SEATTLE, Nov. 2, 2021 /PRNewswire/ -- Contactless payments are emerging as a preferred method of currency payments because of their security, speed, and reliability. Contactless payment methods can be made of plastic, paper, or biometric technology. They have gained in popularity in recent years due to the privacy concerns they provide. Some of these methods are more secure than others. With the rising costs in handling transactions through cash, contactless payments are becoming an increasingly popular choice. The most commonly used contactless payments method is the tap-to-pay system. This system involves swiping your debit or credit card through a reader on a reader terminal. A camera transmits the information to the payment processor where it is converted into an electronic transaction. This type of transaction is fast, convenient, and reliable because the transaction cannot be blocked by merchants or financial institutions. This type of transaction is ideal for online transactions and for point-of-sale transactions.
The global contactless payments market is estimated to account for 26.3 Bn in terms of value by the end of 2027.
1. Increasing adoption of digital payment platforms is expected to drive growth of the globalcontactless payments market during the forecast period.
With rising penetration of smartphones and high-speed internet, consumers have shifted towards digital payments instead of cash. Digital payments provide a seamless experience to customers and reduce the dependency on cash with the fast transfer, and ease of tracking the transaction. According to a mid-year survey published in 2020 by the National Retail Federation and Forrester, contactless payments market increased for 69% of retailers with around 67% of retailers now accepting some form of contactless payment across the U.S.
2. Enhanced purchase experience for consumers is expected to propel the global contactless payments market growth over the forecast period
With the integration of contactless payments, customer experience is improving rapidly. Consumers are becoming less dependent on cash as digital payment offers a better alternative. Contactless payments are beneficial for both consumers and retailers due to higher payments security, instant payment facility, low risk of theft, and high level of transparency. Furthermore, contactless payments witnessed significant growth during the COVID-19 pandemic as people started avoiding human touch to save themselves from infection.
1. Advent of new security features such as Blockchain and 5G can present lucrative growth opportunities
Although there were concerns expressed over the safety of contactless payments, Blockchain has emerged as the most ideal solution for that. Blockchain offers a distributed ledger system where transactions are stored and updated in real-time. Since every transaction recorded on the block is time-stamped, it makes the transaction tamper-proof and immutable. This way Blockchain enhances the trust and security for both buyer and seller. Furthermore, the advent of 5G has improved digital payment systems, reducing errors, high speed, and a more personalized experience.
2. Growing demand for wearable and mobile payment devices can provide prominent business opportunities
Wearable payment devices refer to payment transactions done through wearable devices, which are integrated with wireless technologies such as RFID or NFC. Wearable and mobile devices are the most convenient mode of transaction that ensures safety and hygiene, especially during the COVID-19 pandemic. For instance, in March 2021, Axis Bank launched contactless wearable payment devices 'Wear N Pay' for on-the-go convenient transactions.
1. Retail Sector
The retail sector has emerged as the most prominent user of contactless payment in the recent past. This is typically due to rising implementation of point-of-sale (POS) terminals in the banking, hospitality, and retail industry. Moreover, rising integration of the Internet of Things (IoT) with exiting payment solutions has increased the adoption of contactless payments across the retail sector.
2. Europe Trends
Among regions, Europe is expected to witness significant growth in the global contactless payments market during the forecast period. This is owing to increasing electronic money transactions with the integration of real-time & biometric solutions. Moreover, favorable government policies including open banking and second payment services are expected to further drive the regional market growth in the near future.
Major companies involved in the global contactless payments market areThales Group (Gemalto NV), OTI Global, VeriFone Systems Inc., Visiontek Products LLC, Ingenico Group SA, Hewlett Packard Enterprise, Castles Technologies, ID Tech Solutions, and NEC Corporation.
Key companies are focused on partnerships and collaborations, in order to enhance the market presence. For instance, in September 2021, Thales Group partnered with EVERING to provide embedded security and contactless technology as well as payment personalization services with a smart ring.
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