Global Market Insight estimates the market valuation for contactless payment will cross US$100 billion by 2026. Increasing enterprise and consumer inclination toward digital transformation and proliferation of smartphones will surge the demand for contactless payments.
The increased deployment of POS terminals across retail outlets and growing consumer preference for mobile wallets will drive the contactless payment market growth, says Global Market Insight. In January 2020, Blackhawk Network Holdings revealed that mobile wallet adoption is estimated to generate around $190 billion in transactions in the U.S. by 2021. Retailers are integrating mobile wallets with customer loyalty cards and promotions to enhance the consumer shopping experience. In February 2019, The Kroger Co. introduced a mobile payment program to provide shoppers with loyalty rewards such as fuel points and private brand discount.
Global Market Insight says RFID-based contactless payment will gain traction as several merchants are adopting smart payment to improve customer experience and maximize profits. Cards equipped with RFID technology offer secure, faster, and convenient payment processing compared to chip-and-PIN payments cards. The technology has a memory chip or tag that stores data and RFID readers. The technology is widely used in toll collection, warehouse, and logistics transactions, and in the retail sector.
Contactless payment technology is gaining popularity in the healthcare sector for various applications, according to Global Market Insight. Hospitals, clinics, and insurance companies are adopting contactless smart card solution for fast transactions. Patient information can also be saved in these medical smart cards. It provides secure access to emergency medical information and portable medical records and reduces healthcare fraud. The technology also provides platforms to implement other applications as needed by healthcare organizations and enables compliance with government initiatives and mandates.
Global Market Insight forecasts that the North American market will witness significant traction from 2020 to 2026. Growing adoption of advanced payment techniques across various sectors, such as retail, transportation, and healthcare, is driving the contactless payment market demand.
According to the Mastercard Survey in 2020, more than 56% of consumers use contactless cards, enabling convenient payment solutions at retail outlets. The overall usage of contactless payments in the region has risen by 150% in March 2019. In addition, the high internet penetration rate in the region will support market growth.