More than half of global transactions at the point of sale (POS) will be contactless within five years, compared to just 15 per cent this year.
The figures are contained in a new study from Juniper Research.
The new research POS & mPOS Terminals: Vendor Strategies, Positioning & Market Forecasts 2017-2022, found that adoption in the US would rise sharply over the period, with contactless rising from less than 2 per cent of transactions this year to 34 per cent by 2022.
It argued that customer dissatisfaction at the slower speeds of chip card transactions, allied to burgeoning contactless infrastructure, would provide further impetus for smartphone-based payments currently dominated by Apple Pay.
According to the research, in markets where contactless has been heavily promoted, such as Poland and the UK, adoption has soared, while mandates both from Visa and Mastercard mean that all POS terminals in many markets must be contactless-enabled by 2020.
US to Follow European Growth Curve
Research author Dr Windsor Holden said, “While US card issuers haven’t yet made contactless a priority, the extremely positive response across Europe, both from merchants and consumers, suggests the US would see very rapid migration at POS if and when contactless cards become mainstream.”
But the research cautioned that for non-contactless payments, the US’s reluctance to implement PIN at POS meant that the full benefits of CP (Card Present) fraud reduction, experienced elsewhere by the migration to EMV, were unlikely to be realised.
Smaller Merchants Drive mPOS Market
The research also anticipated that smaller merchants would increasingly embrace mPOS (mobile Point of Sale) accessories, which facilitate payments via a connection to a mobile device, as competition in the space intensified.
It argued that Square’s recent entry into the UK would provide an added stimulus to that market. It further claimed that the growth in this market would in turn accelerate the transition from cash to card payments, particularly for lower-value transactions.
Juniper Research is acknowledged as the leading analyst house in the digital commerce and fintech sector, delivering pioneering research into payments, banking and financial services for more than a decade.