A new study from Juniper Research (www.juniperresearch.com) has found that the global value of contactless POS (point of sale) terminal transactions, conducted in-store via cards, mobile and wearables, will approach $500 billion annually by 2017; this is up from an estimated $321 billion this year.
However, the low value nature of contactless payments means that it will only represent just 5% of the total value of all POS transactions in 2017. According to the research group, the surge in contactless-enabled POS terminals in 2015, allied to retailer obligations to card companies in many markets to ensure that all terminals will be contactless ready by 2020, is likely to prompt an upsurge in migration to contactless payment. For example, Visa announced more than 3.2 million contactless terminals in Europe as of April 2016, up 23% from 2.6 million at the end of April 2015.
Contactless terminals now account for a significant minority of terminals in many regions (and in a majority in several national markets) and, as of the end of 2015, numbered 15.3 million, or nearly 20% of all POS terminals worldwide. These numbers will increase sharply over the next five years, with contactless accounting for more than 2-in-3 POS terminals by 2021. The research pointed out that the frequency of contactless payments may indeed be limited in some markets.
“This is mainly due to the lack of widespread availability of supporting POS contactless reader terminals and also that some potential users are likely to remain cash-centric. For example, Germany remains a highly cash-centric economy, with cash still accounting for around 57% of in-store retail transactions by value,” saidd research author Nitin Bhas.
Other key findings include:
° Contactless cards will represent 1 in 2 payment cards in issue by 2020.
° Smartphone and tablet-based mPOS terminals will handle 20% of all retail POS transaction value by 2021.