ABI Research Forecasts POS Hardware Market Will Reach to $4.5 Billion by 2021
mPOS Fails to Impact Traditional POS as Strongly as Once Expected
ABI Research forecasts the point of sale (POS) hardware market will jump to more than $4.5 billion in 2021 with revenues generated from a combination of traditional POS and mPOS, which employs a smartphone or tablet as the cash register. 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.
“Arguably, despite hype, mPOS did not yet eat into the traditional POS market as many industry experts initially hoped,” says Phil Sealy, Senior Analyst at ABI Research. “This is reinforced by the continual emphasis on aggressive hardware pricing strategies in a bid to gain market share among low-tier merchants, while shifting focus to longer-term reoccurring revenue opportunities via services, analytics, and fraud management.”
In addition, the traditional POS market is heading toward a transitional period. Leading POS hardware vendors including Ingenico, PAX Technology, and Verifone are priming themselves to take advantage of next-generation opportunities in pay-at-the-table, in-store self-service, omni-channel enablement, and analytics. This is occurring as merchants shift 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.
“There is ample opportunity remaining,” continues Sealy. “New use cases, functionalities, and the extension of POS volumes per store will drive growth over the next five years.”
ABI Research finds mPOS vendors, including Clover and Square, are already moving up the value chain via their respective smart POS solutions. Meanwhile, 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.
“Competition is clearly going to increase in both the traditional and mPOS device categories,” concludes Sealy. “Those vendors that can offer compelling, reliable, feature-rich solutions with next-generation functionalities at suitable, tiered price points will be those that win out.”
These findings are from ABI Research’s POS & mPOS Devices market data.