HOW OEM-PAY IS

DISRUPTING THE
CONTACTLESS PAYMENTS
LANDSCAPE
Whitepaper

www.juniperresearch.com
HOW OEM-PAY IS DISRUPTING THE CONTACTLESS PAYMENTS LANDSCAPE
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is some pushback, with New Jersey and Philadelphia banning cashless

1.1 Introduction
Contactless cards have now been used in many markets for several
years and the infrastructure has become relatively well-established. It has
typically been at the vanguard of contactless payments as a whole,
although in markets like the US and China other methods have taken off
first. This is largely because actors other than banks and card providers
have been the prime movers in these spaces. Elsewhere, the financial
sector has led on contactless payments, and thus cards have
predominated.
This report will explore the current market status of contactless card
adoption as well as an overview of contactless card technologies and the
current status of OEM-Pay and wearable payment devices and NFC
ticketing.
stores. New York has also now voted to ban them, which is a significant
development. This is in stark contrast to countries like Sweden and
Australia, which are openly embracing the possibility of a cashless
society.
1.2.2 Payment Cards Market Overview
The growth of cards supplied by the main networks slowed in 2018 (see
figure 1 below). UnionPay and JCB both grew in 2017 due to those
networks’ focus on expansion beyond their home markets throughout the
year. These slowed in 2018 thanks to a slower rate of acceptance after
the initial partnerships. UnionPay has also shifted much of its growth to
non-card-based payment mechanisms. This, accompanied by the
opening of the Chinese domestic market to competition in 2015, means
that its dominance in its home market will also be gradually affected.

1.2 Contactless Cards: Market Status 2018-2019

1.2.1 Global Adoption

Contactless payment has reached high levels of adoption across the

globe. Visa claims that more than 40% of non-US card present
transactions through its network are contactless; over 100 million
contactless cards were to be issued in the US by the end of 2019.
However, only around 60% of merchant locations in the US are able to
accept contactless payments.

Given the transaction limit of contactless cards, they are most likely to
displace cash, in addition to lower-value card payments. However, there
HOW OEM-PAY IS DISRUPTING THE CONTACTLESS PAYMENTS LANDSCAPE
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Figure 1: Growth Rates of Selected Payment Card Issuers, with US banks starting to offer contactless card services.
2016-2018 (% change in number of users y-o-y)
For their part, Apple is the first OEM that has released a credit card,
100%
which was first issued in the US in August 2019. The card itself is not
contactless but is intended to provide Apple with more services revenue.
80%

60% 1.2.3 Contactless Card Technologies

40% EMV payments, typically seen as precursor to contactless card adoption,

have been steadily rising in most markets, although their growth rates are
20% not large, as most contactless cards are now the result of natural card
replacement in many markets, rather than initiatives to promote the
0% technology.
2016 2017 2018
-20% Japan continues to use FeliCa technology, in contrast to most other
countries, but American Express and Mastercard have begun offering
-40%
dual technology cards that provide both NFC-based and FeliCa
UnionPay Visa Mastercard
technology. Visa’s products, however, are FeliCa only at this point. We
RuPay American Express JCB believe that the ability to provide NFC payments will accelerate rapidly in
the coming year as Japan prepares for an influx of foreign visitors during
Source: Juniper Research the 2020 Olympics. However, this will mostly be confined to the Tokyo
area, as the majority of the Olympic facilities will be confined to the
India’s RuPay has had the highest level of growth throughout the last few metropolitan area. This will likely become an expectation for customers of
years, potentially thanks to support from the Indian government. several banks in the near future. Many territories have banks which issue
However, even this has fallen as the company’s rate of taking share from contactless cards unless the user specifies otherwise.
others declines and it has to rely on organic growth of cards in general.

Most of these providers have enabled contactless payments in their

networks for some time now, with banks, particularly in the US, being the
primary limiter. This has left the market to OEMs offering
smartphone-based contactless payments. This began to change in 2018,
HOW OEM-PAY IS DISRUPTING THE CONTACTLESS PAYMENTS LANDSCAPE
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Figure 2: EMV Adoption Rates, as a Proportion of Cards in i. Biometric Cards

Circulation (%) 2014-2018
An increase in the payment spend limits on contactless transactions in
100% future years is likely to come, as several companies are producing
fingerprint-scanning cards, replacing PIN entry with fingerprint
80%
authentication, which can enable limit-free contactless spend. Some POS
60% providers have already relaxed the spend limits for Apple Pay and similar
biometrically-verified mobile payment methods and this will ultimately
40%
happen for biometric cards as well. However, this is likely to take some
20% years to become a reality.

0% The addition of an extra level of Multi Factor Authentication increases the

2014 2015 2016 2017 2018 security of contactless transactions where biometric cards with fingerprint
Africa & Middle East technology are used. The biometric data is with the card, eliminating the
Asia Pacific scalability of hacking and fingerprint breaches while enhancing
Canada, Latin America, and the Carribean authentication security for both card-present and card-not-present fraud.
Europe Zone 1
Such cards will also not require upgrades for existing POS terminals and
Europe Zone 2
will offer the assurance of additional security when making payments.
United States
Fingerprint cards will integrate with the new European SCA (Strong
Customer Authentication) requirements for all transactions, part of PSD2
Source: EMVCo
(second Payment Services Directive) aimed at reducing fraud for
Contactless payments have also grown in emerging and developing electronic payments.
markets. In July 2019, American Express launched contactless cards in a) Juniper Research’s View
the Middle East, with plans to roll out across all MENA markets. In the
same month, China-based Union Pay announced an issuance Although the technology is present, it is still at a pilot stage and payment
partnership with ACLEDA Bank, the largest card issuer in Cambodia. The network processes need to be in place for fingerprint cards to gain
partnership will launch contactless debit cards with the Travel Mate.Asia traction. The main limiting factors will be the increase in cost of
Program. The programme is designed to offer preferential services to manufacturing the card and consumer unfamiliarity with the technology.
residents and visitors in Asia. However, many consumers are now familiar with fingerprint
authentication as a result of its use on smartphones and a recent
HOW OEM-PAY IS DISRUPTING THE CONTACTLESS PAYMENTS LANDSCAPE
Zwipe/IDEMIA partnership is aimed specifically at reducing the costs of
bringing biometric payment cards to market.
1.3 Mobile Wallets
The mobile wallet space has had significant activity in recent years and
vast exansion into new markets. OEM-Pay has presented a challenge to
FIs (Financial Institutions), forcing them to act to be competitive, so some
financial provider solutions have fallen by the wayside. Given that the
payment capability of a bank impacts consumer decisions relating to its
other products, the success of mobile wallets in the payment space is
significant. J.P. Morgan Chase has said that it plans to shelve its Chase
Pay mobile payment app in 2020 and instead focus on enabling
payments through Chase Pay online and direct via merchant apps.
However, the results of a 2018 survey from PULSE indicate that although
cardholder enrolment in mobile wallets has increased, mobile wallet
transactions were only 0.6% of in-store debit volume. This has been
attributed to consumer concerns over the security of mobile wallets,
confusion about how mobile payments work and such payments not
being accepted by retailers.
Growth in mobile wallets has been strongest in Europe and North
America, as the regions with the most availability. In Asia Pacific, the big
three providers: Apple Pay, Google Pay and Samsung Pay face
competition from QR payment providers such as WeChat Pay and Alipay,
who both currently have more than 1 billion users each. QR payments are
strongly established in this region and consequently NFC payments
require a different approach to market.
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1.3.1 OEM-Pay
The four main players in the OEM-Pay space are outlined below:
 Apple Pay was first introduced in the US in 2014 and now leads the
way in terms of global availibility, with presence in 35 markets. Apple
Pay’s presence is growing, with recent news of support from banks in
Australia and Germany.
 Google Pay was launched in 2015 and holds a considerable advantage
with a large potential Android-installed customer base. Google Pay can
now be used for in-store payments in 29 markets and holds a strong
position in India,
 Samsung Pay was also launched in 2015 and is now supported in 26
countries globally. In May 2019, Samsung announced that its
accumulated transaction volumes in South Korea had reached
$33.7 billion (₩40 trillion), with around 14 million subscribers in the
country.
 In July 2019, two years after its launch in South Korea, LG Pay
launched in the US.
1.4 Wearables – Market Status
The number of payment-capable wearable devices actually making
contactless payments has grown from around 8% in 2015 to 21% in
2019.
HOW OEM-PAY IS DISRUPTING THE CONTACTLESS PAYMENTS LANDSCAPE
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Figure 3: Wearable Device: Market Overview (m) 2015-2018 Figure 4: Global Number of Contactless (NFC & FeliCa) Capable
Mobile Handsets (bn), 2016-2019
120.0

100.0

80.0

60.0

40.0

20.0

0.0
2015 2016 2017 2018 2019

Wearable Devices Capable of Making Contactless Payments (m)

Number of Wearable Devices Making Contactless Payments (m)

Source: Juniper Research

Source: Juniper Research

Contactless card and NFC payments for ticketing have been supported
by some countries faster than others. Japan and Korea have been using
1.5 NFC Ticketing FeliCa technology for some years and markets, such as the US, are only
NFC ticketing is seeing increasing global deployment, with the main now growing strongly in the contactless ticketing space.
drivers being the rollout of contactless payments by transit operators and
the increased availability of contactless enabled devices. A key driver of
contactless ticketing is the increasing support of mobile payment
providers such as Apple Pay, Google Pay and Samsung Pay for transit
payments and the increased availability of contactless-capable devices.
HOW OEM-PAY IS DISRUPTING THE CONTACTLESS PAYMENTS LANDSCAPE
1.6 Contactless Payments: Movers & Shakers 2019
Terrie Smith
DIGISEQ
Founder and CEO
Terrie Smith is a payments expert with a proven
track record of product development and invention
and has been named on several patents. She has
leveraged her experience in mobile, contactless
payments and NFC to create DIGISEQ.
Smith began her career in payments with American
Express, managing its smart card development
processes and EMV implementations. She then
joined Mastercard as a Senior Manager of a global
team and was instrumental in the delivery of the
Mastercard solution that supports Apple Pay.
After leaving Mastercard, Smith launched DIGISEQ
where she is focused on revolutionising the
Wearable and IoT market, while enabling traditional
manufacturers to deliver cutting edge functionality to
their customers.
Dr. Markus Braun
Wirecard
CEO & CTO
Markus Braun was appointed to the Management
Board, Wirecard AG, in January 2002. He previously
worked as e-Strategy Project Manager at KPMG
Consulting and as a Senior Consultant at Contrast
Management Consulting GmbH.
Braun has a Doctorate in Social and Economic
Sciences, University of Vienna.
6
Yann Delabrière
IDEMIA
CEO
Yann Delabrière was previously CEO of Faurecia,
then CEO of Zodiac Aerospace. He was appointed
IDEMIA’s supervisory board chairman in January
2018.
Delabrière began his career at the Committee of
Public Accounts before working in the cabinet office
of the Foreign Trade Ministry. He then worked as
Financial Director of COFACE (Compagnie
Française d’Assurance pour le Commerce
Extérieur, a French export credit agency) and for
the Printemps Group.
He is a graduate of the Ecole Normale Supérieure,
the Ecole Nationale d’Administration (the French
National School of Administration) and has a
post-graduate degree in mathematics.
HOW OEM-PAY IS DISRUPTING THE CONTACTLESS PAYMENTS LANDSCAPE
Philippe Vallée
Gemalto
CEO
Philippe Vallée has been CEO of Gemalto since
September 2016 and became EVP, Digital &
Security of Thales, in April 2019. Prior to this he was
the Gemalto's COO, with operational responsibility
for all its businesses (from January 2014 to August
2016), and EVP of Gemalto Telecommunications
Business Unit (from 2007 to 2013).
Vallée previously served at Gemplus then Gemalto,
in a number of roles including various Product and
Marketing management roles; SVP Marketing and
then President of the Telecom BU, Chief Technology
Officer. Besides France, he has had several
assignments in Hong Kong and Singapore. Vallée
has over 25 years' experience in the telecom
industry.
Ralf Wintergerst
Giesecke+Devrient
Group CEO
Ralf Wintergerst is also responsible for the Central
Services departments of Information Systems,
Corporate Security, Compliance Management and
Auditing, Corporate Communications, Corporate
Strategy, Corporate Development, Mergers &
Acquisitions, Legal Services and Corporate
Governance.
He joined G+D in 1998 as Director of International
Subsidiaries in the Cards and Services business.
Between 1999 and 2005 he held various
management positions in the division Currency
Management Solutions, ultimately heading it from
2006 on. As Group Executive of the business unit
Banknote Ralf has been a member of the
Giesecke+Devrient Management Board since 2013.
In November 2016 he was appointed Chairman of
the Management Board.
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André Løvestam
Zwipe
CEO
André Løvestam joined Zwipe as CEO in March
2018. He has led the company through a milestone
period, including a successful MUSD 14 fund
raising and public listing on the Oslo Stock
Exchange, Merkur Market.
Prior to Zwipe Løvestam’s career featured several
CEO positions at prominent Nordic ICT and FMCG
companies.
His Board assignments include Chairman, Share
Your Business Sweden AB, Energetic AS.
HOW OEM-PAY IS DISRUPTING THE CONTACTLESS PAYMENTS LANDSCAPE
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Figure 5: Contactless Transaction Values, Global (m), Split by 8

Key Regions, 2024
1.7 Forecast Summary
Juniper Research forecasts that global contactless transaction values will
reach nearly $6 trillion in 2024, up from $2 trillion in 2020. This increase
will be driven by significant growth in OEM-Pay and contactless card
transaction values, especially in the US.

The rollout of contactless cards in the US and improvements in the

contactless POS infrastructure in China will be key drivers of this
increase, as well as strong growth from Apple Pay. OEM-Pay will,
however, account for higher value payments over the forecast period, due
to restrictive payment limits for contactless cards.

Contactless cards will experience significant growth in the US, with

transaction values surpassing $1.5 trillion in 2024, rising from $178 billion
in 2020. This growth will be fuelled by the promotion of contactless cards
by major US banks, as well as reductions in the costs associated with
issuing contactless cards in the US and their increasing use in the
ticketing space. Improvements in contactless infrastructure are crucial for
North America Latin America West Europe
US retailers and technology providers to capitalise on this growing trend.
Central & East Europe Far East & China Indian Subcontinent
Juniper Research also anticipates that Apple Pay will account for a 52%
share of OEM-Pay transaction values, compared with 43% in 2020. A key Rest of Asia Pacific Africa & Middle East
driver of this is the expansion of Apple Pay’s user base in key regions,
including Far East & China and Europe, as well the extension of Apple’s Source: Juniper Research
reach outside OEM-Pay through its Apple Card initiative. While Google
and Samsung have made strides in their payment offerings, Apple has
much more unified ecosystem and this will enable it to retain its lead in
the market.
HOW OEM-PAY IS DISRUPTING THE CONTACTLESS PAYMENTS LANDSCAPE
Order the Full Research
Contactless Payments delivers the latest independent analysis of the
contactless payments market and how the payments ecosystem
continues to be disrupted by its deployment and evolution. With the
addition of a contactless tokenisation forecast plus an evaluation of
biometric payment cards, it offers a detailed assessment of contactless
infrastructure deployments.
The research also provides a far-reaching analysis of the opportunity for
mobile wallets; evaluating the positioning and future scope for key
OEM-Pay services, including: Apple Pay; Google Pay; Samsung Pay;
Other OEM-Pay (Garmin Pay, Huawei Pay, Xiaomi Pay). The research
covers: Contactless Payment Cards; Contactless Mobile & Wearable
Retail Payments; Mobile NFC Ticketing & Coupons.
Key Features
 Sector Dynamics: Provides an in-depth evaluation of the contactless
payment ecosystem, highlighting developments for the key segments
of: Contactless Payment Cards & POS Infrastructure; Contactless
Mobile Retail Payments; NFC Ticketing; Mobile Coupons.
 OEM-Pay Market: Analysis and a 5 year forecast suite for key
contactless wallets, including Apple Pay, Samsung Pay, Google Pay,
plus other OEM-Pay (Garmin Pay, Huawei Pay, Xiaomi Pay).
 Interviews: With leading players across the contactless value chain,
including Gemalto, Giesecke+Devrient and IDEMIA.
9
 Benchmark Industry Forecasts: Provided for the size and growth of
the contactless payments and ticketing market including active users,
transaction volumes and values.
 Juniper Research Leaderboard: Key player capability and capacity
assessment, together with our Leaderboard positioning matrix including
Gemalto, IDEMIA, Visa and Zwipe.
What’s in this Research?
1. Executive Summary & Core Findings – Top-level report
summarising market forecasts, allied to a series of key takeaways
and strategic recommendations (PDF).
2. Deep Dive Strategy & Competition – Strategic analysis of market
dynamics, drivers and trends, together with a vendor capability
assessment and contactless payment vendor Leaderboard (PDF)
3. Deep Dive Data & Forecasting – Market sizing and analysis by
region and sector, together with 5 year forecasts for key metrics,
including active users, transaction volumes and values (PDF)
4. Interactive Forecast Excel – Highly granular dataset comprising
more than 15,000 datapoints, allied to an Interactive Scenario tool
giving users the ability to manipulate Juniper Research’s data
(Interactive XL).
HOW OEM-PAY IS DISRUPTING THE CONTACTLESS PAYMENTS LANDSCAPE
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Publications Details

Publication date: February 2020

Author: Susannah Hampton

Contact: For more information contact info@juniperresearch.com

Juniper Research Ltd, 9 Cedarwood, Chineham Park, Basingstoke,

Hampshire, RG24 8WD UK

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