Spending on contactless hardware, software and services will jump to $800m by 2011, up from just $260m in 2006, market watchers predict.

A new report from ABI Research suggests that contactless ticketing and payment deployments are quickly expanding around the world.

But the study noted that these two largest applications remain mostly separate, limiting the uptake of contactless cards and delaying the transition of contactless payment technologies into mobile phones.

"The benefits of contactless ticketing and payments have already been experienced in deployments and test trials around the globe, but a common infrastructure will fuel more rapid adoption," said Jonathan Collins, senior analyst at ABI Research.

He added that transportation ticketing, and open credit, debit and e-purse payments tied to financial service networks, are the primary drivers for contactless transactions.

According to ABI, technology and business issues must be resolved before a single contactless infrastructure can be leveraged by card issuers and the emerging mobile phone contactless payment market.

The analyst firm said that contactless commerce uptake is taking place at varying rates across regions, national markets and market segments as contactless payments are added to existing payment networks and environments.

In North America, open system payments are driving contactless adoption, whereas in Europe contactless ticketing systems are the primary drivers.

"Trial work is already underway in North America and Europe to allow bank-issued contactless payment cards to interoperate with contactless transportation systems, but significant work remains to be done," said Collins.

Contactless technology is making the greatest headway in Japan and South Korea, however, in part because contactless payments have been built on the foundations of contactless transportation ticketing.