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Contactless Payment Terminals Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

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  • 120 Pages
  • April 2023
  • Region: Global
  • Mordor Intelligence
  • ID: 4591881
UP TO OFF until Sep 30th 2023

Quick Summary:

Advancements in technology have revolutionized the payments landscape, with the contactless payment terminals market poised for significant growth. This growth is attributed to the widespread digital transformation sweeping across various industries worldwide, as well as the increased consumer inclination towards the convenience of digital payments. This essential report provides an in-depth analysis of this rapidly evolving market.

The trend towards cashless economies, increased adoption of smartphones, and technological enhancements in retail POS terminals drive the market. More importantly, efforts to strengthen security against financial fraud have intensified, bolstering the demand for secure payment processes such as contactless payment terminals. As global mobility trends evolve, mobile POS systems have become more popular, promising considerable market growth. This report offers essential market intelligence to help you stay ahead in the ever-changing payments and transactions landscape.

The contactless payment terminals market is expected to witness a CAGR of 25.86% over the next five years. The global landscape of payments and transactions is changing rapidly, owing to the growing enterprises and consumer propensity toward digital transformation and the proliferation of smartphones. Technological advancements in smartphones, digital payment cards, and retail POS terminals fuel market growth.

Key Highlights

  • More and more countries are moving toward becoming cashless economies, thus encouraging digital payment providers by incentivizing their consumers' digital forms of payments. In addition, growing contactless card transactions worldwide drive the demand for contactless payment terminals in various end-user industries.
  • Contactless payments are gaining significant traction due to their convenience and preference. As a result, various wearable device manufacturers are incorporating near-field communication (NFC) technology as a standard into most devices to provide greater convenience by removing the need to fumble with a wallet, purse, or phone.
  • In addition, the global consumer inclination toward payment methods involving smartphones is increasing in the form of contactless payment methods at POS systems, owing to which card and financial service providers are either offering their card solutions on smartphones or via third-party vendors.
  • Additionally, the rising financial frauds worldwide have influenced government regulatory bodies to secure payment transactions over the past few years. With customers demanding safe and reliable digital transactions, the need for using secure payment processes has increased. Therefore, these regulatory bodies have positively impacted the adoption of POS terminals. With the increasing mobility trends worldwide, mobile POS systems are gaining traction. With the advent of cashless transactional technologies, POS is expected to witness an increase in adoption rates.
  • Moreover, technological advancements are shaping the future of the contactless payment terminals market. Market vendors are focusing on developing payment platforms that are agile and efficient and also increase the penetration and reach of contactless payments. For instance, in February last year, digital payments player Infibeam Avenues Limited (IAL) announced to broaden its payment solutions portfolio by launching a no-hardware contactless mobile point of sale (POS), which will facilitate card payment transactions for small vendors through a tap-on-phone technology.
  • During the COVID-19 pandemic, consumers worldwide started finding ways to avoid human contact in order to protect themselves from getting affected. Due to this, the demand for contactless payments has increased, boosting the demand for various contactless payment terminals, such as contactless POS terminals, in multiple industries. In addition, even after the pandemic, the demand for contactless payment terminals is expected to grow rapidly, owing to the proliferation of digital payments in emerging economies.

Key Market Trends

Retail Industry is Expected to Hold Major Market Share

  • The retail segment is expected to hold a significant market share owing to the increasing use of various contactless payment terminals in the retail industry, coupled with benefits associated with offering contactless payment terminals, such as increased customer satisfaction and promotion of store sales. Retailers offering contactless payment options provide quicker and smoother checkout experiences, thus gaining customer loyalty.
  • POS terminals across the retail outlets and a preference for mobile wallets while checking out from physical stores are primary drivers for this segment. The evolution of mobile-based POS (mPOS) includes a card reader connected to a basic ePOS app running on a tablet or smartphone. Merchant onboarding is simple, and the service is delivered on a ‘pay-as-you-go model. Such instances are further expected to drive the adoption of contactless payment terminals in retail segments.
  • Market vendors are offering innovative solutions for retailers, which are expected to drive the adoption of contactless payment terminals in the retail segment. For instance, in September last year, Square announced the launch of Tap to Pay on iPhone to its millions of sellers across the United States. Available in the Square Point of Sale iOS app, the newly launched Tap to Pay on iPhone will enable sellers of all sizes to accept contactless payments directly from their iPhone without any additional hardware required and additional cost to the seller.
  • Moreover, the growth in contactless credit card and debit card transactions in retail stores is expected to drive the demand for contactless terminals in the retail sector over the forecast period. For instance, according to the data from Worldplay, debit cards were the most popular method for POS transactions in the United Kingdom in 2021, accounting for 45% of transactions, followed by credit cards with 28% of transactions.

Europe is Expected to Hold Significant Share in the Contactless Payment Terminals Market

  • The European region is expected to hold a significant share of the market over the forecast period, owing to the changing payment landscape for many reasons: innovation, regulatory developments, the COVID-19 pandemic, and changing consumer habits. Moreover, the wider adoption of contactless payment terminals in various end-user sectors is witnessing significant growth, further driving the market in the coming years.
  • Wearable devices for payments continue to take off in Europe as consumers quickly and easily integrate this relatively new payment method into their daily lives. For example, a wearable device, a ring, bracelet, or smartwatch, has Near-field Communication (NFC) capabilities. There exists ‘passive’ and ‘active’ wearables. With a passive wearable, like a ring, the transaction can be approved by entering a PIN code on the payment terminal (just like with a plastic card). With active wearables, like a smartwatch, the PIN can be entered on the wearable itself, and payment can be completed with a single tap.
  • Additionally, amidst the COVID-19 situation, contactless card limits across Europe grew substantially as contactless payments were promoted across the continent. More and more consumers in the region are moving toward contactless payments after the pandemic, which is further expected to drive the market. For instance, according to European Central Bank (ECB) report, contactless card payments at the POS increased considerably in three years, from 41% of all card payments in 2019 to 62% in the last year.
  • In addition, continuous product innovation by market vendors in the region is expected to drive the market over the forecast period. For instance, in May last year, PayPal Holdings Inc. launched Tap to Pay with Zettle by PayPal for small businesses in the United Kingdom. The new function will enable individual sellers and small businesses to accept contactless in-person payments directly on Android mobile devices without additional hardware and fees.

Competitive Landscape

The contactless payment terminals market is consolidated because few players have a significant market share. Moreover, the lack of awareness of consumers toward contactless cards and concern over security issues make market entry tough for new players. Some of the key players in the market include Thales Group, OTI, VeriFone Systems Inc., Hewlett Packard, and Ingenico Group SA.

In September 2022, ProvidusBank, with Thales Group, Mastercard, and Interswitch, announced a new Tap-to-Pay service in Nigeria. The Tap-to-Pay service allows cardholders to make fast, secure, and convenient in-store payments by tapping their NFC-enabled smart device at any contactless-enabled payment terminal.

In March 2022, together with Softpay.io, Nets, part of Nexi Group, launched the new and innovative softPOS solution, Softpay, that enables merchants to accept contactless payments on Android smartphones and tablets, just like a payment terminal, without additional hardware.

Additional benefits of purchasing the report:

  • The market estimate (ME) sheet in Excel format
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Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Porter's Five Forces Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Assessment of COVID-19 impact on the industry
5.1 Market Drivers
5.1.1 Reduction in Queuing Time and Quicker Checkout Time
5.1.2 Convenience and Ease Associated with Contactless Payments
5.2 Market Restraints
5.2.1 Security Concerns Regarding Digital Payment
6.1 Technology
6.1.1 Bluetooth
6.1.2 Infrared
6.1.3 Carrier-based
6.1.4 Wi-Fi
6.1.5 Other Technologies
6.2 Payment Mode
6.2.1 Account-based
6.2.2 Credit/Debit Card
6.2.3 Stored Value
6.2.4 Smart Card
6.2.5 Other Payment Modes
6.3 Device
6.3.1 Integrated POS
6.3.2 mPOS
6.3.3 PDA
6.3.4 Unattended Terminal
6.3.5 Contactless Reader
6.3.6 Other Devices
6.4 End-user Industry
6.4.1 Retail
6.4.2 Transportation
6.4.3 Banking
6.4.4 Government
6.4.5 Healthcare
6.4.6 Other End-user Industries
6.5 Geography
6.5.1 North America United States Canada
6.5.2 Europe United Kingdom Germany France Rest of Europe
6.5.3 Asia-Pacific China Japan India Rest of Asia- Pacific
6.5.4 Latin America Brazil Argentina Mexico Rest of Latin America
6.5.5 Middle-East and Africa United Arab Emirates Saudi Arabia South Africa Rest of Middle-East and Africa
7.1 Company Profiles
7.1.1 Thales Group
7.1.2 OTI Global
7.1.3 VeriFone Systems Inc.
7.1.4 Hewlett Packard Enterprise
7.1.5 Ingenico Group SA
7.1.6 Visiontek Products LLC
7.1.7 PayPal Holdings Inc.
7.1.8 Castles Technologies
7.1.9 ID Tech Solutions
7.1.10 NEC Corporation

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Thales Group
  • OTI Global
  • VeriFone Systems Inc.
  • Hewlett Packard Enterprise
  • Ingenico Group SA
  • Visiontek Products LLC
  • PayPal Holdings Inc.
  • Castles Technologies
  • ID Tech Solutions
  • NEC Corporation