Market Overview:

The Global Contactless Payment Market Size Was Valued At $1,168 Billion In 2022, And Is Projected To Reach $5,226 Billion By 2030, Growing At A CAGR Of 20.6% From 2023 To 2030.

A contactless payment is a way for customers to pay safely with debit cards, credit cards, or payment devices that use radio frequency identification (RFID) or near-field communication (NFC). A contactless payment solution is a way to pay that doesn't require you to touch cash, a menu, a bill, or anything else. Contactless payment is thought to be a quick and easy way to pay, and customers don't have to enter a PIN. Companies are always using the newest technologies to make it easier and safer to use contactless payment methods.

Contactless payment is a safe way for people to buy goods or services. They can use smart cards, wearables, key fobs, smartphones, and other devices. Radio-frequency identification (RFID) and near field communication (NFC) are the main technologies used in the contactless payment industry to make contactless transactions possible. Also, consumers can wave or tap their smart cards, key fobs, or handheld devices over a reader at a point of sale (POS) terminal because they have a chip and antenna built in.

COVID-19 Impact:

During the time frame predicted, the market grew quickly because of the COVID-19 pandemic. This is because more and more industries, like BFSI, retail, transportation, and others, want to use contactless payments. Retailers were using contactless payments to keep their stores and employees safe, and now they are making them follow social distance.

Also, COVID-19 has made contactless payments more popular because they don't require as much physical interaction and can help stop the spread of COVID-19. Because of this, many businesses grew by giving their customers ways to pay without touching a card reader. Paytm launched a contactless QR code payment method in January 2020. Users could make direct payments by scanning QR code from their phone, which meant they didn't have to touch the payment device.

Market Dynamics:

Market Trends:

Contactless payment systems are being used more and more in retail stores because e-banking is becoming more popular and people want to do transactions quickly and easily with smart cards and cell phones. The growth of the global contactless payment market has also been helped by the fact that debit and credit cards are easy to get from banks. High-end stores are choosing transactions that are easy, quick, and reliable so that customers can pay without cash. This is another thing that helps the contactless payment market grow around the world.

Driving Factors:

• The Acceptance and Demand for Contactless Payments Worldwide 

Payments without touching a card reader are the most common way to pay around the world. This is because they are easier to use and faster, especially for people who live in cities. This could speed up the growth of the market for contactless payments over the next few years. The contactless payment market is also growing because of how much digitalization is happening and how much people like using new ways to pay, like paying with their smartphones. This technology also has a number of important advantages, such as security features based on cryptography, biometric authentication, virtual card provisioning, and remote deactivation. During the forecast period, these key factors are expected to drive the demand for contactless payment markets around the world.

• Surge in Demand for Mobile and Wearable Payment Devices

The market is seeing a steady rise in the demand for mobile and wearable payment devices. This is because consumer behavior and payment preferences are changing a lot. So, the growing use of mobile and wearable devices makes it more likely that people will use contactless payment methods. Also, more and more customers are linking their bank accounts to mobile wallets and other devices, which is driving up the market demand for contactless payments. The market is also growing because more people are becoming aware of advanced payment devices and more people are starting to use them.

• Rise in Adoption of Technology by Merchants for Small Value Transactions

As Near-Field-Communication (NFC) technology makes contactless payments possible on smartphones, more and more people are using mobile payment systems. Also, customers can buy things without using credit or debit cards or counting out cash by swiping their phones over a card reader. So, merchants and retailers are starting to use contactless payment technology in their stores, and customers are using it for day-to-day purchases. So, merchants' use of contactless payments technology is one of the most important things that drive market growth.

·        Enhance Purchase Experience

One of the main things people don't like about EMV chip technology is that transactions take longer. Contactless payments get rid of friction and make it easier for customers to buy things. The only way for a shorter transaction time to have a positive effect is if most of the transactions happen during peak hours. A shorter line just means that a lot of people have already been helped. Contactless payment technologies like NFC, HCE, and RFID allow for faster transactions with touch-and-go payments. This speed up the flow of customers during busy times in the retail, BFSI, hospitality, and transportation sectors and helps cut down on lines. The increase in sales will be a direct result of the increase in throughput.

Restraining Factors:

• High Cost of Deploying Contactless Payment Technologies

Compared to other kinds of readers, NFC readers tend to be more expensive. If a business is ready to spend money on new readers or POS terminals with contactless technology, it will have to spend a lot of money to adopt, buy, and maintain the new machines and other equipment. Large, well-known companies have been able to use this technology successfully, but smaller companies may find it hard to keep making the same amount of money and even make more while using this technology. The costs for the company could go up and up if they had to hire technicians to install and maintain the hardware and software.

·        Security Issues Associated with Technology

People aren't sure they can trust contactless payments because they are worried about theft and security. Also, the lack of a PIN during the transaction makes cardholders even more worried about security, which makes the public less likely to trust contactless payments. Also, the risk of spyware, malware, and virus attacks on many systems makes it harder for people all over the world to use contactless payments. These things are likely to slow the growth of the market.

• Increased Rules and Regulations Imposed by Banks 

Some of the things that slow down the growth of the contactless payment market are the rules and regulations that banks are putting on payments. Also, contactless payment solution providers have a lot of chances to grow and improve their services in developing economies, especially in emerging economies like Australia, China, India, Singapore, and South Korea. Adding Internet of Things (IoT) to an existing contactless payment terminal is also expected to be a good way to make money during the period of the forecast.

Opportunities:

• Rising Demand for Mobile and Wearable Payment Devices

Smart chips built into NFC-enabled mobile phones make it possible to store payment apps and account information safely on the phone. This information can be used easily as online payment cards. There are many different kinds of embedded smart chips, like Subscriber Identification Module (SIM) cards, secure elements built into the phone, and Secure Digital (SD) memory cards. NFC chips in mobile devices can work as both a card and a reader. This makes it easy for consumer devices to share information safely and make quick, secure payments. The contactless payment market is expected to grow a lot in the next 10 years, especially in the Middle East, Africa, and Asia-Pacific (MEA and APAC). This is because HCE technology is being made available for mobile phones.

• Increasing Use of Digitalized Payment Options

Over the next few years, the market is likely to grow because more people will use digital payment options. Emerging economies are making it easier for people to pay taxes, and companies are giving loyalty discounts with every transaction to get people to use digital money instead of cash. The payment industry is moving toward EMV (Europay, MasterCard, and Visa) chip cards to make offline transactions safer and easier to control. This is expected to be a major factor in the growth of the market for contactless payments. Compared to paying with cash, a contactless payment card is a very safe way to pay. For example, in October 2019, SBI launched SBI Card Pay, a way for credit card users to pay with their phones without touching the card. With this card, you can pay for things with your phone faster, easier, and safer.

• Untapped Potential of Emerging Economies

Contactless solution providers have a lot of room to grow in developing economies because more and more people are using contactless payment methods and more and more merchants are integrating new technologies into their business processes. Also, the growth of the market is expected to be boosted by the benefits of cashless technology, such as less tax evasion and more room for monetary policy in payment systems.

The main things that are expected to drive market growth are high investments in developing and changing existing product lines, improving operations to meet customer needs, and making business operations more productive. Also, India, China, Australia, Singapore, and South Korea are starting to use contactless payment systems the most. In the coming years, the market is likely to grow as more and more people in these economies buy smartphones.

Challenges:

• Lack of Customer Awareness

The lack of standards for contactless cards makes it harder for this technology to be used everywhere. Consumers need a good way to pay other than cash, but they don't know what options are out there. Most people in developing countries don't know about contactless card payment technology. Financial regulators in these countries have to put in a lot of work to let people know that there are different types of cards that can be used and are safe. Contactless payment vendors also have to deal with the fact that different countries don't use the same payment technology.

• Increased Rules and Regulations Imposed by Banks 

Some of the things that slow down the growth of the contactless payment market are the rules and regulations that banks are putting on payments. Also, contactless payment solution providers have a lot of chances to grow and improve their services in developing economies, especially in emerging economies like Australia, China, India, Singapore, and South Korea. Adding Internet of Things (IoT) to an existing contactless payment terminal is also expected to be a good way to make money during the period of the forecast.

Strategic Development:

• In September 2022 - Paycor HCM, Inc., a company that makes software for Human Capital Management, released Paycor wallet. With this wallet, employees could see how much money they had earned and get information about their pay cards.
• In March 2021 - Thales Group, a company that makes secure and innovative digital solutions, brought the Contactless Payment method through wearables to AXIS Bank. This made it possible for customers to make reliable and smooth transactions. This new idea is likely to make the market for contactless payments grow faster.
• In January 2019 - The Chinese bank ICBC signed a deal with Gemalto (Thales Group) to keep offering contactless cards. This is because digital transactions are becoming more popular. ICBC's Thales Group (formerly Gemalto) dual interface card will let users pay at the register by inserting or tapping the card.
• In May 2018 - Wirecard, the leader in digital financial technology, teamed up with Garmin, the leader in GPS technology, to offer the most advanced contactless payments ever. In the coming weeks, all Garmin Pay customers in Europe will be able to pay for things in easy, safe installments through shelter at the point of sale.

Key Vendors:

Top market players are

• Thales

Thales SA makes and sells electronic equipment and systems for the aviation, maritime, and defense industries. It has two main business areas: Defense and Security and Aerospace and Transport. The Defense and Security segment designs and sells systems for use in the air, on land, at sea, and in space.

• Visa Inc.

Visa is the world leader in digital payments, making it easy for people, businesses, banks, and governments in more than 200 countries and territories to do business with each other. The goal is to help everyone everywhere by being the best way to send and receive money.

• Giesecke & Devrient GmbH

Giesecke+Devrient Gesellschaft with limited liability is a tech company. The company creates, makes, and sells products that help with payment, secure communication, and managing identities. Giesecke+Devrient serves clients worldwide.

• MasterCard

Mastercard is a global company that makes technology for the payments business. The goal is to connect and power a digital economy that is open to everyone and helps everyone, everywhere. We do this by making transactions safe, easy, smart, and easy to use. Our innovations and solutions help people, financial institutions, governments, and businesses reach their full potential by using secure data and networks, partnerships, and a lot of passion.

• Apple Inc.

Apple Inc. (Apple) designs, makes, and sells phones, tablets, computers, and devices that you wear. The company also sells software applications and services related to them, as well as accessories and digital content from other companies. Apple makes the iPhone, iPad, Mac, iPod, Apple Watch, and Apple TV, among other things. It has software for both consumers and businesses, like iOS, macOS, iPadOS, and watchOS, as well as iCloud, AppleCare, and Apple Pay.

• PayPal Holdings Inc.

PayPal Holdings Inc., which is known as "PayPal," is a company that uses technology to make digital payments. It offers technology and payment solutions that make it easy for merchants and customers to pay with mobile devices, in apps, and online. The company also offers services that add value, such as working capital and short-term business financing, gateway services, and billing.

• American Express Company

Amex, or American Express, is a company that sells cards and travel-related services. It offers a variety of credit cards, charge cards, and other payment and financing options to individuals, small and medium-sized businesses, and large corporations. The company does things like find and process merchants, settle payments, market at points of sale, and provide network services.

• com, Inc.

Amazon Inc. has services for shopping online. The Company sells things like TVs, computers, shoes, jewelry, books, toys, video games, groceries, clothes, and more. Amazon has customers all over the world.

• com

Alibaba Group Holding Ltd. engages in providing online and mobile marketplaces in retail and wholesale trade. It operates through the following business segments: Core Commerce; Cloud Computing; Digital Media and Entertainment; and Innovation Initiatives and Others.

• PayU

PayU is the payments and fintech business of Prosus, which is a global consumer internet group and one of the biggest investors in technology in the world. PayU's cutting-edge and award-winning technology lets online businesses use it as a payment gateway.

Segmentation Analysis:

The market is segmented on the basis of component, solution, application, device and region.

By Component Outlook:

The contactless payment market has been broken up into three parts: hardware, services, and solutions. Hardware has been broken down even more into POS, cards, and other types. Others have been further divided into wearables, readers, key fobs, and tags. The services have been divided into consulting, integration and deployment, support and maintenance, and help and maintenance. Solutions have been further divided into data management solution, payment terminal solution, contactless mobile payment solution, device management solution, security and fraud management solution, hosted point of sale solution, transaction management solution, and analytics solution.

• Hardware
• Services
• Solution

By Solution:

In 2019, the payment terminal solution got more than 40% of the market share for all contactless payments in terms of the value of transactions. Also, clients worry most about security when it comes to contactless payments because fraud is a common worry. Businesses are trying to address these worries by offering safe payment systems that can only be used by people with passcodes. Modern technological advances have led to the creation of new ways to prove who you are, like using your fingerprint to make contactless payments. Also, the security and fraud management market segment is expected to grow at a compound annual growth rate (CAGR) of over 20% over the next few years.

• Security and Fraud Management
• Payment Terminal Solution
• Transaction Management
• Hosted Point-of-Sales
• Analytics

By Application Outlook:

In 2019, the retail application sector led the global contactless payment market, with more than 60% of the market share. Other application sectors were also looked at in this report. This growth is because the number of "tap-and-go" transactions has gone up all over the world. Tap-and-go speeds up the check-out process, which makes contactless payments a better choice for customers in both developed and developing countries. Contactless payments are also used in service businesses like gas stations, movie theaters, convenience stores, and restaurants. This increases the number of payments in the retail segment.

• Government
• Healthcare
• Retail
• Transportation
• Hospitality

By Device Type:

In terms of the value of transactions, the smartphones and wearables market segment made up about 60% of the entire market in 2019. In daily life, the number of people using smartphones has grown a lot in the last few years. People now prefer to pay for things in stores with their phones, for example. Also, changes in wearables like payment rings and bands are expected to boost market demand during the estimated time period. Smart cards are also expected to get a bigger share of the global market because they are easier to use than Euro Mastercard Visa cards with PINs.

• Point-of-Sales Terminals
• Smartphones & Wearables
• Smart Cards

Regional Insights:

North America was the biggest market for contactless payments in 2021, bringing in more than 30% of the world's income. A lot of money is spent in North America on developing advanced technologies for contactless payments, such as NFCs and RFIDs. Also, a growing preference for digitization, the Internet of Things (IoT), and big data is likely to drive demand for advanced hardware and software solutions from contactless payment solution providers in the region, which is good for the growth of the regional market. At the same time, Canadians are focusing on using digital wallets, which let them load their debit card information onto their mobile wallet and pay in a few simple steps.

During the time frame of the forecast, Asia-Pacific is likely to grow the fastest. A lot of big names in mobile wallets, like Alipay, Paytm, Phone Pe, and Google Pay, show that the market for contactless payments in Asia and the Pacific has a lot of potential. Also, the economy is doing well, and more and more people are using mobile wallets to buy things in stores. This gives the Asia-Pacific market more chances to grow and expand, and it helps the economy do well. At the same time, the efforts of the Japanese government to turn financial services into a digital platform are expected to drive the growth of the contactless payment market during the forecast period.

• North America
• US
• Canada
• Mexico
• Rest of North America
• Europe
• Germany
• France
• Italy
• Spain
• UK
• Nordic Countries
• Denmark
• Finland
• Iceland
• Sweden
• Norway
• Benelux Union
• Belgium
• The Netherlands
• Luxembourg
• Rest of Europe
• Asia-Pacific
• Japan
• China
• India
• Australia
• South Korea
• Southeast Asia
• Indonesia
• Thailand
• Malaysia
• Singapore
• Rest of Southeast Asia
• Rest of Asia-Pacific
• The Middle East & Africa
• Saudi Arabia
• UAE
• Egypt
• South Africa
• Rest of the Middle East & Africa
• Latin America
• Brazil
• Argentina
• Rest of Latin America

Scope of Report:

Conclusion:

• This research report gives a full analysis of the market using both qualitative and quantitative data, as well as predictions about the market.
• This research study also figures out global, regional, and national market revenue and growth trends from 2022 to 2030.
• This report has a breakdown of the market by solution, application, device, and region, as well as an estimate of the market's revenue.