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The number of consumers using at least one of the major third-party mobile-payment services—Apple Pay, Android Pay, or Samsung Pay—will top 150 million globally by the of 2017, says Juniper Research, a U.K.-based firm, in its “Is OEM-Pay the Future of Contactless” report. Some 50 million of them will begin using one of the services in the second half of the year.
In the United States, Apple Pay, which relies on near-field communication technology to link to the point of sale, has become a primary seeder of contactless transactions, Juniper says. An effort that began 10 years ago to introduce contactless payments using dual-interface cards reliant on magnetic-stripe data ultimately yielded a U.S. merchant-acceptance rate of less than 2% by 2011, Juniper says.
Though U.S. issuers provided millions of dual-interface cards then, usage and acceptance rates were low.
“However, as of December 2016, Juniper estimates that only 8% of total payment cards in circulation in the U.S. were contactless-enabled; this translates into just under 100 million cards,” the report states. “It is unsurprising that contactless-payment adoption is being seeded by Apple Pay in this market.”
Apple Pay, and Android Pay and Samsung Pay, use near-field communication technology to connect with payment terminals, a technology not as widespread 10 years ago. One research firm projected a total of 9.2 million NFC-enabled point-of-sale terminals in the United States and Canada by the end of 2016.
Juniper says the number of contactless payment cards issued globally totaled 1.68 billion in 2016, but just 55% of them were actively used for payments that year.
