A report from Juniper Research has indicated a major boost in valuation for global contactless payments in 2021.
The pandemic has caused a huge rise in digital payments, which have increased by almost 50% in 2021 compared to 2020.
Juniper has valued global contactless payments this year at a staggering $2.5 trillion, a massive increase from the $1.7 trillion valuations last year.
Card payments hold the “majority share” of overall contactless transaction values, at 79% in 2021, according to Juniper.
“The pandemic has significantly accelerated an existing contactless card usage trend, and these value increases will be sustained beyond 2021 and into the future,” the research firm said
Data from Juniper’s Contactless Payments: Trends, Opportunities and Market Forecasts 2021-2026 report showed that a combination of a boost in card issuance and increased usage during the pandemic, alongside a series of global transaction limit increases, have unlocked “significant growth potential” for contactless payments, “fundamentally changing” how products are purchased.
Juniper identified that market growth has already been ‘catalysed’ by increased contactless card use in markets that have previously been underdeveloped, such as the US and Germany, and that this shift “will be permanent”.
Commenting on the Juniper research, author Susannah Hampton said: “Markets such as Germany have seen an unprecedented shift towards contactless cards in the past 18 months.
“This shift has severely diminished the role of cash and created significant opportunities for card issuers to gain market share.”
The US will see transaction value growth of 136% between 2020 and 2021, with major US retailers rolling out contactless acceptance and consumers enjoying the added convenience offered by touch-free card payments.
Additionally, the US is anticipated to see further growth of almost 300% over the next five years.
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Britain’s fintech sector also saw “record-breaking” investments over the Covid-19 period, with analysis from Innovate Finance showing that £4.1bn has already flowed into the sector in the first half of this year, marking a 34% increase on the total amount in 2020.
Analysis revealed that the UK ranks second only to the US in terms of funds raised, and well ahead of the levels secured by Brazil ($3bn), Germany ($2.5bn) and India ($2.2bn) during the same period.
Previous research by Juniper earlier in July found that around 53% of the world’s population could be digital banking by 2026 after increased digital transformation boosted banks to continue functioning effectively during the pandemic.
Currently, digital banking services reach around 2.5 billion people worldwide. According to the research, however, this could be boosted to 4.2 billion within the next five years.
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