European surge in contactless payments opens the door to mobile

European surge in contactless payments opens the door to mobile

MasterCard is betting that a surge in the use of contactless cards across Europe will act as a gateway for the mass adoption of mobile phone payments.

In the last quarter of 2014, says MasterCard, contactless transactions in Europe grew by 174% year on year as consumers increased their usage by more than 20%.

Says the card scheme: "With acceptance at over three million contactless-enabled retailer locations globally, representing a 56% year-over-year increase, it’s also more convenient than ever for everyone to use their contactless card, mobile or other device for purchases."

In the Czech Republic, 52% of MasterCard and Maestro in-store transactions are now contactless, with similar growth trends being seen in Poland (33%), in Hungary (18%) and in Slovakia (17%).

The Netherlands was the quickest growing contactless country in Europe during the quarter, reaching one million transactions per month, eight times more than in the second quarter of the same year.

According to data published by The UK Cards Association, spending on contactless cards in the UK has more than trebled over the last year to reach a record £2.32 billion in 2014.

In 2014, MasterCard published its specification for the use of Host Card Emulation in the provision of carrier-free NFC transactions at the point-of-sale.

“Our vision for digital payments is to create great payment experiences for everyone across all channels and all devices," says Javier Perez, president MasterCard Europe. "HCE provides another deployment option for issuers to launch NFC wallets."

Across Europe, he says, 22 countries are live with more than 70 mobile NFC projects, with contactless card uptake providing a fast-track model for consumer adoption of mobile payments.

The projections are backed up by a new research report from Swedish analyst house Berg Insight, which recorded 9.5 million annual shipments of NFC-ready POS terminals in 2014. On a global basis, two out of every five POS terminals that shipped in 2014 included NFC.

The firm forecasts that more than 70% of the world’s POS terminals will be NFC-ready in 2019, up from 28% in 2014.

Furthermore, merchants are beginning to activate the contactless capability of the new terminal base in increasing numbers. Berg Insight estimates that approximately 9 million POS terminals accepted contactless payments with Visa payWave, MasterCard PayPass or UnionPay Quickpass at the end of 2014. This is a major increase from 2012 when just 2.6 million POS terminals worldwide had the contactless features enabled.

“The sharp increase marks yet another milestone in the industry’s move towards contactless payments and mobile wallet services”, says Lars Kurkinen, senior analyst at Berg Insight. “The data shows that merchants have started to embrace NFC, which up until now has been a missing piece in the puzzle."

Comments: (1)

Paul Love
Paul Love - Konsentus - Nottingham 18 February, 2015, 17:12Be the first to give this comment the thumbs up 0 likes

There is more to mobile payments than NFC ! 

This is a great story of increasingly widescale adoption of contactless payments. Most of these payments will be by cheap and cheerful contactless cards, but many people are now hoping that the small (but growing) number of phones equipped with NFC will be used in place of such cards. 

A mobile phone can bring much more value to a payment than simply emulating a contactless card!