The point of sale (POS) hardware market revenue from traditional POS and mPOS will increase to more than $4.5 billion in 2021, says ABI Research.
mPOS employs a smartphone or tablet as the cash register. Retail merchants looking to enhance convenience and foster new experiences and transaction choices at the point of sale will propel POS hardware development over the next five years.
Juniper Research says smartphone and tablet-based mobile point-of sale terminals will handle 40 percent of all retail transaction value by 2021 against an expected 12 percent in 2016. The use of mPOS systems will account for more than 1 in 3 POS terminals by 2021, driven by larger retailers adopting mPOS as part of the adoption of point-of-sale options.
According to ABI Research, mPOS did not yet eat into the traditional POS market as many industry experts initially hoped.
“This is reinforced by the emphasis on aggressive hardware pricing strategies to gain market share among low-tier merchants, while shifting focus to longer-term reoccurring revenue opportunities via services, analytics, and fraud management,” said Phil Sealy, senior analyst at ABI Research.
The traditional POS market is heading toward a transitional period. POS hardware vendors including Ingenico, PAX Technology, and Verifone will take advantage of next-generation opportunities in pay-at-the-table, in-store self-service, omni-channel enablement, and analytics.
Retail shops are shifting their POS strategies toward a consumer-first approach via solutions that employ app integration, the convergence of fixed position terminals with mobility, features based on interactions / touchpoints, self-service, and loyalty expansion.
mPOS vendors, including Clover and Square, are moving up the value chain via their respective smart POS solutions. Tier One hardware suppliers like Ingenico, PAX Technology, and Verifone are extending product portfolios, moving in the opposite direction to better challenge in the lower tiered merchant category.