Contactless payment card issuance is likely to reach 1.5 billion units in 2018, accounting for more than 50 percent of all payment card shipments globally, according to the advisory firm ABI Research.

ABI said that breaking the 50 percent barrier marks a significant milestone in contactless card migration, with market momentum expected to continue — most notably in the U.S., India, Southeast Asia, and Latin America.

Reductions in average selling price for contactless cards will play a significant role in contactless growth as the price gap between contact and contactless narrows and next-gen technologies and materials arrive on the market.

"Differentiation is playing a key role in issuer strategies, in a bid to not only differentiate from the traditional competition, but also as a means of combating neo [and] challenger banks," said Phil Sealy, principal analyst at ABI Research. "The leading smart card vendors, including Gemalto and IDEMIA, have primed their respective payment card product portfolios to take advantage of a card market which is transforming from one of delivering secure payment authentication toward new functionality and personalized experiences to stand out from the crowd, create new levels of brand stickiness, and ultimately broaden card portfolios via new form-factors, including metal cards and next-generation powered payment cards with biometric and display enabled form-factors."