OEM Pay continues to grow in popularity for in-store payments but lags behind contactless card transactions worldwide
OEM Pay transaction values to exceed $1 trillion by 2022: research. Source: pexels.com
OEM Pay contactless transactions, managed by Apple Pay, Samsung Pay, and Google Pay will reach over $1 trillion in 2022, according to Kaleido Intelligence. This is a 377% increase compared to the pre-COVID-19 level in 2019 and will represent about 11% of the total number of transactions.
The report has found that OEM Pay transaction costs have surged 155% in 2020 following an influence to COVID-19. The global pandemic has had a significant impact on the way consumers shop: while global in-store retail sales fell 7% in 2020, online sales grew 9%.
Anyhow, offline in-store shopping has seen a significant increase and acceleration in low-value shopping cart purchases becoming contactless, contributing to a 105% increase in the cost of the contactless card and mobile payment transactions in 2020.
While contactless payments have become existing in most European markets, this has not happened in the United States. More recently, the US has seen a tremendous rise in total contactless payments, driven by declining issuance costs, greater acceptance by sellers, and rising consumer consumption. This has been further accelerated as in many other markets.
Kaleido estimates that after a significant drop in retail spending in China, the global QR code-based contactless retail payment market shrank by 7% in 2020 to just over $2.8 trillion. That figure is projected to reach $3 trillion again in 2023, driven by growth in new markets.
QR code payments have changed the face of in-store retail payments in China and are rapidly gaining traction in South Asia, Southeast Asia, Latin America, and Africa. These markets are adopting QR code payment standards as they strive to become a digital society. Markets such as India will see strong adoption, with annual transactions projected to exceed $100 billion over the next few years.
At the same time, there has been a sharp decline in the use of cash, and markets such as China, the United States, Australia, Denmark, Finland, and Sweden are leading the way to become cashless societies. Global in-store cash transactions surpassed $8 trillion in 2016 and have declined steadily since then, with the largest drop of 15% in 2020.
We’ve reported that there will be over 4B digital wallet users worldwide in 2025.
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