BENGALURU: Contactless payments are likely to be the default payment method in the future, as the percentage of contactless transactions in total face-to-face transactions grew over 6x to 16% in December 2021 from less than 2.5% in December 2018.
According to a new report by Visa and payments processor Worldline India, during peak Covid-19 times, contactless transactions grew by 28.5% in March 2021 compared to March 2020. Contactless payments do not require cards and transactions can be initiated using Near-Field Communication (NFC) technology, allowing contactless debit or credit credentials to communicate with NFC-enabled terminals at close range. The report said that EMV chip card adoption has been pivotal for the growth of contactless payments in many developed and developing countries.
The global contactless payment market size is expected to reach $6.25 trillion by 2028, according to Research and Markets. By December 2021, contactless transactions were up 35% than in January 2020 for credit cards. Quick Service Restaurants (QSRs), other restaurants, food & grocery, and drug stores & pharmacies are seeing the highest contactless transactions.
According to Worldline, while 25% of all transactions at supermarkets were contactless in January 2020, these transactions rose to 31% by January 2022. Delhi-NCR, Karnataka, Gujarat and Telangana saw the highest proportion of contactless transactions, across both debit and credit cards in 2020 and 2021. Also, the report adds that since the RBI caps the maximum number of daily contactless transactions at 5, the exposure to fraud is limited, in case the physical card is lost or stolen.