Paying with our phone could soon be the new reality for shoppers. According to new research from Timetric, things are looking bright for the global mobile-point-of-sale industry (MPOS).
From 2011 – 2012 the number of MPOS terminals registered an annual growth of 111%. This trend is set to continue, as the volume of terminals is expected to increase from 4.5 million in 2011 to 38 million in 2017, at a projected CAGR of 42.7%. The positive market outlook is driven by growth in the retail sector, increased online trade, a rise in smartphone usage and card penetration. Even though traditional POS systems are still far more common – with MPOS terminals owning 17% of the total POS terminal market in 2012 – this number is expected to increase substantially and reach 46% by 2017.
Embracing MPOS technology
MPOS technology has a strong presence in countries such as the US, Canada, the UK, Germany and France fronted by brands such as Square, iZettle, SumUp, Payleven, PayPal Here and Intuit. Many of these are currently running a number of trials and pilot programs in partnership with businesses such as Perry Ellis, Gucci, Saks Fifth Avenue and Aurora Fashions. Restaurants, pubs and hotels such as Horney Goat Brewing Company and The Gaylord Hotels have successfully adopted the technology. Another area which has embraced the technology is transit systems and taxi services. Initially MPOS technology was targeted at small enterprises who could not afford the conventional point of sale (POS) system. However, demands have been driven by new technology benefits such as improved customer service and the ability to process payments at anytime in any location. Moreover, the use of smartphones and tablets as base-devices has enabled developers to expand their market share. The positive growth potential offered by the technology has attracted a number of competitors, and according to the Timetric report, further innovations are expected to take place in the future.
MPOS solutions not free from challenges
The advantages of using MPOS solutions are compelling, yet there are several operational, technical and regulatory challenges. One of them is the reliability of the service. Consumer smartphones and tablets are not yet built with strong security features and paying with these can therefore leave the customer vulnerable to fraudulent activity. Furthermore, processing payments over a volatile wireless network can also prove to be problematic.
Timetric’s report; ‘2020 Foresight: Mobile Point of Sale Technology’ was published on the 17th April 2013.
Notes to the editor:
Mobile-point-of-sale technology (MPOS): MPOS technology brings wireless technology to conventional POS systems. This technology doesn’t change the payment structure, but facilitates transactions to be processed through a mobile terminal which uses the same logic and codes as any fixed POS terminal. Innovations have enabled smartphones and tablets to be modified into mobile POS systems.