Report: One-Third of In-Store Payments Will Be Contactless by 2020
Experts believe OEM pay wallets will likely drive most of the growth.
By 2020, 30% of in-store purchases will be made with contactless payment cards and mobile wallets such as Apple Pay, Samsung Pay or Google Pay, according to new estimates from fintech analysis firm Juniper Research.
In-store contactless payments will hit $1 trillion this year and $2 trillion globally by 2020, representing 15% of total point-of-sale transaction value, the company said on Monday. Juniper Research had previously predicted that the world would not pass the $1 trillion mark until 2019.
Mobile wallet options from Apple, Samsung, Google and similar “OEM pay wallets” will likely drive most of the growth in the mobile contactless payment market, reaching 450 million users by 2020, it added.
Juniper Research predicted that Apple will account for about 50% of all OEM pay users globally by 2020.
“We believe that growth over the next five years will continue to be dominated by offerings from the major OEM players,” Juniper Research author Nitin Bhas explained. “Additionally, we now have the likes of Huawei Pay and Fitbit Pay launching in several markets; this is now included in Juniper’s contactless forecasts.”
Fitbit and other leaders in the wearables market have been gaining attention in the payments world, including from the credit union industry. The market for wearables was expected to post an 18.4% compound annual growth rate from 2017 to 2021, according to recent data from market intelligence company International Data Corporation.
Contactless card payments — whereby near-field (NFC) technology allows users to tap their cards on checkout terminals — will continue to dominate contactless payments, according to Juniper Research. The company reported that strong adoption in the Far East, China and the rest of the Asia Pacific region accounted for about 55% of global contactless card transaction values.
“Beyond in-store payments, the research forecasts rapid growth in contactless ticketing, especially in the European and North American markets where mobile wallets have been deployed. Juniper forecasts nearly 10 billion mobile contactless ticketing transactions (i.e., tickets purchased or validated) by 2022, with North America dominating the sector, followed by the Far East and China,” the company added.