Spectacular growth in the volume and value of contactless payments across the European Union during 2014 has set the scene for a mass-market breakthrough over the coming years as resolutions by Visa and MasterCard accelerate the roll out of new cards and terminals across the region.
According to data from research house RBR there were 223 million contactless cards in issue in Europe at the end of 2014, up 65% compared to 2013, and representing 15% of all payment cards. Consumer adoption of the technology is also on the rise, with 1.4 billion contactless payments worth €15 billion made in Europe in 2014, rises of 155% and 190% respectively compared to 2013.
These are staggering increases, but contactless transactions still represent just 2% of the overall volume of card payments in the region and 0.5% of their value. RBR forecasts the number of contactless cards in issue to treble between 2014 and 2020 to just short of 700 million cards, representing more than 40% of the total regional card base.
Similar increases can be expected in the intalled terminal base. There were 2.5 million contactless-enabled terminals in Europe at the end of 2014, representing 16% of all Eftpos terminals in the region. MasterCard and Visa have both mandated that new terminals should be capable of accepting contactless transactions by the beginning of 2016 and all existing terminals should be converted by the beginning of 2020.
As a result, the level of contactless acceptance is set to soar for the rest of this decade, with RBR forecasting a nine-fold rise in the volume of payments to 12.2 billion in 2020, by which point they will account for 13% of all card transactions.
"At some stage there will be a tipping point, after which the movement to contactless will be extremely quick," says RBR. "That point has not quite been reached, but it is becoming closer all the time."