Contactless Payments to Surpass 50% of US Smartphone Users

The Rise of Contactless Mobile Payments

The COVID-19 pandemic significantly accelerated several technological shifts, and the adoption of contactless mobile payments is a prime example. Usage experienced a substantial surge in 2020, as consumers sought safer alternatives to traditional payment methods.

Data from eMarketer indicates a 29% increase in in-store mobile payment usage within the U.S. last year. This shift was driven by a desire to avoid handling cash and credit cards at the point of sale.

Growing User Base

In 2020, approximately 92.3 million U.S. consumers aged 14 and above utilized proximity-based mobile payments at least once within a six-month period. Analysts anticipate this number will reach 101.2 million in the current year.

Forecasts from eMarketer suggest that by 2025, mobile payment usage will exceed that of over half of all smartphone users in the United States.

Demographic Trends

The largest gains in adoption were observed among younger demographics, specifically Generation Z and millennials. These groups are projected to contribute over 4 million of the 6.5 million new mobile wallet users annually between 2021 and 2025.

Millennials will continue to represent approximately 40% of the total mobile wallet user base.

Market Growth and Value

Industry reports confirm the pandemic’s impact on the mobile wallet sector. Finaria estimated a 24% growth from the previous year, reaching a total value of $2.4 trillion in 2021.

While Asian markets, particularly China, have historically led in mobile payment adoption, the U.S. has emerged as the second-largest market. Transaction volume reached $465.1 billion, and is projected to grow to $698 billion by 2023.

Retailer Adoption

The pandemic prompted retailers who had previously hesitated to embrace mobile payments to finally implement the technology. A survey conducted by the National Retail Federation and Forrester in mid-2020 revealed that 69% of retailers had increased their adoption of no-touch payment options.

Furthermore, 67% of retailers now accept some form of contactless payment, encompassing both mobile payments and contactless cards.

Increased Spending Per User

Alongside the growth in user numbers, eMarketer reports an increase in average annual spending per user. This figure is predicted to rise by 23.6%, from approximately $1,973.70 in 2020 to $2,439.68 in 2021.

It is anticipated that this spending will exceed $3,000 by 2023.

Market Leaders

Currently, Apple Pay holds the leading position in the U.S. mobile payment market, boasting 43.9 million users in 2021. It is expected to grow to 58.3 million users by 2025, outpacing its competitors.

Starbucks remains the second-largest player with 31.2 million users, while Google Pay is projected to add 10.2 million users during the same period. Samsung Pay, however, is experiencing slower growth, with an anticipated addition of only 2 million users between 2020 and 2025.