Spending on contactless payments hardware and software will reach $870 million by 2011, up from just $260 million in 2006, a compound annual growth rate of 27%, according to a US study by New York-based ABI Research.
The research shows that currently transportation ticketing represents the majority of contactless payment adoption around the world, but this will be overtaken by use of the technology for low-vlaue payments within the next few years.
But Jonathan Collins, senior analyst at ABI Research, says uptake of the technology is taking place in a fragmented manner across regions, and national markets, as contactless payments are gradually added to existing financial transaction networks
Collins says in North America open system payments are driving the contactless adoption, while in Europe contactless ticketing systems are spurring interest from payments professionals.
But Collins says it is in Japan and South Korea that contactless technology is making the greatest headway: "Built on the foundations of contactless transportation ticketing and with the additional boost from contactless payment-enabled mobile handsets, these markets are leading the way in realising the potential for contactless payments."
ABI says ongoing debate over how payment applications will be deployed and managed on wireless handsets has delayed the rollout of mobile contactless payments in the US and Europe.