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Global EFT POS Terminals Market

  • July 2014
  • 90 pages
  • Frost & Sullivan
Report ID: 1011608

Summary

Table of Contents

Transaction Security Concerns and Mobile Payments Drive the Global EFT POS Terminals Market

This research service covers the global market for EFT POS terminals. Detailed market trend analysis including drivers, and restraints has been provided for each geographic region, i.e. North America, Latin America, EMEA and Asia-Pacific. Expansive unit shipment and revenue forecast analysis is presented for each of these geographic segments, for the total EFT terminal market, magnetic stripe terminal market, smart card terminal market, wireless and mobile terminal market, and IP-enabled terminal market which facilitates a better understanding of the current and future potential of the market. Competitive landscape and market shares of global companies have also been provided for each geographic region.

Executive Summary

S u m m a r y o f M a j o r F i n d i n g s
Market Definitions and Segmentation
D e f i n i t i o n s

Magnetic Stripe EFT POS Terminal
Magnetic stripe electronic funds transfer point of sale (EFT POS) terminals are devices that allow the transfer of funds electronically, in the form of either deferred payment (as in the case of credit cards where funds are guaranteed to a merchant by a credit authorizing institution during the time of payment for later collection) or account-to-account fund transfer (as in debit transactions).

The process can be made in real-time or in batches. For the purpose of this study, a magnetic stripe EFT-POS terminal is defined as a device that has:
- Display screen
- Keypad
- Magnetic stripe card reader
Smart Card EFT POS Terminal

Europay, MasterCard, and Visa (EMV) migration to combat card fraud has been driving a lot of improvements in the terminals industry, especially in Europe. One of the biggest impacts has been the introduction of chip-embedded payment cards and personal identification number (PIN). Smart card EFT POS terminals are devices that allow the transfer of funds electronically and are capable of reading both, magnetic stripe payment cards and smart cards.

For the purpose of this study, a smart card EFT POS terminal is defined as a device that has:
- Display screen
- Keypad
- Magnetic stripe card reader
- Smart card reader

Wireless/Mobile EFT POS Terminal
Wireless/mobile terminals provide a significant reduction in cost per transaction in regions of high telecommunication costs. Wireless/mobile terminals make use of technologies such as 802.11, wireless fidelity (Wi-Fi), general packet radio service (GPRS), and code division multiple access (CDMA) for communication.

IP-enabled Terminal
Internet protocol (IP)-enabled terminals are those that make use of high-speed communication in wired and wireless networks such as digital subscriber line (DSL), cable modem, very small aperture terminal (VSAT), and Ethernet.

M a r k e t S e g m e n t a t i o n
The total EFT POS terminals market comprises of magnetic stripe EFT POS terminals and smart card EFT POS terminals.
Wireless/mobile and IP-enabled EFT POS terminals represent a percentage (and are a subset) of the total EFT POS terminals market.

Te c h n o l o g i e s C o v e r e d
The technologies covered in the global EFT POS Terminals market are:
- Magnetic Stripe EFT POS Terminals
- Smart Card EFT POS Terminals
- Wireless / Mobile EFT POS Terminals
- IP-enabled EFT POS Terminals

G e o g r a p h y D e f i n e d
Geographic regions researched in this study include:
- North America (NA)
- Europe, Middle East and Africa (EMEA)
- Asia-Pacific and Latin America (APAC and LA)
Key Market Trends
The revenue for the global EFT POS terminals market is expected to increase from $ million in 2013 to $ million in 2019, at a CAGR of %. Growth in the payments card terminals industry has been modest in recent years. A combination of factors including market saturation, commoditization, and weak global economic and credit markets have resulted in slowing the growth rate of the industry as a whole. Traditionally strong markets such as the United States and Western Europe have reached a stage where all the traditional segments are more or less saturated. On the other hand, countries such as China, India, Brazil, Mexico, and a few others are witnessing faster growth in comparison.

EMV deadlines in regions such as Latin America, Europe, and Asia-Pacific are the main drivers pushing terminal sales in these markets. Many terminals currently in use do not have the capacity for enhanced memory or speed (to read smart cards) and as they do not have the capacity to upgrade, these terminals will have to be replaced to become EMV compliant. These countries currently have low payment card penetration and are investing to improve their infrastructure.

Key challenges for the global EFT POS terminals are:
- Accurately forecasting demand for products and services in an uncertain global economic and retail environment
- Threats from niche vendors with lower-priced solutions in the emerging markets
- Compliance with regional environmental laws and associated regulations
- Lack of awareness on the benefits of migrating to smart card technology and infrastructure

Key drivers for the global EFT POS terminals market are:
- Mobile and contactless payments and portable terminals driving growth in the market
- Terminal manufacturers capitalizing on growth opportunities in emerging markets in Asia, Latin America and CEE
- Security and interoperability standards driving new deployments and replacements of electronic payment systems
- Wide range of affordable and exciting wireless communication technologies
- TCP/IP connectivity enabled terminals gain universal acceptance

Key restraints for the global EFT POS terminals market are:
- Entrenched OEMs create significant barriers to entry for new vendors
- The need for extensive and complex list of certifications and governmental regulations
- Market saturation in traditionally strong markets in Western Europe and the United States
- Continued weak global macro-economic conditions adversely impacting the POS industry

Competitive Landscape
The EFT POS terminals industry underwent further consolidation in 2010–2013, with more mergers and acquisitions being carried out by the two global vendors. VeriFone is currently the market leader following its acquisition and integration of Hypercom's global business. Ingenico has strengthened its EMEA presence as well through the acquisition of the terminals business of Sagem Monetel. Equinox Payments (Hypercom's U.S. operations) is the third biggest participant in the market, trailing the leaders by a large margin.

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