Growing mobile payment adoption will catalyse robust contactless payment transaction growth during the next five years
A new study from Juniper Research revealed that the value of contactless payment transactions will reach $10 trillion globally by 2027. That will reflect more than a twofold growth compared to the $4.6 trillion anticipated in 2022.
The research also expects that investment in the underlying contactless payments ecosystem will be the key driver of contactless transactions value growth. The related technologies include contactless‑enabled POS (Point-of-Sale) terminals and device-level support.
Transition to cashless society driving growth
Juniper Research predicts that the push toward cashless societies will drive growth in the next five years. However, the growth will be uneven across different contactless payment means. For instance, the study anticipates that mobile and wearable contactless payments will grow by 221% between 2022 and 2027. To compare, contactless card payments are anticipated to grow by only 119% during the same period.
The explanation for such discrepancies is that mobile and wearable payments offer consumers more convenience, eliminating the need to carry a contactless card. The payment providers, in their turn, can save on producing the physical cards, especially considering the global semiconductor (chip) shortage which drives the card cost up. Thus, this payment method eases the burden of transitioning away from cash for both businesses and consumers.
Furthermore, the report identified that the high growth of POS terminals capable of accepting contactless payments will also fuel the growth. Therefore, the study urges POS vendors to prioritise convenience when designing NFC solutions for the market and expand capabilities to cater to the growing number of NFC-enabled devices.
Contactless ticketing enables strong contactless payment transaction growth
Last but not least, the research anticipates that contactless ticketing spend will grow by over 440% between 2022 and 2027. NFC ticketing volumes have recovered strongly after the pandemic-related restrictions eased. This spending is forecast to continue rising rapidly over the next 5 years.
NFC ticketing growth will be further accelerated by the rapid deployment of related solutions across public transport networks. Therefore, the report urges vendors to foster the adoption of their NFC ticketing solutions reducing payment friction for customers. They should target the public transport sector in developed regions that are increasingly seeking out ways to improve ticketing efficiencies.