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.
MarketsandMarkets forecasts the contactless payments market to grow from $4.32 billion in 2013 to $9.88 billion in 2018, at a CAGR of 18% during the forecast period.
Contactless payments are now being accepted worldwide with intention to make transactions faster, reduce security risks associated with cash handling, reduce security risks for consumers, and save on operations costs. With the introduction of technologies such as mobile wallet, it is now possible to make contactless payments by using Smartphones other than using Smartcards.
Presently, contactless payment is one of the fastest modes of money transactions now. However, this technology is still not fully accepted by consumers and businesses, with security being a major concern for both the parties. For instance, North America is yet to completely adopt contactless payment. But with the emergence of Smartphones being in-built with NFC, and continuous improvements by the Financial Institutions (FIs), which aid in reducing the security issues related with contactless technology, contactless payments are expected to be widely accepted across the globe in the years to come.
Reduction in queuing time, increased convenience making low-value payments, integration with existing cards, improved service delivery, and increased revenue opportunity are some of the factors which are expected to drive the contactless payment market in the upcoming years. With the growing interest for capacity Subscriber Identification Module (SIM), contactless interface fueled adoption and multi-application support by NFC are some of the opportunities in this market.
Apart from large merchandise stores, contactless payments could also make the processes easier at small merchandise as well as at payment terminals of local buses and trains. High cost involved in the deployment of ePOS terminals is one of the restraints for contactless payment market, especially for small merchandises. The vendors can grab this opportunity by providing cost-effective and innovative generation of products.
The payment method for consumers has evolved to various forms in the past and contactless payment is one of the latest methods. On a global perspective, contactless payment is still a slow evolving technology with a potential to benefit both consumers and retailers. Contactless payments and NFC technology can be well implemented at merchandise stores, petrol stations, buses, and trains payment terminals and other places. The future of contactless technology depends on consumer awareness and the security issues related to this technology.
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