Contactless payments set to soar across Europe

Contactless payments set to soar across Europe

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."

Comments: (5)

A Finextra member
A Finextra member 09 December, 2015, 10:581 like 1 like

With Visa and MC mandating that ALL terminals in Europe are cEMV-capable by 2020, and with every major OEMs including cEMV capability into most smartphone and wearables models, the tipping point HAS been reached.

By 2020, more people in the world will have access to contactless interface than to running water or a toothbrush!

Richard Sanders
Richard Sanders - Hermosa Consulting - Southend on Sea 09 December, 2015, 15:57Be the first to give this comment the thumbs up 0 likes

Given the UK's slow move to contactless acceptance from the initial London trial it is clear that learnings have been made, especially in the role transit can play.

The higher limits for contactless are also a factor as these were and inhibitor initially

Robin Setty
Robin Setty - ACI Worldwide (EMEA) Limited - Watford 10 December, 2015, 11:211 like 1 like

I think the increased adoption for something as simple to use as contactless can also be kind of 'viral'.  Seeing someone buy their sandwich so quickly, without the need enter a PIN or receive change ought to trigger a thought of, "Oh...I wonder if my card will allow me to do that? Maybe I'll try?"

My non-scientific strawpoll (i.e. just observing people) suggests to me that the tipping point has now been reached.  And of course, Apple's involvement has presumably helped.

Geoffrey Barraclough
Geoffrey Barraclough - Barraclough and Co - London 10 December, 2015, 14:45Be the first to give this comment the thumbs up 0 likes

Only 15% of payment cards are contactless enabled? No wonder this technology has taken so long to reach critical mass. It's a shame that Visa/Mastercard can't enforce mandates on their issuers as easily as on their merchants.

Paul Love
Paul Love - Konsentus - Nottingham 18 December, 2015, 12:35Be the first to give this comment the thumbs up 0 likes

Despite all the promise, we still see a wide regional variation of the use of contactless even within the UK, and specifically this seems to be directly proportional to the distance from London.

In our survey last year, we found that over 70% of UK consumers still do not have a contactless card.

This madness continues. As recently as September my son was issued with a new “Student Account ” debit card that was not contactless enabled.

The very same bank are spending millions on advertising Apple Pay, which at the very best will only be usable by a small percentage of their customers.

Until banks get serious about universally issuing contactless enabled cards, then the job is only half done.