher. Also, the high cost associated with the deployment of contactless payment technology is the major restraining factor for the contactless payment market.
Investment Opportunities: Dramatic innovations in digital economy platform are anticipated to create vast opportunities in the Global Contactless Digital Payment Market

The extensive evolution of digital economy is one of the major factors that is anticipated to generate a noticeable revenue in the global market. The demand for digital platforms of the economy is mainly driven by its ability to collect, use and analyze huge amounts of machine-readable information. The meteoric rise of internet shopping is one of the key factors for the growing demand for the digital economy platform. The digital economy has shown a major influence on the world’s trajectory coupled with the societal well-being of ordinary citizens. Moreover, the extensive rise of smart watches, smartphone ubiquity, contactless debit/credit cards, Apple, Google, and Samsung Pay enabled on almost every device has made cashless payment easier. This advancement in digital economy services may create huge opportunities for the growth of the contactless payment market, during the forecast period.

The global mobile handsets segment shall have the largest market share in the global market and it is expected to surpass $5,288.5 million by 2026, increasing from $2,175.0 million in 2018. Smartphone contactless payments play a key role in the financial institutions along with providing an additional way for transactions which help to maintain the current ecosystem. Moreover, it also helps to protect customer data, especially in the retail sector. Furthermore, the higher speed of contactless transactions, extensively increasing disposable incomes and personalized experiences, availability of loyalty schemes for potential consumers are some of the driving factors for the growth of this segment.

The BFSI (banking, financial services, and insurance) segment will have the largest market share and it is projected to surpass $3,376.5 million, over the forecast period. A surge in contactless cards and innovative and secure technology platforms are anticipated to drive the growth of this market in the BFSI segment. Also, increasing adoption of break through technologies such as HCE (host card emulation), which enables banks to generate their mobile wallet, allow their clients to store multiple cards on their mobile phones to perform secure contactless transactions. Moreover, this platform offers efficient and instant insurance services to facilitate the convenient delivery of debit cards to their client.

The retail segment for the contactless payment market shall have significant market share in the global market and it is expected to generate a revenue of $4,088.4 million during the forecast period. Extensive growth in urbanization and income of people, favorable government policies, and technological advancement in this platform are also anticipated to drive the growth of this segment. Moreover, e-commerce giants such as Amazon.com Inc. are also focusing on this platform. For instance, this company is planning to pilot contactless payments to foster the adoption of its Amazon Pay payment processing service. These key factors may lead to boost the growth of this segment.

Europe’s contactless payment market generated a revenue of $2,610.0 million in 2018 and it is projected to grow at a healthy rate of 11.7%, generating a revenue of $6,305.5 million, during the forecast period. This is mainly because of the rising support for contactless payments, mobile payments, and digital wallets mainly in European countries such as France, UK, and Italy. For instance, as per UK Finance data, there were around 13.2 billion debit card payments done in the year 2017. Moreover, the rising adoption of smartphones along with the evolutionary surge in mobile payments is one of the driving factors for the growth of the contactless payment market. For example, as per the publication of GSMA, in the European region, smartphone adoption was around 76% at the year-end of 2019.

North America Contactless Payment Market Overview, 2026:

North America contactless payment market had the highest market share and it has registered a revenue of $3,045.5 million in 2018 and it is projected to register a revenue of $6,712.3 million, over the forecast period. This is mainly because of increasing strategic collaborations such as tie-ups and partnerships in this region. Moreover, technologically advanced mobile payments, rising acceptance for NFC and QR/ barcode, and growing demand of smartphones are some of the driving elements for the growth of this regional market.

Leading contactless payment market players are Ingenico Group., VERIMATRIX, VeriFone, Inc., Paycor, Inc, On Track Innovations LTD., Castles Technology, SumUp Inc., Alcineo, C.Bitel., and Infineon Technologies AG. Contactless payment global leaders are emphasizing highly on strategic alliances and tie-ups, advanced product developments. These are the frequent strategies followed by established organizations.

Porter’s Five Forces Analysis for Contactless Payment Market:

• Bargaining Power of Suppliers: Suppliers of this market are focusing mainly on novel technologies such as Blockchain; it offers significance over traditional banking transactions and customer convenience. This may provide HIGH bargaining power to the suppliers.

• Bargaining Power of Buyer: Buyers have high negotiation power, mainly due to the major variety of contactless payments platforms, in the global market. Moreover, clients have more bargaining power due to low switching costs via digital channels, instant access to information, access to substitute products and services with greater ease of use and convenience, insights from social media, price sensitivity, and risen industry competitiveness. Thus, the suppliers' bargaining power is VERY STRONG.

• Threat of New Entrants: In recent days, the emerging startups are highly equipped with value propositions and the newest digital-based business models. Moreover, low switching costs and increasing research on unique software product by emerging companies gives significance to the new entrants. Thus, the threat of new entrants is HIGH.

• Threat of Substitutes: There is no substitute for the contactless payment platform so far. Moreover, the contactless payment system is more significant over the traditional alternatives system. Thus, the threat of substitutes is VERY LOW.

• Competitive Rivalry in the Market: A high number of platforms, across the globe and global leaders are emphasizing effectively on low-cost digital business models, customer convenience, and comparable administrations. Competitive Rivalry in the Market is HIGH.