The way in which payments are conducted has been gradually changing but the shift towards all-digital platforms has accelerated following the COVID-19 outbreak.
As noted in a recent report from Juniper Research:
“The number of and the success of online retailers has been growing, and in many parts of the world, cash transactions are representing a smaller percentage of payments year-on-year. These economic changes have a stark implication for POS terminal vendors, who risk their products being marginalized, as customers stay away from bricks-and-mortar retailers, or may lack the functional capabilities to process contactless payments.”
According to Juniper’s research findings, this “evolution” to payment interactions has been accelerated by the COVID-19 crisis. The researchers added that “with pandemic control measures and public wariness, the migration to online retailers has been accelerated, and non-contact forms of payment are becoming even more popular.”
The report pointed out that POS terminal vendors need to adapt to “meet
modern demands.” The researchers revealed that an “upscaling in the contactless payment facilitation of terminals has been ongoing for a while, but a fast response and new directions are required in response to the heavy impact of the pandemic.”
The Juniper Research team further noted that there are dedicated, mobile (also called mPOS), contactless, smart, biometric and soft POS systems.
Juniper explained that each form “suits different user needs for payment processing.”
The report further revealed:
“The total value of transactions processed by POS Terminals will exceed $17.3 trillion in 2026, from $14.8 trillion in 2021; growing by 28%. The growth is driven by a continually evolving payment processing landscape in which cash plays a reduced role. The report found that POS vendors must ensure they support omnichannel retail business models and are prepared to compete with alternative payment methods such as QR code payments.”
The research report added that the pandemic and “increased” cashless currencies bring challenges that POS vendors “must manage, with retail moving online and enabling contactless processing.”
The report also mentioned that POS vendors must “integrate smart capabilities” such as stock management and data analytics to their terminals, in order to “maximize the value of their platforms to end users.”
The report added that shipments of mPOS (mobile point of sale) terminals will “grow from 20 million in 2021 to 32 million by 2026. This represents a growth of 56% over the next five years.”
The report from Juniper Research also noted that this growth will be “fueled by the accelerated transition from cash, with previously cash-only vendors adopting mPOS solutions rapidly.”
The report added:
“Emerging markets will offer the greatest opportunities for mPOS vendors during this time, as demand for digital payments grows in these regions. POS vendors should build a strong mPOS offering, backed up by free access to business insights, to capitalize on this growth potential.”