Contactless Payments Adoption in the US: Trends, Challenges, and Future Growth

Contactless payment has revolutionized the United States’ financial environment. According to Precedence Research, the global market for contactless payment has reached 56.11 billion in 2025. In comparison to swipe or chip-based payment, contactless payment makes use of Near Field Communication (NFC) and Radio Frequency Identification (RFID) technology to achieve effortless, tap-and-go payment. While other nations moved faster to take up contactless payment, the US was relatively slow to join. The adoption gained momentum, however, in the recent years, as technology has improved, and consumer behavior has changed.

This article analyzes the current status of contactless payments in the US, the barriers holding their mass adoption back, and the potential trajectory of growth.

Trends Driving Contactless Payment Adoption

While speaking of trends, consumer behavior undoubtedly tops the list, but there is more to it. Let’s dive deeper to glimpse of the trends shaping contactless payment in 2025.

1. Changing Consumer Behavior

Picture a frazzled New York commuter rushing to board an early morning train. Instead of hunting through their wallet or swiping their card, they simply tap their phone against the terminal and walk through the turnstile. It is the convenience that customers are demanding these days. Digital wallets like Apple Pay, Google Pay, are increasingly used, as customers prefer the use of tap-and-go payment as compared to the use of credit cards.

Notably, 73% of millennials and 66% of Generation Z embrace contactless payment methods, reflecting a strong preference for digital solutions among younger demographics. The growing use of e-commerce and subscription services is also steering digital payment usage as customers seek smooth and secure payment experiences.

A further driving force is the growing reliance on financial super-apps, where payment, banking, and investment features are all combined within one ecosystem. PayPal and Venmo are some of the apps that have expanded beyond peer-to-peer payment, introducing features such as trading cryptocurrencies and micro-investing, Further bringing digital payment into people’s lives.

2. Retailer and Merchant Adoption

The response was very positive when contactless payment was introduced in Starbucks outlets. Consumers appreciated the convenience of instant payment, while businesses benefited from reduced queues and improved consumer satisfaction.

Following the footsteps of Starbucks, large retailers such as Walmart and other retailers soon followed and installed contactless payment solutions, and the trend soon followed among many smaller retailers. The push to utilize real-time payment solutions further boosted merchant take-up, and more POS terminals are now NFC-enabled. Furthermore, innovations around payment technology, including payment through the use of QR codes, are benefiting even non-traditional retail units, including street vendors and to accept contactless payment at small investment.

While large retailers are embracing contactless payment, the SME segment is yet to catch up. The arrival of affordable NFC-enabled payment solutions from the fintech segment is set to bridge this gap, enabling businesses of all sizes to offer customers the convenience of tap-to-pay facilities. Visa’s Tap-to-Phone technology, for instance, has seen a 200% year-over-year growth, supporting millions of sellers globally.

3. Regulatory and Security Enhancements

With cyber-attacks and data breaches on the rise, the financial industry has reinforced security protocols around contactless payment. Tokenization and biometric authentication (such as fingerprint and facial recognition) have reduced fraud risks significantly, and tap-and-go payment is safer than using physical cards. There are still efforts made to make it safer, but currently, the card payment atmosphere is not-so vigilant. Payment organizations are increasingly adopting AI-enabled fraud detection systems that scan payment behavior in real-time and identify suspicious activity before it leads to financial loss.

Think if something like this happens: a major bank detected a fraudulent transaction attempt when an AI-powered system flagged an unusual payment pattern. Using live data and consumer behavior analysis, the bank successfully prevented fraud from happening, and this illustrates the power of AI-based security solutions when it comes to digital payment.

Additionally, regulators are calling for stronger data protection legislation to instil consumer trust in digital transactions. Regulatory bodies and financial protection organizations are working toward policy initiatives that render digital payment systems transparent, giving users greater control over their financial information.

Challenges in Widespread Adoption

Despite rapid growth, there are still barriers to its adoption. Let’s take a look at these.

1. Infrastructure Limitations

Even though more and more small businesses and independent retailers are taking up NFC-enabled POS terminals, several of them are still not equipped with these facilities. Upgrading payment infrastructure is costly and thus is one of the key hurdles to adopting contactless payment. Many older payment systems installed by smaller merchants are costly to replace and upgrade and thus the transition is challenging.

Furthermore, where connectivity is poor, the efficiency of contactless payment is affected, and there is a need to further develop offline payment capabilities.

2. Consumer Awareness and Trust

Whereas young people readily embrace digital payment solutions, older people are concerned about security and reliability. Unauthorized use, hacking risks, and privacy of their personal data are concerns that continue to deter mass take-up. These concerns must be addressed through targeted consumer awareness initiatives and improved financial literacy programs that highlight the security features of contactless payment as against cash transactions. In 2025, 47% of Americans had security concerns with their biometric data. Also past year,  41% are hesitant to trust independent retailers or small chains with such information.

3. Interoperability and Standardization

Relative to other markets, the US is faced with non-uniform standards and disintegrated payment networks. Standardization of payment protocols between banks, payment networks, and card issuers will be vital to enable compatibility and deliver a seamless and a smooth consumer experience.

The Future of Contactless Payments in the US

The next wave of innovations from public transit integrations to biometric payments, will further cement contactless transactions as the new normal.

1. Expansion of Tap-to-Pay Public Transit Systems

Major cities’ transit systems, such as New York, Chicago, and San Francisco, are introducing tap-to-pay solutions, opening the door to growth on a national scale. No longer does the New York commuter need to carry around a MetroCard; they can manage on the mere tap of their phone. Consumer uptake is set to be significantly eased by this integration.

2. Emergence of Wearable Payment Solutions

Wearable technology is taking payment beyond smartphones. A fitness enthusiast who finishes an early morning run can pay immediately by tapping their smartwatch at a juice bar. The expansion of NFC-enabled wearable technology is also driving the use of contactless payment in everyday life. The global market for wearable payment devices is projected to reach $393.4 billion by 2030, growing at a CAGR of 23.7%.

3. Advancements in Biometric Payment Systems

Besides wearables, the next major trend of contactless payment is biometric payment. Face recognition, palm scanning, and voice authentication are all being tested as safe and easy payment solutions. They would render physical cards and devices obsolete and the payment experience even more frictionless.

Conclusion

Contactless payment is no longer something of the future but an everyday essential that is driven by consumer demand, technological improvements, and regulatory support. Despite the hurdles, the speed toward a cashless society continues to rise. With the enhancements of AI, blockchain, and biometric authentication, the payment system is poised to significantly change over the next ten years to make payment more safe and efficient.

At the forefront of the digitalization of the financial sector, Verinite’s role as a facilitator of safe and scalable contactless payment solutions will be pivotal in shaping the digital payment environment of the US.