New research figures predict that global contactless card transaction values will reach $2.5 trillion in 2021, from $1.7 trillion in 2020, with cards retaining the majority share of overall contactless transaction values at 79% in 2021.
The pandemic has significantly accelerated an existing contactless card usage trend, and these value increases will be sustained beyond 2021 and into the future.
The new research 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 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.
“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,” explains research author Susannah Hampton.
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.
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