According to our latest study on "Contactless Payments Market Size and Forecast (2021-2031), Global and Regional Share, Trend, and Growth Opportunity Analysis - by Payment Mode, Component, and Industry Vertical," the market was valued at US$ 33.27 billion in 2023 and is expected to reach US$ 91.80 billion by 2031; it is estimated to record a CAGR of 13.5% from 2023 to 2031.

IoT-Embedded Contactless Payment to Provide Lucrative Opportunities for Contactless Payments Market Growth During Forecast Period

The IoT contains a vast network of interconnected devices, each embedded with sensors and software, capable of collecting and exchanging data over the Internet. Wearable devices, such as smartwatches, contactless payment cards, and mobile apps embedded with IoT technology, allow users to make payments with a simple tap or hold their device near a point-of-sale (PoS) terminal. The elimination of physical cards or cash not only streamlines the transaction process but also minimizes the risk of loss or theft. Security concerns have long been a central focus in financial transactions. The IoT introduces a myriad of innovative solutions to bolster security in payment processing. Biometric authentication, for example, is increasingly integrated into smart devices, adding a layer of verification beyond traditional passwords. This not only enhances security but also enhances the user experience. Moreover, IoT devices can continuously monitor and analyze transaction data in real time, swiftly identifying any anomalies or suspicious activities. Machine learning algorithms, when combined with IoT capabilities, enable financial institutions to develop predictive models that detect and prevent fraudulent transactions with higher accuracy. Connected devices within the IoT ecosystem can also communicate with each other to optimize payment experiences. For instance, a smart car equipped with IoT capabilities could facilitate automated toll payments without requiring any direct interaction from the driver. Thus, IoT-embedded contactless payment is expected to create a lucrative opportunity for the growth of the contactless payment market.

Key Findings of Contactless Payments Market Study:

Key companies are collaborating to expand their business in the country. For example, in August 2023, Visa Ready for Transit partnered with Conduent Transportation, a transit technology business, and Getnet, a digital payment startup, to implement contactless transit payments on Mexico Citi's Metrobus. Metrobus serves ~1.8 million passengers daily, with prepaid cards generally used for payment. The improvement allows commuters to use contactless credit and debit cards, smartphones, and web-connected wearables. The underlying technology includes QR code readers at the bus network's boarding points. Furthermore, according to MexicoBusiness.com, ~56% of Mexico City residents use mass transit.

In December 2023, OXXO introduced contactless payment options at its convenience stores so that customers can use a smart device to pay for their purchases. The service is currently accessible in 10,000 stores across Mexico. Further it is expected to boost the adoption of contactless payment in the country.

In 2023, in-store mobile payments experienced significant growth in Italy, with Nexi recording an 88% increase in the value of in-store mobile payment transactions via smartphones and smartwatches in the country. According to data released by the Innovative Payments Observatory of the School of Management of the Polytechnic of Milan, mobile-based payments increased by 78% overall in Italy last year, reaching a value of EUR 29 billion. Specifically, the number of payments processed by Nexi via smartphones and wearables during 2023 increased by 103%, while the number of Nexi cards registered on apps that virtualize the card on the smartphone, such as Google Pay, Samsung Pay, and Apple Pay, grew by 41% in the same period. These stats highlight the growing popularity and adoption of contactless payment in the country.

According to Adyen, China is a global leader in the use of mobile payments, having the highest population, largest e-commerce market, and fastest-growing economy in the world. With 92% of users utilizing digital wallets such as Alipay and WeChat Pay, which use QR codes as their primary means of payment, China has the largest percentage of mobile payment users globally. Mobile payments are already popular; however, cards are still a little less common due to consumers' preference for digital purchases via QR codes rather than ubiquitous point-of-sale systems. Almost one-third of all luxury purchases made worldwide are made by Chinese consumers. Furthermore, Chinese travelers are predicted to spend nearly twice as much overseas by 2025-more than US$ 255 billion. These stats highlight the upward trend for the contactless payment market in China.

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