In today’s fast moving life, where time is as important as money, contactless payment technology has become an essential part for both consumers and retailers. The mass adoption of contactless technology is mainly to bring convenience for both consumers and retailers. Contactless debit and credit cards are being issued by various banks so as to allow the consumers to make payments at various Point of Sales (PoS) by using the Near Field Communications (NFC) technology.
Contactless payment market is expected to grow from USD 6.70 Billion in 2016 to USD 17.56 Billion by 2021, at a Compound Annual Growth Rate (CAGR) of 21.2%
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Contactless Payments are used at a massive scale in various regions such as Asia, Europe, and North America, by providing numerous advantages to issuers, retailers, and consumers. The issuers can easily penetrate the cash payment market through contactless payments, and receive the benefits of cash payment market, enjoy increased customer transaction volume, and improve customer retention and loyalty. However, consumers get the facility of hands free payment and the capability to pay for number of services by using one device. The Contactless Payment providers are strengthening their market position through mergers and acquisitions, and are investing heavily in new technologies to address the increasing demand for Contactless Payment solutions.
In the retail sector the latest trend is said to be contactless payment solutions. The merchants embrace contactless payment technology, as they strongly believe that speed and convenience are very essential requirements for them to increase the transaction volumes. For the technology to be successful various types of RF technologies are currently being used including 13.56 MHz contactless smart cards, low-frequency (100 to 500 KHz) devices and high-frequency (900+ MHz) transponders. Choosing among these technologies depends on various factors such as the types of payment mechanisms the technology supports and the standards supporting technology. Contactless Payments is being readily adopted, mainly to address the needs of flexible and holistic retail and transit environment and to create a more engaging and personalized culture, hence supporting organizations to effectively manage capabilities and deal with skill imbalance challenge.
The concept of contactless payments follows various transaction models, and each of them requires a different architecture. Contactless smart cards are being across the globe with Visa, MasterCard. standard based technology, enhanced security features, products and services available, capability to use existing payment infrastructure, and support offered from financial institutions are major factors that provide compelling benefits for contactless payments. The main focus of such initiatives is to evolve a strategy and bring various components comprising of contactless payments mechanism to ensure proliferation of contactless in payment sector across the globe.
Mobile handsets payment mode is expected to be the most promising segments during the forecast period
Contactless smart cards command the major share in the contactless payment modes. However, mobile handsets are fast picking up as the most preferred mode of payment in the developing countries of the world as these are more secure and convenient for the customers to make their payments.
Presently, Europe contributes the maximum market share in the contactless payment market
Europe is expected to hold the largest market share and dominate the contactless payment market in 2016 due to technological advancement and increasing contactless smart card roll-outs in this region. From 2016 to 2021, APAC is estimated to grow at the highest rate during this forecast period and is becoming a new hotspot for contactless payment vendors as a revenue generating region. Furthermore, North America is expected to be another revenue generating market, with solution market as the leading revenue generating segment. This growth is driven by increasing adoption of cloud-based contactless technology solutions in the region.
The major vendors covered in the contactless payment market for the study include Gemalto N.V., Giesecke & Devrient GmbH, Ingenico Group, VeriFone Systems Inc., Wirecard AG, Heartland Payment Systems Inc., INSIDE Secure, OTI, Oberthur Technologies SA, and Proxama PLC.
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