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Contactless payments’ contribution to total face-to-face (F2F) transactions grew more than six times to 16% in December 2021 from less than 2.5% in December 2018, according to a whitepaper released by Visa and Worldline India.

The whitepaper, ‘India taps into a Contactless Future’, analyses India’s journey with digital payments infrastructure and contactless payments, highlighting the rapidly growing adoption across regions and sectors.

According to the paper, less-touch payments in stores ensured consumer safety, a necessity since the pandemic.

Additionally, the adoption of EMV chip cards has been pivotal for the growth of contactless payments, aided by supportive regulations that increased the contactless limit in India to 5,000 in 2021.

The whitepaper also highlighted that the highest adoption of contactless payments was observed in sectors like quick-service restaurants, pharmacies, food, grocery, etc., which accelerated with the impact of the pandemic.

According to Worldline India, while 25% of all transactions at supermarkets were contactless in January 2020, these transactions rose to 31% by January 2022.

The user footprint across India also stepped up with metro cities leading the way. In 2020 and 2021, Delhi-NCR, Karnataka, Gujarat, and Telangana had the highest proportion of contactless transactions and penetration, across both debit and credit cards.

Meanwhile, Worldline India Digital Payments Report 2021 has shown that while cards contribute to 26% of all digital transactions, they generate 53% of the value of all digital commerce.

Ramakrishnan Gopalan, vice-president, head of products and solutions, for India and South Asia, Visa said “The rapid adoption of contactless payments in the past few years is testament to the rise in acceptance of safer and faster forms of cashless payments across consumer segments. We have observed that the key drivers of contactless growth – availability, convenience, utility, and security – will continue to aid adoption at scale as contactless cards become ubiquitous. We are confident that it is a sustainable payment solution for seamless face-to-face transactions and will help greatly in reaching the goal of a less-cash society."

According to the paper, contactless payments can result in repeat purchases, customer stickiness, and financial inclusion through cards, a familiar instrument to most consumers today.

Sunil Rongala, senior vice-president, strategy, innovation and analytics, Worldline India, said, “As contactless payment methods have shifted from a choice to a necessity in recent times, backed with multiplying volumes of transactions in the last three years, we see immense potential in contactless further helping digitize the merchant ecosystem. Coupled with the increasing merchant acceptance of contactless cards we are seeing not only in metro cities but in non-metro cities as well, we anticipate contactless payments to be a key driver of digital payments in the future."

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