India to witness ten-fold rise in cashless transactions by 2020

With technology aiding the growth of retail industry, the global contactless transactions at Point of Sale (POS) through cards, mobiles and wearables will hit an all time high of $500 billion by 2017, and India whose cashless transactions currently valued at $50 billion will see a ten-fold increase by 2020, according to research reports.

Data obtained from Juniper Research has found that due to surge in contactless-enabled POS terminals across the globe which is aimed at giving customers improved shopping experience and easy check-outs, cashless transactions, which is currently at $321 billion, will surge to reach $500 billion next year.

Technology implementation has gone up globally and many card companies have obliged retailers’ demands by make POS terminals contactless-ready, said Juniper.

For example, financial services provider Visa has introduced 3.2 million terminals in Europe till April this year, which is 23 per cent more than 2.6 million terminals installed at the end of 2015, the report said.

In India, a recent report by Google India and Boston Consulting Group have predicted that by 2020, close to $500 billion worth transactions will happen electronically through e-wallets and other digital mode of payment systems, which is ten-fold increase from the present level. The driving force to wide-spread digital payment acceptance is due to sharp increase in the use of smart phones with internet connection and increase in demand for comfortable, easy and fast shopping, said the report.

The report titled “POS Terminals: Market Strategies and Segment Forecasts 2016-2021”, further said that while many countries still remain clueless about contactless payment system, several developing and developed nations are overwhelmingly using contactless payment terminals across all payment platforms.

The Juniper report has predicted that by 2020, two in every three POS terminals will be contactless enabled POS terminals paving the way for huge demand for such terminals and abundant opportunity for payment device manufacturers.

Contactless cards, the report said, will rule the major markets, and will represent one in every two payment cards issued by 2021, and smart phone and mobile-POS will witness 20 per cent of total retail POS transaction value. However, Juniper warned that despite the overwhelming growth of contactless payment market, the growth will be limited in some growing markets.

Nitin Bhas, the research author said, “This is primarily due to the less supply of POS contactless enabled POS terminals, and also that some potential markets like India and Germany are likely to remain cash-centric for few more years.”

Bhas predicts that Germany will remain cash-centric economy with around 57 per cent of in store transactions happening through cash, while in India still more than 90 per cent of retail transactions are happening through cash.

Written for JusTransact.com