Contactless payments growing as new deadlines approach.
Over half of all payment cards issued in the world this year will be contactless, according to new data from technology advisory firm ABI Research. That amounts to about 1.5 billion contactless cards issued in 2018, and by 2022, issuers will be pumping 2.3 billion contactless cards per year into markets around the world, it projected.
Much of the growth appears to be coming from contactless-card migration in the United States, as well as in India, Southeast Asia and Latin America, ABI Research reported.
"The buzz in contactless migration and market expectations has been further heightened thanks to the contactless migration mandates put in place in Latin America and South East Asia," it added. "With short deadlines, set by Visa and MasterCard, coming into effect in October 2018 for POS terminals and April 2019 for new card issuance respectively, all eyes are pinned toward these two regions as significant growth areas for the contactless payment card interface."
Contactless cards securely transmit payment transaction data when they are within a few inches of an enabled point-of-sale terminal, eliminating the need to swipe or insert the card. Near-field communications technology, or NFC, enables contactless payments. Merchants interested in accepting contactless payments typically must have NFC-enabled point-of-sale terminals.
Differentiation is becoming a bigger part of issuers' competitive strategies around contactless cards, ABI Research Principal Analyst Phil Sealy said.
"The leading smart card vendors, including Gemalto and IDEMIA, have primed their respective payment card product portfolios to take advantage of a card market which is transforming from one of delivering secure payment authentication, toward new functionality and personalized experiences to stand out from the crowd, create new levels of brand stickiness and ultimately broaden card portfolios via new form-factors, including metal cards and next-generation powered payment cards with biometric and display enabled form-factors," Sealy explained.
The ABI Research findings come on the heels of a different study by Juniper Research, which recently reported that 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.
It projected that 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. 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.
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