NFC Payment Devices Market

Market Overview

The global NFC payment devices market size was valued at USD 27,890 million in 2022 and is anticipated to reach USD 34,678 million in 2023. It is projected to reach USD 154,155 million by 2031, growing at a CAGR of 19.5% during the forecast period (2022–2030).

Near-field communication (NFC) technology is used by NFC payment gadgets to exchange data between the device and the reader. NFC payment devices offer high-security features for transferring funds from one account to another, increasing customer demand for these devices. Furthermore, NFC payment devices provide clients with several advantages, including easy payment processing with a wallet or credit card, real-time rewards point updates, and increased security for users' financial information.

The global NFC payment devices market is expected to rise due to the move from traditional payment systems to digital systems in developing countries and the growing trend of mobile commerce worldwide. Furthermore, the increased use of contactless payment systems in retail outlets, gas stations, and restaurants has a beneficial impact on market growth. However, market growth is projected to be hampered by difficulties such as battery exhaustion and the significant danger of stolen or lost wearables. The surge in demand for mobile and wearable payment devices, on the other hand, is likely to provide lucrative chances for market expansion throughout the forecast period.

Market Dynamics

Market Drivers

• The Shift from Traditional Payment System to Digital System

The digital payment system allows people to conveniently make payments through the online platform and reduce miscalculation in the money counting process, attracting more people toward the digital payment system and enhancing market growth. In addition, several smartphone users across the globe have been shifting from traditional payment systems to digital payment systems to accelerate payment transaction time. For instance, according to a report published on Finextra, 41.5% of smartphone users across the globe have shifted from traditional payment systems to digital payment systems. Therefore, the number of such developments worldwide is enhancing the market's growth.

• Growing Penetration of Contactless Payment System

Several petrol pump stations, retail stores, and restaurants are adopting NFC payment device systems to reduce the effect of coronavirus by installing several types of contactless systems, thereby driving the market's growth. Furthermore, the growing adoption of a contactless payment system among retailers due to numerous benefits, such as reducing payment transaction processing time, improving the organization's operational efficiency, and delivering hands-free transaction services to customers, propels the growth of the NFC payment devices market across the globe.

Moreover, various governments worldwide are installing digital payment systems across petrol pumps and fuel stations to enhance customer experience and reduce human errors at the fuel station, thereby propelling the market growth. In addition, governments across developing countries are implementing strict regulations for restaurants, retail stores, and other shops to install NFC-enabled contactless payment systems to provide hassle-free transaction services to their people and to reduce the spread of COVID-19, thereby driving the growth of the market.

Market Restraint

• Risk of Stolen or Loss of Card

NFC payment devices technology allows people to make payments without entering a verification pin through a debit card or credit card, which increases the risk of losing the card or getting stolen, negatively impacting the market's growth. In addition, several banks and fintech organizations have introduced new payment cards that allow people to make daily payments without entering pins, which increases the chances of various cyberattacks and theft of money, thereby hampering the growth of the market.

Market Opportunities

• Increase in Demand for Mobile and Wearable Payment Devices

The rise in demand for mobile and wearable payment devices among people due to the integration of NFC payment devices technology into the mobile and wearable devices is expected to provide a lucrative opportunity to boost the growth of the NFC payment devices market in the coming years. In addition, several wearable device manufacturers, such as Samsung, Apple, Inc., and Garmin, have been developing wearable devices with the integration of NFC technology that will help people conveniently make payments at retail stores, which provides a more significant opportunity for the market in future. Moreover, the adoption rate of mobile payments in countries such as China, Japan, and India, has significantly increased in the past few years due to the use of smartphones for daily communication. Furthermore, an increase in demand for mobile payment services among the youth is expected to provide lucrative market opportunities.

Regional Analysis

Based on regions, the global NFC payment devices market share is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

North America is the highest shareholder and is estimated to grow at a CAGR of 18.5% during the forecast period. The NFC payment devices market is growing faster in North America, owing to increased spending on advanced technologies and developed network architecture in the region. In addition, the rise in adoption of NFC payment devices and contactless payments systems by various retailers and manufacturers in the US and Canada to improve customer experience and provide a secure, safe, and faster transaction method drive the market's growth. Furthermore, the rise in the adoption of contactless payment technology by various customers for doing small value transactions is boosting the development of the market.

Asia-Pacific is the second-largest and fastest-growing region. It is projected to grow at a CAGR of 21.2% by 2031. This is attributed to the increase in the use of digital payment technology across Malaysia, Taiwan, Hong Kong, and India. Furthermore, a rise in awareness among the general public about the benefits of mobile payment technology and an increase in security of mobile payment technology due to the integration of NFC technology are some of the critical factors which boost the adoption of NFC payment devices in Asia-Pacific. Additionally, developing countries in Asia-Pacific, such as India, China, Singapore, and Australia, are focusing more on adopting NFC payment devices, owing to the surge in population and the need for fast and automated payment systems and, in turn, increasing the need to accelerate payment processing time and provide better customer relationship management fuels the market's growth.

Europe is the third-largest region. This is attributed to an increase in demand for NFC devices in countries such as the UK, Germany, France, Spain, Russia, and the Netherlands, as well as a surge in internet usage across the region. In addition, the rise in awareness among end-users about the benefits of NFC payment devices instead of traditional payment systems in European countries is driving the market's growth.

Segmental Analysis

The global NFC payment devices market share is segmented into device type, application, and region.

On the Basis of Device Type

Based on device type, the global NFC payment devices market is divided into Smartwatches, Fitness Trackers, Payment Wristbands, Smart Rings, and Others.

Smartwatches are the highest contributor to the market and are estimated to grow at a CAGR of 19% during the forecast period. Factors like an increase in demand for wireless fitness & sports devices, a surge in health awareness among users, and technological advancements in smartwatches by market players, are expected to drive the market's growth. However, the high initial cost of the device and problems related to power consumption & low battery life limit the market growth. An increase in emphasis on connected devices among various industries and a surge in demand for related ecosystems are also expected to offer lucrative opportunities for the market. Furthermore, monitoring and measuring physical activities, sensing the environment, real-time data collection and communication are some of the major features driving the market.

Smart Ring is the fastest-growing segment. It is mainly used for tracking and monitoring heart rate and sleep and facilitating contact-less payment globally. NFC-enabled rings perform contactless payment operations eliminating the requirement to carry debit/credit cards for the transaction. Simultaneously, the information-sharing function includes receiving calls, emails, text messages, and other notification alerts. Monitoring healthcare issues is emerging as another critical application due to the ability of smart rings to track various fitness and health-related topics such as monitoring physical activities, blood pressure levels, sleep time, walk count, heartbeat count, and pulse rates. Furthermore, the ring offers other functions, such as controlling the audio and brightness of connected smart devices, taking pictures, and playing music. An increase in the adoption of cloud-enabled rings among end-users across the globe is also anticipated to provide a lucrative opportunity for the market.

Fitness Trackers are the second-largest segment. The rising incidence of chronic diseases and the growing awareness about fitness among youth drive the market growth. The demand for fitness trackers is also driven by the adoption of advanced technologies, such as IoT and machine learning, and the economic growth of developing economies of Southeast Asia, Asia-Pacific, and the Middle East and Africa. Furthermore, various health issues, such as cancer, blood pressure, and obesity, in developed nations of North America boost the market growth. Additionally, fitness trackers help end-users track their fitness parameters and analyze and record their activities, calories burned, and heart rate. Therefore, these factors together augment the growth of the global market.

On the Basis of Application

Based on application, the global NFC payment devices market is fragmented into Grocery Stores, Bars & Restaurants, Drug Stores, Entertainment Centers, and Others.

Grocery Stores account for the highest market share and are estimated to grow at a CAGR of 17.9% during the forecast period. The rise in adoption of contactless payment services by various retailers and grocery store owners for improving the transaction's speed and attracting a large customer base drives the market's growth. The retail industry is also adopting the NFC payment devices method due to an increase in the number of customers willing to shift from traditional banking methods to contactless banking methods as they provide easy and convenient access to banking services. In addition, the increase in internet penetration of advanced technology, such as host card emulation technology, QR code, barcode, NFC technology, and machine learning, in grocery stores globally contributes to the growth of the NFC payment devices market in this segment.

Entertainment Centers are the fastest-growing segment. The rise in the adoption of wearable payment technologies, such as NFC and RFID, across the sports and entertainment industries drive the market. Customers have started to book movies and tickets through their smartphones to avoid standing in queues at the stadium or theaters, enhancing the market's growth. Furthermore, sports organizations across the globe have adopted contactless payment options to reduce significant problems for owners, including counting tickets, pricing & change requirement, reconciliation, transaction times, improving security, and reducing potential theft. In addition, the increase in the use of digital payment technology for entertainment services encourages customers to make movie payments through their mobile wallets and offers rewards to customers for booking movie tickets through credit cards are some of the essential factors in boosting the NFC payment devices market in this segment.

Drug Stores are partnering with IT companies to install QR codes and barcodes while increasing the adoption of contactless payments, thereby driving the market growth. Furthermore, contactless payments help drug store owners to eliminate the need to manage bills and improve the safety of their store workers. In addition, various governments across the globe are collaborating with different healthcare sectors to boost the adoption of smart cards and contactless payments in healthcare and drug stores to speed up the transaction process, propelling the market's growth.

Recent Developments

• June 2022 - Apple revealed new tools, technologies, and APIs to assist developers in creating even richer user experiences. Widgets on the Lock Screen allow developers to present essential information from their apps fresh, while new APIs across Apple's platforms enable them to create more distinctive features.
• April 2022 - Nymi, a connected worker platform provider, has been acquired by Innominds. Nymi will become a wholly-owned autonomous subsidiary of Innominds, with its headquarters in Toronto. With deployments in 15 countries, Nymi serves some of the world's largest corporations, including nine of the top ten global pharmaceutical manufacturers and leading life sciences, healthcare, manufacturing, and financial services firms.