Contactless transactions to hit $2.5 trillion in 2021

The total volume of contactless transactions is set to hit $2.5 trillion in 2021, up from $1.7 trillion in 2020, according to new research from analyst house Juniper Research.

Card payments will still account for most contactless transactions – 79 per cent - in 2021 according to Juniper.

The analyst house’s report said that worldwide contactless market growth has already been fuelled by increased contactless card use in previously underdeveloped markets such as the US and Germany, and that this shift will be permanent.

The US is set to see transaction value growth of 136 per cent between 2020 and 2021, as more major US retailers begin accepting contactless payments and consumers are drawn to the added convenience offered by touch-free card payments.

In addition, the US is anticipated to see further growth of almost 300 per cent over the next five years according to Juniper.

The research also said that the recent pandemic-driven contactless transaction limit increases have provided opportunities for biometric payment cards to grow.

Although still niche, biometric cards are set to see more extensive pilot schemes and wider deployments according to Juniper, as they allow banks and issuers to provide an innovative offering and differentiate themselves from the competition.

“Markets such as Germany have seen an unprecedented shift towards contactless cards in the past 18 months,” said research author Susannah Hampton. “This shift has severely diminished the role of cash and created significant opportunities for card issuers to gain market share.”

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