Contactless payment market to grow at 15% CAGR till 2025
The contactless payment market is set to grow at a compounded annual growth rate of 15 per cent from its current value of more than $40 billion to over $100 billion by 2026, gaining remarkable traction over the 2020-2026 period, according to a recent study from market research firm Global Market Insights, which found the COVID-19 pandemic has provided an unexpected impetus to the growth of this industry.
Driven by nationwide lockdowns and the imposition of social distancing measures, contactless payment solutions have been deployed on a very large scale in the last few months, the study found.
With respect to the type of device, this market is divided into point of sale (PoS) terminals and smart cards, Of these, the former segment is anticipated to see a substantial growth on account of the rising implementation of numerous technologically advanced solutions that enable convenient, safe and speedy transactions, it found.
With respect to the application segment, contactless payment industry is divided into retail, warehouse and logistics, hospitality, healthcare, entertainment, transportation, and others. Of these, the retail segment is estimated to witness an appreciable growth rate, driven by the surge in the demand for immediate transfer settlements from e-commerce retailers and merchants.
Another major application area that provides a push to the overall contactless payment industry is the hospitality sector. Increasing demand for advanced contactless PoS systems from restaurants and resorts so as to ensure a rather pleasant customer experience through secure and quick transactions will augment contactless payment market share from the hospitality sector.
Regionally speaking, contactless payment market is segmented into Europe, Asia Pacific (APAC), North America, Middle East and Africa, and Latin America. Of these, APAC is anticipated to emerge as a highly lucrative regional revenue pocket for contactless payment industry, given the rising penetration of smartphones across the emerging nations of the region.
In addition, the region is remnant of numerous initiatives brought forth by governments, pertaining to the increase in digital transactions. Also, the number of e-commerce users in the region has been on a rise lately, increasing the adoption of contactless payments across small and medium enterprises, in regions such as India and China, thereby augmenting the APAC business outlook.
Latin America is another region that is poised for substantial growth. Rising number of government-led initiatives subject to the adoption of contactless payment solutions so as to promote the cashless economy culture will proliferate the regional industry expansion, the study said.
However, issues related to interoperability among various real-time payment network schemes such as the Society for Worldwide Interbank Financial Telecommunications (SWIFT) and The Clearing House (TCH) in tandem with surging cybersecurity concerns, may restrain the market growth to some extent over the forecast period.