February 10, 2015
Over 2.5 million merchants accept MasterCard contactless payments across 66 countries and this number continues to grow. Research from Informa reveals that more than 90% of the total global value of transactions from mobile NFC payments, i.e. US$ 2.4 billion in 2011, was generated in the Asia Pacific region, although Europe and Canada have also significantly scaled up in terms of NFC payments. We analyzed the contactless payments situation in some countries that are driving the overall market. The scenarios in the following 10 countries shows that contactless payments are indeed making waves across multiple geographies.
Australians are favoring contactless payments day-by-day, ditching traditional payment methods. Even merchants are seeing a high demand and are rolling out specialized terminals to cope up with the trend. More than 58 million Visa PayWave payments were made in July alone last year. As per a research by RFi, 70% of the adult population now owns a NFC based credit or debit card. MasterCard has 320,000 tap-and-go-enabled cards issued in the market. According to a report by Australian bank Westpac, contactless payments via mobile will reach A$3 billion in Australia by 2015. In Australia, mobile-based contactless payments have accounted for 60% of all debit-card transactions in a 12 month period starting November 2013.
In Canada, the contactless POS market is growing at a brisk 16.4%. MasterCard’s contactless acceptance footprint has expanded to include 72 per cent of Canada’s top retailers and has enabled Canadians to tap their cards more than 330 million times to pay securely. A study conducted by Technology Strategies International revealed that more than half of the smartphones in Canada will be near field communications-enabled by 2017. In Canada, 75 percent of major retailers accept contactless payments. 10% of the domestic transactions are contactless and this is rising at the rate of 1% every month.
The Japanese have readily welcomed the notion of ‘convenience’ that contactless payment brings. Japan witnessed the first rollout of contactless wallets, based on Sony’s FeliCa, back in 2004. Japan has largest number of NFC enabled POS (>1 Million) in the world. There are more than 70 million NFC-enabled devices in Japan, according to Wireless Watch, compared with around 3 million in the U.S. In Japan, NFC itself finds wide use right from micropayments to branding of products. Speaking of terminals, over 1 million FeliCa based terminals have been installed while MasterCard has announced deployment of 400,000 PayPass based terminals over the years. 47 million Japanese have adopted tap-and-go phones in three years which is one of the fastest roll outs of the technology in the space.
Nine Polish banks have confirmed plans to commercially launch Visa Cloud-based Mobile Contactless Payments beginning early this year, re-enforcing Poland’s reputation as a hotbed for innovation in digital payment services. Poland has been extremely enthusiastic in embracing contactless payment technology and is already Visa’s largest market in Europe in terms of contactless transaction volumes. Close to 70% of Visa cards in the market have contactless functionality, with the technology accounting for more than 40% of all Visa payments in Poland. More than 75% of all in-store Point of Sale (POS) terminals support contactless payment, with plans in place for all Polish POS terminals to support the technology by the end of 2017.
In August 2013, Singaporeans hit 1 million Visa payWave transactions per month. Just for the month of July 2014, Visa processed more than 2 million Visa payWave transactions, which makes up for 21.5% of all Visa face-to-face transactions in the nation. Paying with the wave of a card over a reader is becoming more common in Singapore, with more cards rolled out and more merchants on board. Ez-link is the biggest issuer of these cards, with over 15 million issued since its launch in 2008. They are accepted at 30,000 locations now, up from 20,000 two years ago. Competitor Nets FlashPay has 3.2 million cards in circulation since its 2009 launch. The stored-value card is now accepted at 48,000 points, expected to go up to 80,000 by the end of next year.
In January 2011, research house Celent had deduced that South Korea’s mobile contactless payments market will grow at a CAGR of around 50%. Growth of the mobile contactless market in South Korea can also be attributed to the spread of mobile contactless payment processing terminals and synergies through interoperability. In May 2012, there were as many as 200,000 terminals in the country capable of accepting MasterCard PayPass and Visa payWave. In June 2013, Korea Times reported that SK Telekom’s Smart Wallet reached 10 million users. NFC maintains a spotlight in the country’s contactless payment market. In the last quarter of 2011, the three main MNOs took delivery of 5 million NFC-enabled SIMs.
Contactless payments represent a €9.5 billion opportunity in Sweden. Top Swedish mobile operators such as Telia, Tele2, Telenor and Three had launched WyWallet, a mobile payments offering that provides mobile wallet services to 97% of Swedish mobile phone users and includes support for NFC. WyWallet has almost 1.2 million users which accounts for 20% of the 6 million mobile users in the country. Swedish mobile payment specialist, Seamless, in partnership with various banks in the region, is doing a lot of innovative work. SEQR added NFC tag based payments back in April 2013, which provides users with the option of making payments through NFC enabled smartphones.
The country witnesses more than 900,000 contactless transactions per month. In December last year, 27 Taiwanese banks signed up for Gemalto’s Trusted Services Hub (TSH) in order to launch NFC payment services. The top five telecom companies in Taiwan are heavily promoting NFC enabled mobile transactions and payments. In Taiwan, the number of handsets equipped with NFC capability rose to 4.2 million units last year. For mobile NFC payments, there are over 24,000 contactless terminals in Taiwan across major stores, taxis, restaurants, malls, and movie theaters. Taiwan has a strong contactless infrastructure in place, with a long record of NFC trials.
Turkey is one of the most advanced countries in Europe in terms of contactless payments. By the end of Q2 2012, 14 out of 27 banks involved in the card issuing business had reported that they had started issuing contactless cards. More than 6 million contactless cards have already been issued. There are about 60,000 POS terminals in Turkey that have contactless readers installed. Most ATMs have also been fitted with contactless readers, whilst every branch of Starbucks now has contactless point-of-sale (POS) terminals.
In UK, the contactless POS market is growing at a rapid 26.7%. Last year, £380.8 million was spent in the UK in November itself, using contactless cards. 2015, 380 bank-owned terminals are available in the UK, where contactless cardholders can make a contactless transaction. 58 million contactless cards have been issued that make this possible. Visa Europe predicts that, with the launch of contactless journeys on Transport for London’s (TfL) travel network and the introduction of mobile contactless services, Brits will make 500 million contactless payments between now and December 2015. TfL accepts the 40 million Visa contactless cards already active in the UK. From June 2013 to 2014, growth in Visa contactless use more than doubled, reaching a total value of almost £140 million.