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POS Terminals and Wireless M2M

  • February 2015
  • -
  • Berg Insight AB
  • -
  • 40 pages

Executive summary

The world is continuously shifting from coin and paper-based payments such as cash and cheques to electronic forms such as payment cards and mobile phone payments. As a part of this shift, POS terminals are becoming more and more common in all parts of the world. The global installed base of POS terminals grew by 11 percent to 75 million units in 2014. Market growth is primarily fuelled by the increasing adoption of electronic payments in emerging markets. Developed markets are relatively saturated in terms of POS terminal adoption.

Cellular connectivity has become a very popular option for POS terminals and was incorporated in around one third of the devices shipped in 2014. The wireless technology has an important role in facilitating the global adoption of electronic payments, as it enables the rollout of POS terminals to many new market segments and parts of the world where the fixed line telecommunications infrastructure is less developed. The installed base of cellular POS terminals reached 20.8 million in 2014. Berg Insight forecasts a CAGR of 7.2 percent between 2014 and 2019, resulting in a total of 39.2 million cellular POS terminals at the end of the forecast period.

The market for NFC-ready POS terminals continued to display strong momentum in 2014 with annual shipments reaching an estimated 9.5 million units worldwide. The attach rate for NFC was highest in EU28+2 and North America, where 80 percent and 75 percent of the POS terminals shipped featured NFC respectively. NFC was also a very popular feature in many other major markets worldwide, including Brazil, Turkey and China. While the installed base of NFC-ready POS terminals has grown quickly, many of terminals do still not have the contactless features turned on. Berg Insight estimates that approximately 9.0 million POS terminals accepted contactless payments with Visa payWave, MasterCard PayPass or UnionPay Quickpass at the end of 2014. This marks a major increase from 2012 when just 2.6 million POS terminals worldwide had the contactless features enabled.

Table Of Contents

POS Terminals and Wireless M2M
Table of Contents i
List of Figures iii
Executive summary 1
1 Introduction 2
1.1 The card payments industry 2
1.1.1 The transaction process in card payments 2
1.1.2 Costs of a card payment transaction 3
1.1.3 Revenue distribution in the card payments industry 6
1.1.4 Card payments and household consumption expenditures 6
1.1.5 Breakdown of household consumption expenditures 7
1.1.6 Card payment volumes 8
1.2 The POS terminal market 8
1.2.1 POS terminal market data 10
1.2.2 POS terminal form factors 11
2 Wireless M2M and NFC 13
2.1 Evolution of electronic payments 13
2.1.1 EMV migration 13
2.1.2 Adoption of wireless M2M communication 15
2.1.3 Rollout of NFC-ready terminals 16
3 POS terminal vendors 18
3.1 Vendor profiles and strategies 18
3.1.1 CCV 19
3.1.2 CyberNet 19
3.1.3 Brookfield Equinox 20
3.1.4 ID Tech 20
3.1.5 Ingenico 21
3.1.6 PAX Technology 22
3.1.7 REA Card 24
3.1.8 Spire Payments 24
3.1.9 SZZT Electronics 25
3.1.10 VeriFone 25
3.1.11 Worldline 26
4 Forecasts and conclusions 28
4.1 Market trends and drivers 28
4.1.1 Steady uptake of wireless M2M 28
4.1.2 Interest in NFC surges 29
4.1.3 POS terminal app stores are a potential game-changer 29
4.1.4 New technologies can transform the shopping experience 30
4.2 Market forecasts 31
4.2.1 Cellular POS terminal market forecast 32
4.2.2 NFC-ready POS terminal market forecast 35
Glossary 38

List of Figures

Figure 1.1: Typical payment transaction flow 3
Figure 1.2: Visa interchange fees in the UK and the US 4
Figure 1.3: Revenue distribution in card payments 5
Figure 1.4: Card payments as a share of HCE and GDP (World 2011) 6
Figure 1.5: Household consumption expenditures by service and product (EU28 2012) 7
Figure 1.6: Card payments in Europe and North America (2013) 8
Figure 1.7: Installed base of POS terminals and ATMs (World 2009-2013) 9
Figure 1.8: POS terminal density by country (World 2013) 10
Figure 1.9: Stationary and mobile POS terminals 11
Figure 1.10: mPOS devices 12
Figure 2.1: EMV implementation status (World 2013) 14
Figure 2.2: POS terminals with cellular connectivity by region (World 2014) 16
Figure 2.3: NFC-ready POS terminals by region (World 2014) 17
Figure 3.1: POS terminal shipments by manufacturer (World 2014) 19
Figure 3.2: PAX Technology POS terminals 23
Figure 4.1: Deployment of NFC and cellular technologies (World 2013-2019) 31
Figure 4.2: Cellular POS terminal shipments by region (World 2013-2019) 33
Figure 4.3: Cellular POS terminal installed base by region (World 2013-2019) 34
Figure 4.4: NFC POS terminal shipments by region (World 2013-2019) 36
Figure 4.5: NFC POS terminal installed base by region (World 2013-2019) 37

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