It’s what some may consider a bold forecast for contactless payments in the United States, but Juniper Research is predicting that, by 2022, 34% of electronic payments will be contactless, up from less than 2% in 2017.
United Kingdom-based Juniper released its forecast Monday in a report called “POS and mPOS Terminals: Our Vision for 2022.”
This tremendous growth assumes banks and credit unions increasingly offer contactless cards, Juniper says. It predicts that these types of cards will overtake smart phone-based payments services, such as Apple Pay, Samsung Pay, and Android Pay, by 2022.
“Although the overwhelming majority of these [contactless transactions] are currently conducted in the [United States] via smart phones, we strongly believe that the evidence from elsewhere suggests that both merchants and consumers welcome the increased speed and convenience offered by contactless, resulting in rapid migration to that technology,” the report noted.
It adds that issuers will embrace contactless cards—sometimes known as dual-interface because they have contact chip in addition to an antenna for contactless payments—rather than relying solely on a digital-wallet approach because of the growth in the number of U.S. contactless point-of-sale terminals.
By2022, 53% of global POS transactions will be contactless, Juniper says, in comparison to 15% in 2017. The number of contactless transactions will increase to almost 170 billion in five years, for an average annual increase of 38%.
The growth is aligned with mandates that Visa Inc. and Mastercard Inc. previously announced for some markets. Mastercard, for example, announced in 2014 that contactless acceptance would be standard in European point-of-sale terminals by 2020.
Juniper expects that by 2022, some of the locations, such as Brazil, Japan, South Korea, and much of Western Europe, will have 100% contactless acceptance.
In the United States, however, with no such mandate, the pace of merchant adoptionis more indiscriminate. Most EMV POS terminals installed in the past few years have contactless capability, but have not need activated for it. But not all merchants even have EMV POS terminals. Juniper says only 44% of U.S. stores that accept Visa cards accepted chip transactions.
Some merchants, especially smaller ones, may not upgrade because their fraud costs are low or they may be reluctant to pay for an EMV certification and a contactless certification, Juniper says.
In other findings, Juniper says there are approximately 89 million POS terminals in use globally.