LONDON, April 7, 2020 /PRNewswire/ -- The COVID-19 pandemic is making a major impact on the global cards and payments market, driving the market's growth. The World Health Organization urged people to use contactless payments instead of cash to avoid infections from COVID-19. For instance, according to the Mobile Payments Today report, in the USA, the Port Authority of New York and New Jersey stopped accepting cash at three of the major bridges and tunnels into New York City, including the George Washington Bridge and the Lincoln and Holland Tunnel, in response to the emergency orders from New York and New Jersey related to the COVID-19 pandemic. Non-cash transactions are estimated to accelerate at an annual growth rate of 12.7% globally, with emerging markets growing at 21.6% from 2016-2021. In 2019, emerging markets, which account for about one-third of global non-cash transaction volume, are expected to contribute nearly half of the global volume in 2021, driven mainly by sustained digital innovation, and adoption of mobile payments. Therefore, increasing use of cards and payments is and will continue to drive the growth of the market.
The global cards and payments market is expected to grow from $721.9 billion in 2019 to $999.3 billion in 2023 at a compound annual growth rate (CAGR) of 8.5%.
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Increased Security In Digital Payments
Security remains an important concern in any type of digital payments, therefore, the introduction of new security features in digital payments is expected to drive the cards and payments market in the forecast period. Payment service providers and merchants have implemented various solutions including the Payment Card Industry Data Security Standard (PCI DSS) compliance, EMV technology, 3-D Secure services, tokenization, biometrics and end-to-end encryption. For example, biometric security, which involves scanning of thumbprints, retinas and faces for authentication is gaining popularity in the digital payment sector. At KFC in China, with the help of a smile, one can make payments even though he/she is not carrying their mobile phone or wallet. Facial recognition payments are considered to be a promising future payment development that will give a high degree of accuracy and an added level of security for any type of digital payments.
Increasing Adoption Of Contactless Payments
Contactless payment is the latest technology in the cards and payments market that allows individuals to make secure contactless payments via debit cards or credit cards by simply tapping at a contactless payment machine without any need of PIN or signature, which helps in spending less time at the cash counter. Contactless payment cards are as secure as any other chip card, which ensures safety from unauthorized or fraudulent transactions. Contactless cards operate when the card is within 4cm of the card reader and only one transaction can be processed at a time. In the UK, in 2019, according to the UK Finance report, contactless payments in the UK continued to grow; about 50% of all debit card payments were contactless. About half of debit card transactions and 35% of credit card transactions were done using the contactless payment method.
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Millennials' Preference For Digital Wallets
A digital payment consumer survey was conducted by McKinsey & Company, an American management consulting firm, in the USA, in 2019, regarding the adoption of digital wallets. According to the survey, more than 75% of US consumers make use of one or more types of mobile payments (online, in-store, or in-app). Out of which, 91% of them are millennials who prefer digital wallets, 80% are Generation X and 64% are baby boomers. About 50% of consumers are using in-app digital wallets, and around one-fifth of respondents use in-store usage.
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