Proximity Payment Market Outlook – 2030
The global proximity payment market size was valued at $13.98 billion in 2020, and is projected to reach $46.80 billion by 2030, growing at a CAGR of 12.9% from 2021 to 2030.
Proximity payment technology allows devices to communicate & conduct payment normally within a distance of 4 cm. This payment method allows to pay for goods and services by mobile phones & other devices at a physical point-of-sale (POS) terminal. Moreover, proximity payment is initiated from a mobile phone that uses Near Field Communication (NFC) technology. Furthermore, in NFC payment, the payment and reader devices must be near to each other to proceed with the transaction, so that NFC chips can interchange cryptographic data to complete the transaction.
Real-time transaction processing, flexibility of payment devices, reduced transaction time, and increase in convenience are some of the major benefits provided by proximity payment market, which propels the market growth. In addition, massive adoption of proximity payment among merchants and rise in usage of smartphones & surge in faster connectivity have enabled retailers and customers to conduct proximity payment via their smartphones propel growth of the market. However, increase in data breaches and difficulties in replacement process of point-of-sale (POS) terminal hamper growth of the market. On the contrary, developing economies offer significant opportunities for proximity payment companies to expand their offerings, owing to factors such as growth in the middle-class segment, rapid urbanization, rise in literacy level, and increase in tech-savvy youth generation. Moreover, growth in developments & initiatives toward digitalized payments is anticipated to provide a potential growth opportunity for the market.
The report focuses on growth prospects, restraints, and trends of the proximity payment market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the proximity payment market outlook.
By Offering
Solution segment accounted for the highest market share in 2020.
Segment Review
The proximity payment market is segmented into offering, application, and region. By offering, the market is bifurcated into solution and service. The solutions segment is further segregated into hardware and software. Applications covered in the study include grocery stores, bars & restaurants, drug stores, entertainment centers, and others. Region-wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The proximity payment market analysis includes top companies operating in the market such as ACI Worldwide, Inc., Alphabet Inc. (Google), Apple Inc., FIS, IDEMIA, Ingenico, Mastercard, PayPal Holdings Inc., Square, Inc., and Visa Inc.. These key players have adopted strategies, such as product portfolio expansion, mergers & acquisitions, agreements, regional expansion, and collaboration, to enhance their market penetration.
By Application
Grocery Stores segment accounted for the highest market share in 2020.
COVID-19 Impact Analysis
COVID-19 pandemic has a significant impact on the proximity payment industry, owing to increase in usage and adoption of online & digitalized payment methods among consumers globally. Moreover, banks and retailers are responding to COVID-19 fears by raising limits on their proximity payment transactions so that higher value payments can be made without the need to touch the terminal. This, in turn, has become one of the major growth factors for the proximity payment market during the global health crisis.
By Region
Asia-Pacific would exhibit the highest CAGR of 14.0% during 2021-2030
Top Impacting Factors
Increase in Adoption of Smartphones and Access to High-Speed Internet
Rate of adoption of smartphones in countries such as Canada, China, and India have significantly increased in past few years. In addition, proliferation of 3G and 4G connectivity has enabled customers to have hassle-free access to conduct payments on their smartphones. Moreover, 5G network is gaining traction across North America, Asia, Europe, and the Middle East, which further propels the proximity payment market growth. Furthermore, extensive growth in distribution network of smartphone companies has made smartphone devices easily available for end users. For instance, Samsung, Micromax, and Karbonn are major mobile phone brands in rural India, owing to their pan India distribution channel, thus making proximity payment market accessible for rural population via their mobile phones. Rise in use of smartphones and surge in faster connectivity have enabled retailers and customers to receive and make proximity payment via their smartphones, which propels growth of the market.
Rise in Data Breaches and Security Issues While Conducting Payments
Innovative payment technologies offer substantial advantages and convenience to customers; however, increase in data breaches and security concerns hinder growth of the market. Consumers are hesitant to make payments via proximity payment, as they are concerned about the risk of their financial information being accessed by third-party mobile service providers. Moreover, risk of identity theft and data breaches is also expected to rise in the coming years. This is attributed to use of public Wi-Fi, vulnerabilities in passwords, and phishing attacks. Furthermore, scammers replace proximity payment at merchant outlet with their codes and customers end up making payment to fraudsters instead of merchants. All these factors together lead to high risks while making proximity payment, which hampers the market growth.
Rapid Digitalization in Payments Sector
In the post-pandemic society, digital currencies, biometrics, and proximity payment are becoming more common and are widely accepted among consumers to decrease usage of cash. Furthermore, according to a recent payment tracker report of PYMNTS.com, which is a global leader for data, news and insights on innovation in payments, projected that technology is expanding to new use cases as its adoption continues to provide contactless options for restaurants, retailers, and contact tracing for COVID-19 tracking in the UK. In addition, introduction of dynamic proximity payment market allows merchants to scan codes of consumers where the system automatically detects fraud. Therefore, these number of growing developments & initiatives toward digitalized payments sector are anticipated to provide a potential growth opportunity for the market.
Key Benefits for Stakeholders
- The study provides in-depth analysis of the global proximity payment market share along with current trends and future estimations to illustrate the imminent investment pockets.
- Information about key drivers, restrains, and opportunities and their impact analysis on the global proximity payment market size are provided in the report.
- Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the proximity payment market.
- An extensive analysis of the key segments of the industry helps to understand the proximity payment market trends.
- The quantitative analysis of the global proximity payment market forecast from 2021 to 2030 is provided to determine the market potential.
Proximity Payment Market Report Highlights
| Aspects | Details |
 By OFFERING |
|
 By APPLICATION |
|
 By Region |
|
 Key Market Players | PayPal Holdings Inc, Alphabet Inc. (Google), SQUARE, INC, Visa Inc, ACI Worldwide, In, Mastercard, FIS, IDEMIA, INGENICO, APPLE INC. |
Analyst Review
Benefits associated with proximity payment technology such as increase in convenience & reduced transaction time and rise in adoption of smartphones among end users drive the market growth. With enabling data driven personalization & enhancing user experience, merchants are increasingly looking to accommodate consumer demand for secure and touch-free transactions via proximity payments. Moreover, consumers continue to use innovative payment technology and even standard credit cards in replacement of cash. In addition, several key players are enhancing & providing advanced proximity payment options and offering coupons & promotions by directing customers to a landing page or downloadable coupons, which can be used for their next purchase.
The COVID-19 outbreak has a significant impact on the proximity payment market and has accelerated the usage & adoption of POS payment terminals primarily among merchants & retailers. In addition, during the global health crisis, there’s an increased usage of proximity payment as it allows customers and employees to better keep their distance & avoid handling potentially contaminated bills or cards.
The proximity payment market is fragmented with the presence of regional vendors such as ACI Worldwide Inc., IDEMIA, and PayPal Holdings Inc. Some of the key players profiled in the proximity payment market report include Alphabet Inc., Apple Inc., FIS Global, Ingenico, Mastercard, Square, Inc., and Visa Inc. Major players operating in this market have witnessed significant adoption of strategies that include business expansion and partnership to reduce supply and demand gap. With increase in awareness & demand for proximity payment across the globe, major players are collaborating their product portfolio to provide differentiated and innovative products.
The proximity payment market is estimated to grow at a CAGR of 12.9% from 2021 to 2030.
The proximity payment market is projected to reach $46.80 billion by 2030.
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Real-time transaction processing, flexibility of payment devices, reduced transaction time, and increase in convenience.
The key players profiled in the report include ACI Worldwide, Inc., Alphabet Inc. (Google), Apple Inc., FIS, IDEMIA, and many more.
On the basis of top growing big corporations, we select top 10 players.
The Proximity payment market is segmented on the basis of offering, application, and region.
The key growth strategies of proximity payment market players include product portfolio expansion, mergers & acquisitions, agreements, regional expansion, and collaboration.
Service segment would grow at a highest CAGR of 14.7% during the forecast period.
Asia-Pacific region will dominate the market by the end of 2030.
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