Contactless payments have rapidly grown in the United States, evolving from a niche technology to a mainstream payment method. As consumers increasingly prioritize convenience and security, the adoption of contactless payments has surged, making it a big player in the payments industry.
Here’s a snapshot of some of the key market statistics for contactless payments:
- Contactless payments market share in 2023: 25% of all card transactions
- Number of contactless transactions in 2023: 17.9 billion
- Contactless-enabled cards in circulation in 2023: 300 million
- Merchant adoption of contactless payments by 2023: 85% of merchants
- Consumer adoption rate in 2023: 63% have used contactless payments; 44% use it regularly
The Origins of Contactless Payments in the U.S.
Contactless payment technology was first introduced in the United States in the early 2000s. However, its widespread adoption did not begin until around 2014.
The introduction of Apple Pay in 2014 marked a pivotal moment, as it brought significant attention to contactless payments, leveraging near-field communication (NFC) technology to allow users to make payments with a simple tap of their smartphones. Other major players, including Google Pay and Samsung Pay, soon followed, further driving the adoption of contactless technology.
Market Share and Growth
The contactless payments market in the United States has seen exponential growth over the past decade. As of 2023, contactless payments accounted for approximately 25% of all card transactions in the U.S., a dramatic increase from just 3% in 2017.
The growth trajectory has been steep, particularly following the COVID-19 pandemic, which significantly accelerated the adoption of contactless payments as consumers and businesses sought safer, touch-free payment methods.
In terms of the number of transactions, contactless payments reached an estimated 17.9 billion transactions in 2023, up from 4.7 billion in 2019. This growth reflects both an increase in the number of contactless-enabled cards in circulation and a broader acceptance by merchants. According to Visa, the number of contactless cards in the U.S. exceeded 300 million by the end of 2023, up from 120 million in 2019.
Number of Contactless Payments by Year in USA
- 2018: Around 2.9 billion contactless transactions.
- 2019: Approximately 4.7 billion contactless transactions.
- 2020: The COVID-19 pandemic significantly accelerated the adoption of contactless payments, leading to about 8.1 billion transactions.
- 2021: Contactless transactions had 11.1 billion transactions.
- 2022: The number increased to 14.4 billion transactions.
- 2023: Continued growth pushed the number of contactless transactions to 17.9 billion.
Consumer Adoption and Preferences
Consumer adoption of contactless payments in the U.S. has been fueled by a combination of factors, including the growing availability of contactless-enabled cards and mobile phones, and the increasing number of merchants accepting contactless payments.
A 2023 survey by Mastercard revealed that 63% of Americans had used contactless payments within the past year, with 44% using it regularly. The convenience, speed, and perceived security of contactless payments are among the top reasons cited by consumers for their preference.
In addition, contactless payments have gained significant traction in urban areas and among younger consumers. Millennials and Gen Z, in particular, have embraced contactless payments at a higher rate, with nearly 70% of consumers aged 18-34 reporting regular use.
Merchant Adoption and Infrastructure
The adoption of contactless payments by U.S. merchants has also seen substantial growth. As of 2023, over 85% of merchants had contactless payment capabilities, compared to just 40% in 2018.
This increase is largely due to the push from major payment networks like Visa and Mastercard, which have encouraged merchants to upgrade their point-of-sale (POS) systems to accept contactless payments.
Retail, quick-service restaurants, and transportation are among the sectors where contactless payments have become particularly prevalent. For instance, in public transportation systems across major U.S. cities, contactless payments have become the standard, allowing commuters to pay with a tap of their card or smartphone.
Transaction Value Limits for Contactless Payments in the USA
In the U.S., there is no fixed national limit for contactless payments, allowing most transactions of any amount to be made using contactless methods. However, for larger transactions, typically above $100, merchants or card issuers may require verification through a signature or PIN, depending on their policies.
Mobile wallet payments like Apple Pay and Google Pay generally have no limits in the USA, as they use biometric authentication, making them more secure. While many other countries have strict contactless limits, the U.S. offers more flexibility, with limits varying by merchant and payment method.
The USA differs from Canada which has limits on contactless payments. The typical limit for contactless payments without requiring additional verification (such as a PIN) is CAD $250. This limit applies to most contactless cards and mobile wallets like Apple Pay and Google Pay.
The Future of Contactless Payments
Looking ahead, the contactless payment market in the United States is set for continued growth. It is projected that by 2026, contactless payments will account for nearly 40% of all card transactions in the country. The integration of contactless payments with emerging technologies such as wearable devices and the Internet of Things (IoT) is expected to further enhance its appeal and convenience.
Furthermore, the ongoing advancements in payment security, such as tokenization and biometric authentication, are likely to bolster consumer confidence in contactless payments, driving even greater adoption.
