The contactless payments market will reach $27.23 billion globally by 2023, seeing a compound annual growth rate (CAGR) of 20.8%, according to a new report from Allied Market Research (

The research groups says the surge in smartphone penetration, integration of contactless cards with the existing cards, and benefits related to contactless payments such as flexibility and convenience is driving the growth in the market. However, security issues related to technology and difficulties regarding replacement of POS terminals hinder the market growth. On the other hand, rise in adoption from emerging nations and integration of IoT and contactless payment technology create new opportunities in the industry.

Mobile handsets accounted for nearly one-third of the total market share in 2017 and will maintain its leadership status during the forecast period. This is due to rise in investment by tech giants such as Apple, Samsung, and others for integrating contactless payment technologies in devices, according to Allied Market Research. However, smart cards would register the fastest growth, with a CAGR of 22.1% from 2017 to 2023, owing to benefits such as security, flexibility, convenience, and ease in replacement in case of mishaps.