Booming Market of Contactless Payment Detailed Analysis over the globe-Forecast to 2020-2026

Growing customer preference for digital payment solutions involving smartphones and contactless POS transactions is estimated to propel Contactless Payment Market growth over the coming years. As a result, several financial service providers are now focusing on delivering card solutions on smartphones. Besides, various countries are now advancing towards becoming cashless economies, which has influenced digital payment providers to  develop enhanced digital payment methods to satisfy their consumers with fast and convenient payment options. According to HSBC Holdings PLC, in the UK, number of contactless card transactions increased by 24% from 2018 to 2019.

Changing lifestyles and rising trend of online shopping have urged retailers across the globe to adopt advanced mobile payment applications, such as PayPal, AliPay, WeChat Pay, Apple Pay and Samsung Pay for accepting payments.

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Considering the elevating demand for digital modes of payment, industry players are keen on developing better solutions for the merchants for payment acceptance. For instance, in 2020, Modular Finance launched Payment Initiation Solution to endow its customers with fast and economic process of accepting payments. This solution will enable merchants to receive payments directly from their customers’ bank accounts.

 

These payments will move directly in Modular accounts and users will receive instant notifications on arrival of funds which would speed up reconciliation process and merchant can initiate customer refunds with just a push button. Apparently, this new product will help the company serve their customers with improved offering and strengthen their market position in the overall industry.

 

According to Global Market Insights, Inc. report, contactless payment market is estimated to surpass USD 100 billion by 2026.

 

Contactless payment market is fragmented into various segments based on type, technology, application and regional landscape.

 

With regards to product type, POS terminals are observing rising deployment across numerous retail outlets on account of increasing consumer inclination towards mobile wallets. In 2020, Blackhawk Network Holdings, Inc., declared that mobile wallet adoption is projected to record over USD 190 billion in transactions in the U.S. by 2021. Retailers are now promoting customer loyalty cards integrated with mobile wallets in order to deliver better consumer shopping experience. For instance, in 2019, The Kroger Co. launched a mobile payment program that offered loyalty rewards such as fuel points and private brand discount to the shoppers.

In terms of technology, RFID-based contactless payment is expected to witness a commendable growth as several merchants are predominantly adopting smart payment solutions for enhancing customer experience and maximizing profits.

 

Cards with integrated RFID technology serve faster, secured and convenient payment processing as compared to chip-and-PIN payments cards. The technology consists of memory chip that stores data and RFID readers. Moreover, this technology is largely used in warehouses, toll collection, logistics transactions and in the retail sector.

 

In terms of application, healthcare segment is witnessing phenomenal demand for contactless payment technology for various applications. Hospitals, clinics, and health insurance companies are extensively using contactless smart cards for faster transactions. These medical smart cards can also save patient’s information. Further, it offers safe access to portable medical records and emergency medical information thereby alleviating healthcare fraud. The technology also provides platform for implementation of other applications required by healthcare organizations while complying with government mandates.

 

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In 2019, Mastercard launched their new product Mastercard Health Solutions aimed at helping their healthcare partners with fraud and abuse detection, protection of patient data, and revenue generation. This product line includes the Mastercard Test and Learn platform that uses predictive analysis for optimizing billing and segmenting patients as per patient behavior and payment burden.

 

Further, Mastercard had declared application of machine learning and artificial intelligence to address fraud, abuse, waste and other suspicious claims activities. Additionally, they are currently making use of behavioral analytics and biometrics that enable detection of cyber threats, authenticate patients, valid mobile access to HAS (Health Savings Account) and secure patient data and payment systems.

 

Considering the regional landscape, North America contactless payment market is projected to register substantial growth over the forecast timeframe. The growth can be attributed to rising adoption of enhanced payment techniques across several sectors including transportation, retail and healthcare.

 

Based on Mastercard Survey in 2020, over 56% of consumers use contactless cards, facilitating convenient payment solutions at retail outlets. In 2019, overall usage of contactless payments in the region had increased by 150%. Further, the high internet penetration rate in the region will drive the market growth.

 

Prominent industry players in the contactless payment market such as Visa, Inc., PayCore, Alcineo, IDEMIA, Giesecke & Devrient GmbH, PAX Global Technology, Heartland Payment Systems, Inc., Identiv, Ingenico Group SA, On Track Innovations Ltd., Thales Group, Valitor, Verifone and Wirecard AG are focused on developing enhanced technology solutions in order to get a strong foothold in the market and gain a competitive edge.

Browse key industry insights spread across 300 pages with 425 market data tables and 30 figures & charts from the report, Contactless Payment Market in detail along with the table of contents:

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Report Content

Chapter 3.    Contactless Payment Industry Insights

3.1.    Industry segmentation

3.2.    Industry landscape, 2015 – 2026

3.3.    Impact analysis of coronavirus (COVID-19) pandemic

3.3.1.    Global outlook

3.3.2.    Impact by region

3.3.2.1.    North America

3.3.2.2.    Europe

3.3.2.3.    Asia Pacific

3.3.2.4.    South America

3.3.2.5.    MEA

3.3.3.    Industry value chain

3.3.3.1.    Research and development

3.3.3.2.    Manufacturing

3.3.3.3.    Marketing

3.3.3.4.    Supply

3.3.4.    Competitive landscape

3.3.4.1.    Strategy

3.3.4.2.    Distribution network

3.3.4.3.    Business growth

3.4.    Industry ecosystem analysis

3.4.1.    Distribution channel analysis

3.4.2.    Vendor matrix

3.5.    Technology & innovation landscape

3.5.1.    Artificial Intelligence (AI)

3.5.2.    Augmented reality (AR)/Virtual Reality (VR)

3.5.3.    Biometrics

3.5.4.    Blockchain

3.6.    Regulatory landscape

3.6.1.    North America

3.6.2.    Europe

3.6.3.    Asia Pacific

3.6.4.    South America

3.6.5.    MEA

3.7.    Industry impact forces

3.7.1.    Growth drivers

3.7.1.1.    Demand for mobile and wearable payment devices in North America

3.7.1.2.    Growing demand for biometric contactless smart cards in the U.S. and Europe

3.7.1.3.    Increasing penetration of smartphones in Asia Pacific and South America

3.7.1.4.    Proliferation of RFID tagging in Japan

3.7.1.5.    Demonetization effect in India

3.7.1.6.    Rising adoption of technology by merchants for small value transactions

3.7.1.7.    Reduced transaction time and increased convenience

3.7.2.    Industry pitfalls & challenges

3.7.2.1.    Lack of consumer awareness

3.7.2.2.    High cost of deployment

3.7.2.3.    Rules and regulations imposed by banks and payment associations

3.8.    Growth potential analysis

3.9.    Porter's analysis

3.9.1.    Supplier power

3.9.2.    Buyer power

3.9.3.    Threat of new entrants

3.9.4.    Threat of substitutes

3.9.5.    Internal rivalry

3.10.    PESTEL analysis

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