“NFC Payments Market”
Shift to Contactless Payments Due to Covid-19 Pandemic is Driving the Growth of NFC Payments Market.
The global NFC Payments Market is estimated to surpass $10.4 billion mark by 2026 growing at an estimated CAGR of more than 14.5% during the forecast period 2021 to 2026. Increased use of technology in financial transaction and rise in various e-commerce platforms are expected to accelerate the NFC Payment market during forecast period. Digital payments in India are witnessing thriving growth with a compound annual growth rate of 12.7% in the number of non-cash transactions. Similarly, China mobile wallets are growing at rate of 22% with the total transaction volume of $41.1 trillion in 2019. Increasing adoption of non-cash transaction will likely to create the demand for NFC Payment market. With the increasing integration of contactless payment technologies in mobile handsets and smartphones, the demand for contactless payment solutions has grown tremendously across all countries. In addition, rising awareness of plastic money and smart cards among the buyers, increasing frequency of purchases and the need for fast transaction time without any inconvenience of standing in long queues is also accelerating the market in the forecast period.
NFC Payments Market Segment Analysis – By Device Type
Mobile Devices is growing at a highest CAGR of 15.2% in the forecast period. Owing to the growing usage of smartphones all over the globe. In addition, personalized experiences, rising penetration of internet, higher speed of contactless transactions will propel the market growth. Moreover, several companies are planning to launch contactless payment solutions for smartphones. In 2019, MasterCard has announced to launch solution for smartphones to become contactless acceptance devices. Similarly, in 2019, State bank of India (SBI) has launched a contactless mobile payment facility. In addition to this contactless payment services such as Google pay, Samsung pay and so on have been updating their services from time to time. Hence these advantages are analysed to drive the market for Mobile devices in the forecast period 2020-2025.
NFC Payments Market Segment Analysis – By Industry Vertical
Retail sector is growing at a CAGR of 17.5% in the forecast period. Contactless payment in retail sector allows issuers to penetrate the cash payment market, enjoy increased transaction volume, improved customer retention and loyalty. Moreover with the impact of covid-19 consumers and retailers enjoy the convenience of hands-free payment. In addition, this type of payments are particularly attractive to retail segments where speed and convenience of payments are essential. Furthermore Government of several countries have taken several initiatives to increase the limit of contactless payment apps. In 2020, Barclaycard to enable UK retailers to accept new £45 Contactless Limit. Similarly several other platforms have been increasing the limit as to help prevent the spread of Coronavirus.
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NFC Payments Market Segment Analysis – By Geography
North America, which has displayed affinity over the years in adopting newer technologies, is the most lucrative region for the NFC Payments market, generating a global demand share of 36.4% in 2020. With several innovative key market players located in North America such as PayPal Holdings, Inc., Apple, Google and Microsoft Corporation, this region is leading the innovative front with development of novel technologies such as contactless payments including near-field communication. A high rate of internet penetration, growth of e-commerce and micropayment options has contributed to the popularity of the NFC Payments market in North America.
NFC Payments Market Drivers
Government Initiatives and Regulations
Government is pushing players in the banking and payments ecosystem to encourage cashless payments at merchant outlets through contactless payment including through NFC Technologies. For instance, in 2016 the Digital India program that promoted cashless payments within the government sector and improved cybersecurity within the region has caused an increased adoption of NFC Payments across the region. Similarly in Kenya, the local mobile phone company Safaricom with the support of government has pushed the envelope and created a system known as M-Pesa to allow customers to make NFC payments directly from their phones. These initiatives and regulations will create demand for NFC Payments.
Shift to Contactless payments due to Covid-19 Pandemic
The COVID-19 pandemic has had a significant impact on the contactless payment market, as consumers and businesses are forced to change their buying habits. There has been an incredible spike in the adoption of mobile wallets, as NFC contactless payments have become vital for purchases. Avoiding cash and card transactions to keep COVID-19 from spreading has prompted many subscribers to try out mobile wallets. Since the COVID-19 crisis complicates every day, consumers become accustomed to digital payments, making mobile money important for each transaction.
NFC Payments Market Challenges
Low Trust in NFC Payments
Low trust in NFC Payments is a major factor which will hamper the market in the forecast period. For instance, according to the report given by YourGov, about 43% of the mobile users don’t trust NFC Payments and 38% have low confidence on security. Similarly, most of the consumers are reluctant to adapt to NFC Payments as contactless payment presents huge unknown risk and fraud like leaked data, hacking and e-wallet vulnerabilities. Moreover less awareness about the benefits of using NFC Payments over using cash or credit cards and debit cards for online payment and buying expensive items. All these conditions will restrain the market growth in the forecast period
NFC Payments Market Landscape
Product launches, acquisitions, and R&D activities are key strategies adopted by players in the NFC Payments Market. Google, Amazon, Apple Inc., Gemalto N.V, Giesecke& Devrient Gmbh, Ingenico Group, Verifone Systems, Inc., Wirecard AG, Heartland Payment Systems,Inc. and Inside Secure are considered to be the key players of the NFC Payments Market.
Acquisitions/Technology Launches/Partnerships
In 2019, Wirecard and Sisal Group signed agreement to collaborate in the field of contactless payment solutions for the brand SisalPay
In 2020, CPI Card Group Inc., a payment technology company and leading provider of credit, debit and prepaid solutions highlighted its dual interface metal card solution, which uniquely captures two major trends in consumer payments (metal and contactless.)
Key Takeaways
Contactless payment in retail sector allows issuers to penetrate the cash payment market, enjoy increased transaction volume, improve customer retention and loyalty.
Use of transaction modes such as NFC / smart cards has speeded up the transaction process. In addition, the development of e-commerce websites has led to an increase in the number of online transactions that can be considered an attraction for the mobile money market.
Outbreak of coronavirus has made Contactless payments a more preferred method of payment as it require less physical interaction.
Related Reports :
A. Digital Payments Market
https://www.industryarc.com/Research/Digital-Payments-Market-Research-510099
B. Mobile Payments Market
https://www.industryarc.com/Report/42/Mobile-Payments-Market.html
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Source: NFC Payments Market Estimated to Surpass $10.4 Billion by 2026
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