Contactless payments refer to a payment method where a contactless card, smartphone, or any other device is swiped over a payment terminal without inserting or dipping the device. These payments are increasingly becoming popular due to the ease and seamless payments experience they offer. From making small payments for grocery items, tube tickets, and more, contactless payments can be completed within seconds without the need to enter a PIN or signatures. This has significantly improved the checkout experience for consumers and merchants alike.
In addition, the proliferation of smartphones equipped with near-field communication (NFC) has paved the way for mobile wallets and contactless payments via digital modes. Leading technology companies are actively collaborating with banks and payment networks to offer contactless functionality via digital wallets and mobile payment apps. Several retail outlets and transportation services now accept payments through mobile wallets like Google Pay, Samsung Pay, and Apple Pay.
The global contactless payments market is estimated to be valued at US$ 15782.66 Mn in 2023 and is expected to exhibit a CAGR of 4.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends driving the contactless payments market is the growing adoption of mobile-based payments. Tech-savvy consumers across demographics are increasingly preferring to make payments through their phones, owing to the convenience offered. With the proliferation of next-generation mobile payment solutions like biometric authentication and QR code-based payments, mobile is expected to further penetrate payment volumes globally. This is prompting card networks and payment providers to invest in developing mobile-first contactless acceptance infrastructure and merchant solutions. Growing smartphone and contactless POS penetration will continue fueling the mobile payments trend over the coming years.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as the contactless payments market is highly competitive. However, the need for specialized infrastructure and payment technology is a barrier for new players.
Bargaining power of buyers: The bargaining power of buyers is high as there are many established contactless payments providers in the market offering similar services. Buyers can switch between providers based on pricing and services.
Bargaining power of suppliers: The bargaining power of suppliers is moderate as providers rely on third-party companies for contactless payment systems, which provide differentiated hardware and software. However, suppliers hold certain bargaining power over providers.
Threat of new substitutes: The threat of substitutes is high as digital payment methods like mobile wallets, QR codes, and bank applications provide alternatives to contactless payments. Technology advances constantly introduce new substitutes.
Competitive rivalry: The competitive rivalry in the contactless payments industry is high due to the presence of major players competing on the basis of technology, services, and pricing.
Key Takeaways
The Global Contactless Payments Market Size is expected to witness high growth at a CAGR of 4.0% during the forecast period. The global contactless payments market is estimated to be valued at US$ 15782.66 Mn in 2023 and is expected to exhibit a CAGR of 4.0% over the forecast period 2023 to 2030.
Regional analysis: North America dominates the contactless payments market currently due to high consumer acceptance of digital payment methods and presence of major providers in the region. Asia Pacific is expected to grow at the fastest pace due to rising digitalization and e-commerce adoption in developing countries like India and China.
Key players: Key players operating in the contactless payments market are F. Hoffmann-La Roche AG, Boehringer Ingelheim, Bayer AG, Pfizer Inc., Biogen, Daiichi Sankyo, Bristol-Myers Squibb, Johnson & Johnson, AstraZeneca, SanBio and Athersys Inc. Companies are focused on developing advanced payment solutions and partnerships to expand their market reach.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it