Mobile contactless payment expected to swell by 24% to $2.5tn in 2021

Zainab Iwayemi

In recent years, the demand for mobile contactless payment options has been on a steep uptrend leveraging on the impetus from the pandemic in 2020. This development is expected to maintain its robust momentum through 2021 and beyond.

Research data analyzed and published by ComprarAcciones shows that the market hit a benchmark of $2 trillion in transaction value in 2020. In 2021, the value is projected to surge by almost $500 million translating to a growth rate of 107 percent in two years while the end of 2021 is expected to see the total transaction valued at $2.49 trillion, depicting 24 percent higher than the $2.01 trillion recorded in the previous year.

According to data from Statista, the market growth which was worth $755.6 billion in 2018, saw an uptick in value by 90 percent at $1.2 trillion in 2019. The remarkable growth seen in 2020 came about as a result of the rapid shift to digital payments due to the pandemic.

Expectedly, subsequent years will see the market keep up with the rising trend, growing by 40 percent between 2021 and 2023 to reach a value of $3.52 trillion. By 2025, it is expected to be worth $4.6 trillion. Average transaction value per user in the segment will grow by 25 percent from 2019 and 2021, to reach $1,670. By 2023, the amount is expected to soar by 22 percent to $2,051.

Global mobile wallet users to grow by 11% to 1.5 billion in 2021

The number of people using contactless payment option have seen tremendous growth. Statista reports that in 2019, there were 901.2 million users globally. The figure rose to 1.34 billion in 2020 and is expected to rise by 11 percent to 1.49 billion by the end of 2021. The number will keep rising, to reach 1.89 billion by 2025 though the growth rate is set to slow down slightly in coming years.

With China at the forefront, countries in Asia Pacific have been the dominant players in the mobile payments market, China’s dominance is attributable to existing market conditions that favored a growth in popularity for mobile wallets as the country records 1.6 billion registered mobile phone subscriptions in the country as of February 2021.

The United States ranks second with total transaction value estimated at $465.1 billion in 2021, about a third of China’s while the United Kingdom, whose transaction value in 2021 is projected to reach $98.5 billion took the third place.

In a bid to avoid paper money and credit/debit cards, a majority of users, majorly millennials and Gen Z started using mobile contactless payments in 2020.

The number of mobile wallet users will grow by 6.5 million per year in the period between 2021 and 2025. Out of this number, 4 million will be Gen Zers. While the millennials who currently account for 40% of mobile wallet users will shrink.

Contactless mobile payment users in 2020, accounted for a 40.1 percent share of all smartphone users. The figure is projected to increase to 43.2 percent in 2021 and keep rising in the coming years to reach 50.1 percent by 2025.