Contactless Payments Market Size, Trends and Growth Analysis by 2027

The contactless payments sector is projected to expand significantly, with an anticipated growth from US$ 33.27 billion in 2023 to US$ 91.80 billion by 2031. This growth trajectory indicates a compound annual growth rate (CAGR) of 13.5% from 2023 to 2031.

A report released by Mastercard in 2021 revealed that more than 85% of consumers in the Middle East and Africa (MEA) have tried out various new payment methods, including mobile wallets and devices that facilitate transactions. In the rapidly changing retail environment, digital payments have evolved from being a luxury to an essential service. Even prior to the COVID-19 pandemic, tech-savvy individuals were utilizing their smartphones for in-store purchases. However, the pandemic significantly accelerated the transition to digital payment methods, as consumers aimed to reduce physical contact and reliance on cash. In response, governments across the MEA region have initiated programs to encourage contactless payments, further propelling the growth of this market.

In South America, companies are introducing innovative solutions to broaden their market presence. For example, in January 2024, Visa, a leader in digital payments, launched a new pilot program in Latin America and the Caribbean. This advanced technology allows consumers to effortlessly complete online transactions by simply tapping their Visa debit, prepaid, or credit cards on NFC-enabled Android smartphones. This innovation enhances the payment experience by providing greater convenience, speed, and security, effectively transforming smartphones into contactless payment terminals and optimizing the e-commerce process.

Data from the Reserve Bank of India indicates that as of March 2022, there were over 73.6 million credit cards, more than 917 million debit cards, and upwards of 6 million terminals in India. The adoption of contactless cards and the deployment of NFC-enabled terminals have been on the rise. According to Worldline India, the share of contactless transactions in supermarkets grew from 25% in January 2020 to 31% in January 2022. Key sectors for card spending include grocery stores, fuel stations, restaurants, and quick-service restaurants (QSRs), which together account for 80% of transaction volume and 60% of transaction value. These statistics underscore the extensive use of contactless payments in India, driving market expansion.

In Japan, contactless payment solutions have become increasingly popular, offering both residents and tourists enhanced convenience and efficiency. Various smartphone applications for contactless payments and QR code methods, such as PayPay, LinePay, Rpay (Rakuten Pay), and MerPay, are widely adopted in Japan, allowing users to pre-download these apps to facilitate quicker transactions. Japan's unique relationship with contactless payments is highlighted by the widespread use of digital Pasmo and Suica transport cards, which were initially designed for public transportation but are now accepted at numerous retail locations across the nation. Furthermore, the use of contactless electronic payment systems, referred to as cashless payments in Japan, has surged, with RFID technology enabling secure transactions via debit or credit cards, IC cards, or other payment devices. Most major convenience stores, retailers, and establishments throughout Japan now offer contactless payment options.

Key players in the contactless payments market include Infineon Technologies AG, Ingenico, Giesecke+Devrient GmbH, IDEMIA, CPI Card Group Inc., PAX Technology, SumUp Payments Pty Limited, Castles Technology, Visa Inc., and Mastercard. This market study also examines several other significant players to provide a comprehensive overview of the market and its ecosystem.

The overall size of the contactless payments market has been determined through a combination of primary and secondary research methods. The research process commenced with extensive secondary research, utilizing both internal and external sources to gather qualitative and quantitative data related to the contactless payments market. This approach also aims to provide an overview and forecast of market growth across all segments. Additionally, numerous primary interviews have been conducted with industry participants and experts to validate the findings and gain deeper analytical insights. Participants in this research include industry professionals such as VPs, business development managers, market intelligence managers, and national sales managers, as well as external consultants like valuation experts, research analysts, and key opinion leaders specializing in the contactless payments sector.