A new report from Juniper Research has found that global contactless card transaction values will reach $2.5 trillion in 2021, increasing from the $1.7 trillion previously recorded in 2020.
The pandemic has significantly accelerated the existing contactless card usage trend, with cards retaining the majority share of overall contactless transaction values at 79% in 2021.
The new research, which has been detailed in the Contactless Payments: Trends, Opportunities and Market Forecasts 2021-2026, found that the combination of accelerated card issuance and usage during the pandemic with a series of global transaction limit increases have unlocked significant growth potential for contactless payments, fundamentally changing the payments paradigm.
Significant Growth in Previously Underdeveloped Markets
The report identified that market growth has already been catalysed by increased contactless card use in previously underdeveloped markets such as the US and Germany, and that this shift will be permanent. The US will see transaction value growth of 136% between 2020 and 2021, with major US retailers rolling out contactless acceptance and consumers enjoying the added convenience offered by touch-free card payments. Consequently, the US is anticipated to see further growth of almost 300% over the next five years.
Research author Susannah Hampton added, “Markets such as Germany have seen an unprecedented shift towards contactless cards in the past 18 months. This shift has severely diminished the role of cash and created significant opportunities for card issuers to gain market share.”
The Opportunity for Biometric Cards
The research identified that recent pandemic-driven contactless transaction limit increases have provided opportunities for biometric payment cards to tap into the trend towards secure, convenient, and hygienic payments.
Although still niche, biometric cards are set to see more extensive pilot schemes and wider deployments; offering an increased value proposition and presenting a way for banks and issuers to provide an innovative offering and differentiate themselves from the competition.