Contactless Payment Market Expected to Reach $12,476.6 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Contactless Payment Market, By Device Type (Smartphones and Wearables, Smart Cards, and PoS Terminals), and By Application (Food and Groceries, Pharmacy and Drug Stores, Restaurants and Bars, Consumer Electronics, Media and Entertainment, and Others): Global Opportunity Analysis and Industry Forecast, 2022-2032". The contactless payment market was valued at $2.4 trillion in 2022, and is estimated to reach $12,476.6 billion by 2032, growing at a CAGR of 18.3% from 2023 to 2032.

Contactless payment is a way to make purchases without physically passing a card to another person or swiping it through a machine. It uses radio frequency identification (RFID) technology and near-field communication (NFC) to process transactions where possible. Contactless payment is done by tapping a contactless card or a payment-enabled mobile or wearable device over a contactless-enabled payment terminal.

Furthermore, to prevent fraud and bring agility to the payment industry, key players have adopted various strategies such as partnership, acquisition, and collaboration that enable fast and more efficient management of payments services. For instance, in October 2022, French payments services firm, Worldline acquired a 55% stake in SoftPos, a Polish FinTech. The Warsaw-based SoftPos offers technology that converts regular Android devices into secure payment terminals, helping merchants accept card payments with no need for added hardware.

The demand for mobile & wearable payments has experienced a continuous rise in the market due to massive changes in consumer behavior & preferences toward payment options. Therefore, this increased usage of mobile & wearable devices promotes the usage of contactless payment methods and hence promotes the contactless payment market growth.

Furthermore, rise in the adoption of contactless payment among merchants and businesses boosts the growth of the contactless payment market. In addition, the demand for fast & hassle-free transaction services drives the massive adoption of contactless payment channels among merchants, which boosts market growth.

However, data privacy risk and security concerns while executing payments are some of the factors that hamper the growth of the contactless payment industry. On the contrary, advancement in technology through the integration of Internet of Things (IoT) with contactless payment has led to the development of innovative devices for customers, which is expected to remain a major contactless payment market trends in the market. Moreover, developing economies offer significant opportunities for contactless solution providers to expand their offerings, as consumers are increasingly adopting contactless payment methods and merchants are implementing advanced technologies in their existing business processes.

On the basis of application, the food and groceries segment dominated the contactless payment market share in 2022. Contactless payment systems are being used by several merchants in emerging markets such as India, Mexico, and Brazil due to several benefits such as enhanced operational efficiencies, improved customer satisfaction, and lower operating costs. The increase in online payment penetration among end-users in various food and grocery stores contributes to market expansion. However, the restaurants and bars segment is expected to grow at the fastest CAGR during the forecast period, owing to a rise in the adoption of contactless payment technology such as NFC and RFID across the restaurants and bars industry, which drives the growth of the market.

By region, the contactless payment market was dominated by Europe in 2022. This is attributed to the fact that contactless payment technology is used by various firms in European countries including the UK, Germany, and France to enable business transactions between counterparties and drive operational efficiency, which drives the market growth. In addition, the launch of easy-to-use and new contactless applications, such as Samsung Pay, Apple Pay, and Google Wallet, has accelerated the usage of contactless payment by customers primarily in the retail and hospitality industries. These major factors influence the growth of the contactless payment market in Europe.

However, Asia-Pacific is expected to grow at the fastest CAGR during the forecast period as several consumers have adopted contactless payment for day-to-day transactions and due to the increased government support toward investment in technologies.

The COVID-19 pandemic positively impacted the contactless payment market size. The pandemic across the globe prompted widespread changes in consumer behavior and preferences, accelerating the adoption of contactless payments. The fear of virus transmission through physical contact prompted a shift away from traditional payment methods such as cash and chip-and-pin cards. Furthermore, many governments and health organizations encouraged the use of contactless payments to reduce the spread of the virus. This resulted in increased awareness and promotion of contactless transactions, driving its adoption.     

Key Findings of the Study

• On the basis of device type, the smartphones and wearables segment accounted for the highest contactless payment market share, in terms of revenue in 2022.
• On the basis of application, the food and groceries segment attained the highest market share in 2022.
• On the basis of region, Europe generated the highest revenue in 2022.  

The key players operating in the contactless payment market analysis include Visa Inc., American Express Company, PayPal, Inc., Apple Inc., Mastercard, Amazon.com, Inc., Square, Inc., Ingenico, VeriFone, Inc., and Thales. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.