Contactless mobile payments to surpass a billion users in 2024
Summary
A new study has found that the total number of unique contactless mobile payment users will top a billion globally by 2024, an increase of 60% from 782m in 2022.
The study identified the key growth driver as increased investment in contactless acceptance infrastructure, particularly across emerging regions. This is expected bring attract more than 200m new contactless payment users by 2024.
The research sees increasing consumer demand for convenient and frictionless payment methods as another factor that is fuelling accelerating growth. Consumers now only require a smartphone or NFC-enabled device to make contactless payments, eliminating the need to carry multiple payment cards.
The study’s author Jordan Rookes said ‘NFC mobile payment vendors need to maximise convenience by offering additional payment options like BNPL that will encourage adoption. BNPL allows consumers to pay in installments, making high-value purchases more affordable.’
The research highlights growing smartphone ownership in emerging regions like Asia Pacific, where it is expected to hit 99% by 2024. This will enable another 67m individuals to adopt mobile payments, as their handsets will provide all the hardware they need to make NFC payments.
To capitalise on high-growth markets around the world, NFC mobile payment vendors must encourage consumers to switch from mobile money to NFC payments by educating them about the benefits NFC payments provide, while also supporting efforts to improve NFC acceptance infrastructure.
The advent of soft POS, which enables smartphones to accept NFC payments, will quickly expand the contactless acceptance infrastructure. Soft POS is associated with lower costs, compared with traditional contactless POS, as it eliminates the need for additional hardware.
Insights
The future of mobile payment trends is an exciting one, something that has been transformed by the pandemic over the last few years. This brings with it an equally exciting number of new opportunities for the payment services sector with the introduction of new ‘contactless’ solutions, in which actual wallets are being replaced by virtual wallets. With this increase in opportunity and convenience, however, comes increased risk, particularly relating to information security and data privacy. This, in light of the new Consumer Duty and Operational Resilience regimes is likely to create the need for payment services firms to review and enhance their internal controls and the treatment of retail customers if they are to continue to deliver good customer outcomes.
Lorraine Mouat - Head of Payment Services