HOW POS HARDWARE &

SOFTWARE ARE
EMPOWERING OMNICHANNEL
RETAIL
Whitepaper

www.juniperresearch.com
HOW POS HARDWARE & SOFTWARE ARE EMPOWERING OMNICHANNEL RETAIL
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POS systems combine hardware (card readers, tablets and smartphones, as well as receipt
printers and barcode scanners) and software to enable retailers and merchants to accept
1.1 Introduction to POS card, mobile and other payments directly, without having to invest in cash registers or to
upgrade their existing hardware.
A 2018 study by the European Central Bank found that
non-cash payments are increasing; the total number of Juniper Research defines a POS terminal as:
such payments in the euro area increased by 7.9% to
90.7 billion in 2018 compared to 2017. Card payments
accounted for 46% of the total number of non-cash An electronic device used to process electronic payments at retail or
payments in the Euro area. Around 44 billion transactions merchant locations such as stores, restaurants etc.
were processed by retail payment systems in the Euro
area with an amount of €34.0 trillion. Data from the BIS
Although there are many benefits to a cashless society, such as lower transaction costs, faster
(Bank for International Settlements) indicates that, as a
transaction speeds and reduced risk, it also creates a divide between those who can make
percentage of narrow money, the value of banknotes and
cashless payments and those who cannot, with an associated risk of marginalising the
coins in circulation in the Euro area is steadily declining;
unbanked and lower earners. However, as developing markets have emerged as increasingly
from 18.2% in 2012 to 15.4% in 2017. Sweden is the
important to the global economy and the number of banked individuals has increased, there
frontrunner in terms of cashless adoption, with only 2.2%
has been steady growth in POS terminals.
of their narrow money being banknotes and coins by 2017.
This figure compares to 65.2% in Brazil and 44.3% in the Figure 1: POS Terminals Market Segmentation
US.

The adoption of card payments been driven by the need to

reduce the use of cash. Cash, as a method of payment,
comes with associated costs such as producing notes and
coins, distribution and management costs, as well as
security costs. However, changes in payment methods
and consumer habits have been underway for some time;
the POS (Point of Sale) terminal market is a mature
example of this.
Source: Juniper Research
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payments through add-ons such as scanners. Increasingly, POS

1.2 Smart POS Terminals terminals are able to process other forms of payment, such as the Indian
Aadhar Pay system which links straight to a bank account via a fingerprint
Traditional card terminals are likely to be increasingly replaced by or the Pundi X system which can use cryptocurrencies.
all-in-one solutions, allowing the amalgamation of payments and POS
functionality. The purpose of a traditional card terminal is to enable
payments by chip, contactless or magnetic stripe. The terminal reads the 1.4 Cryptocurrency & POS
information on the credit/debit card (or mobile phone with the card saved
in a digital wallet), then processes it over a secure Internet connection The ongoing growth of Bitcoin and other cryptocurrencies is having an
and prints a receipt. With these machines, any additional features are impact on the financial sector as a whole and continues to spark debate
generally related to card transactions. POS terminals will have further as to whether cryptocurrencies are valid currencies, or a type of
expansion of use cases from simply being used for card payments and investment. With the emergence of new cryptocurrencies, they are now
generation of invoices to performing additional POS operations, such as a becoming a more viable method of payment for both PSPs (Payment
UPI (Universal Payments Interface), QR code or NFC transactions and Service Providers) and merchants. Furthermore, with an increasing
mobile wallet transactions. The extra functionality offered by these number of companies offering a way for brands to sell their products via
terminals is enabled by downloaded apps and features, as well as inbuilt cryptocurrency, the idea for utilising Bitcoin and other cryptocurrencies for
features, such as touchscreens and integrated cameras. payment is far more established in the eCommerce space than it is in the
POS space. eCommerce websites, such as electronics store Newegg
and travel website Expedia, are accepting Bitcoin as a form of payment
1.3 The Rise of Alternative Payment Methods and partnering with payment processors such as CoinBase and BitPay to
achieve this. Accordingly, the POS market has been drawn into the field
With the rise of alternative payment methods, comes the potential for the of cryptocurrency, with the introduction of POS systems with integrated
decline in use of POS terminals. Some biometric payment methods, such cryptocurrency gateways, mirroring developments in eCommerce. POS
face-payments and Aadhaar Pay do not require a POS terminal for systems are now emerging that include cryptocurrency as an accepted
completion. Soundwave payments enable transactions to be completed payment type.
through smartphones and featurephones and are enabled via software on
the mobile wallet or banking app. Similarly, payments via QR code (such
as that offered by Alipay and WeChat Pay) do not require a traditional 1.5 POS Software
POS machine. Several vendors in the POS hardware space are trying to
plug this gap and offering terminals that accept barcode and QR POS systems have moved on significantly from the days of simple
order-entry software, with an increasing number of businesses
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recognising the value to be gained through the business management rising. Businesses are slow to change, particularly if the investment in
functionality offered by modern POS systems. Retail businesses are their existing legacy system has been significant and they may lack the
increasingly looking to run their physical bricks-and-mortar stores capital to upgrade their systems. Companies need to balance meeting the
alongside an eCommerce store. Many POS software vendors enable business’ and its customers’ requirements while hanging on to expensive
both to run concurrently on the same platform, making inventory and outdated systems.
management, marketing, online visibility and order fulfilment across
multiple channels far easier. All software providers offer varying degrees
of additional functionality, with most providing offline capabilities. 1.7 The mPOS Market
Businesses need to constantly look for ways to add value and enhance
mPOS (mobile point of sale) is having a highly disruptive effect on the
the customer experience; the ways in which this can be achieved at POS
overall POS market and will be examined in this section in greater detail.
vary according to market segment.

Whereas businesses traditionally used different vendors to provide POS 1.7.1 Current mPOS Market Status
and payments for example, customers will increasingly demand a
By offering a solution which can be used in combination with a
one-stop-shop solution so that they do not have to seek specific business
smartphone and does not require any fixed hardware, the mPOS market
management functionality elsewhere. Vendors will need to deliver more
is currently creating a payments revolution across the world. mPOS
capability and more holistic solutions, whether this is developed in-house
enables businesses to accept card payments where they previously could
and built into solutions or ‘bought in’ and incorporated into the offering
not. This is aided by growing smartphone penetration, particularly in
through collaborations with specialist partners. Consumer demand is
developing markets.
driving new channels and therefore more and more functionality is
required. Software providers will need to meet the varying requirements At present, however, adoption is highest in North America (30.4% of total)
of the businesses they serve to be competitive. because many of the most prominent mPOS vendors are from this
region; for example, Square, a US-based vendor which has driven mPOS
adoption. Far East & China is gaining ground however, with 28.8% of the
1.6 Replacement of Legacy Systems
total.
With the rise of non-cash payments, eCommerce and the requirement to
process more transactions at a faster pace, legacy POS systems are
falling short. Requirements for reporting, access to information about the
business, to better manage the business and streamline operations are
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Figure 2: mPOS Terminals Installed Base, Global (m), 1.7.2 Payment Cards Market Overview
2013-2018
At the end of 2019, Juniper Research estimates that there will be over
14.8 billion credit, debit and ATM cards in issue

Figure 4: Global Credit/Debit/ATM Cards in Issue, 2018, Split by 8

Key Regions (14.4 billion)

3%
4% 10%
7%
6%
Source: Juniper Research
5%
Figure 3: Global Number of mPOS Terminals in Use Market Share
(%), 2018, Split by 8 Key Regions (25.6 million) 4%

7%
4%
3%
30%
60%

29%
North America Latin America West Europe
6%
Central & East Europe Far East & China Indian Subcontinent
12%
8%
Rest of Asia Pacific Africa & Middle East

North America Latin America West Europe

Source: Juniper Research
Central & East Europe Far East & China Indian Subcontinent
Rest of Asia Pacific Africa & Middle East In terms of cards in issue, the Chinese market continues to dominate,
with a 60% share of all cards in issue; around 8.7 billion. At the end of Q1
Source: Juniper Research
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2019, UnionPay had around 7.6 billion payment cards in issue, up from
around 6.7 billion in Q1 2018.

Outside China, Mastercard and Visa are the primary players in the credit
and debit card arena. Mastercard had more than 2 billion cards issued at
the end of 2018, with Visa boasting 3.3 billon cards at the same point. The
majority of ‘other’ companies are comprised of ATM-only brands, which
are particularly popular in markets such as Japan, where cash
transactions are still common.

Card issuers have now moved beyond cards and are pursuing strategies
for payment processing. These companies are crucial to the continuing
unification of the in-store and online retail processes into an omnichannel
experience. Through the provision of a complete solution, which includes
the capability to process all types of payments, these vendors are
changing the way the payments market works.

The increasing popularity of mobile wallets is also having a disruptive

effect, with physical cards becoming less important to the market. Card
issuers are also pushing contactless payments, with Visa particularly
important to the implementation and growth of the system.
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1.8 POS Hardware: Movers & Shakers 2019

Paula Felstead Ben Lo Steve Hare

Ingenico BBPOS Sage

CTO Chairman, Co-Founder & CEO CEO

Paula Felstead joined Ingenico in 2017, following the Ben Lo founded BBPOS in 2008. As BBPOS’ Chief Steve Hare joined Sage in January 2014, having
acquisition of Bambora, to lead the integration with Technology Officer, Ben currently leads the previously been Operating Partner and Co-Head of
Ingenico Retail and realise benefits of the company’s innovation and technology efforts and the Portfolio Support Group at the private equity
combination for both companies. In June 2018, manages the design of emerging POS hardware and firm Apax Partners, which he joined in 2009.
Felstead took the role of CTOO for Ingenico Retail. software.
She is responsible for the Retail payment platforms Prior to this he built over 10 years’ leadership
and customer operations, from Argentina to Captivated with innovative design and development, experience in three listed UK companies,
Australia. Lo says that: ‘We are committed to pushing the culminating as CFO for FTSE 100 company
boundaries of mPOS innovation and leading the way Invensys from 2006 to 2009. Between 2004 and
In November 2018, Felstead took the role of Group for future development.’ Committed to broadening 2006 Hare was Group Finance Director for
CTO, which includes the original perimeter of the the application of and accessibility to new Spectris, the FTSE 250 precision instrumentation
role in Retail, as well as responsibility for the transaction technologies, he has been pushing the and controls company. From 1997 to 2003 he was
corporate platforms, security and IT. boundaries of POS innovation since developing the with Marconi, becoming CFO in 2001.
first mPOS device in China in 2000.
She has a degree in Computer Science from the Hare qualified as a Chartered Accountant in 1985
University of West London and also mentors Lo has a number of patents and has contributed to with Ernst & Whinney, now part of Ernst & Young,
start-ups as an ambassador with Momentum many notable publications. and has a Bachelor of Commerce degree from
London. Liverpool University.
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1.9 POS Software: Movers & Shakers 2019

Onur Haytac Greg Dukat Paula Da Silva

Linga Revel Systems iVend Retail

CEO CEO Executive Vice President –

Global Partnerships and
Alliances

Onur Haytac founded Benseron Hospitality in 2004, Greg Dukat has more than 20 years of experience in Paula Da Silva has more than 25 years of
while studying for his MS degree in Computer the enterprise software space, serving in executive experience in information technology.
Science. In 2019, Benseron Hospitality changed its roles focused on sales and operations. He has been
name to Linga. The company’s flagship product, the chief executive for both publicly-traded and Since 2006, she has been instrumental in building
Linga rOS, includes inventory management, private technology and enterprise software iVend Retail into a global market leader in the retail
customer loyalty, online ordering, self-serve kiosks, companies. Most recently, Dukat was the Chairman, industry. She currently spearheads the recruitment
and a host of features that have revolutionised POS. President and CEO of Comverge. of channel partners to expand iVend Retail’s
worldwide footprint.
Haytac was born in Turkey, but completed graduate Throughout his career, Dukate has accelerated
school in the US. He has been recognised as a 40 growth in numerous organisations by navigating As a thought leader Da Silva has authored multiple
under 40 of Turkish-American Entrepreneurs, and growth into new markets, driving product strategy, online articles for publications like Apparel, Retail
Chairs the Advisor Council for the FGCU leading mergers and acquisitions, propelling Touchpoints, Total Retail, RIS News and
Department of Information Science. effective sales and marketing strategies, and Multichannel Merchant. Frequently invited to speak,
cultivating domestic and international partnerships. she has made appearances at Retail Now, The
He also has a BSc in Economics from Dokuz Eylül Australian Retailer Association and at Sage Partner
University. Community events.
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The value of mPOS transactions annually is expected to increase to

1.10 Forecast Summary $1.9 trillion by 2024, from a figure of $850 billion in 2019. This will be
fuelled by new use cases including pop-up stores, food trucks and street
Global POS transaction volumes will increase from 287.7 billion in 2019 vendors, where cash payments once dominated. US mPOS transaction
to 406.5 billion in 2024, with China and India as the main drivers, as cash values will also grow, following the completion of the EMV rollout and
use in these markets falls. A growing number of terminals accept new vendors such as Square offering a compelling mPOS portfolio.
payment methods such as Alipay and WeChat Pay, which are popular in
these markets. There is however a transition to QR code payments, Total annual spend on POS software by retail and restaurant businesses
which do not necessarily require a POS terminal. will reach $1.73 billion in 2024 from a 2019 figure of $1.1 billion. A key
factor is the increasing availability of app integrations, as POS software
Figure 5: Total POS Terminal Transaction Volume Per Annum, vendors expand and augment their capabilities through partnerships and
2024 (m) 406.5 Billion
consolidation. This will allow users to grow their sales with less effort and
allow more seamless financial reports through connections with account
platforms, such as Sage and QuickBooks.

North America Latin America West Europe

Central & East Europe Far East & China Indian Subcontinent
Rest of Asia Pacific Africa & Middle East

Source: Juniper Research

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Order the Full Research • Benchmark Industry Forecasts: POS device and transaction
forecasts, including volume and value projections, as well as POS
Digital Money Transfer & Remittances research provides an exhaustive, software user numbers and revenue.
independent assessment of both the domestic and international digital
money transfer and remittance markets. What’s in this Research?

With extensive insights into blockchain use, the research explores the best 1. Executive Summary & Core Findings – Top-level report
practice for service deployment, identifies optimal markets for growth, summarising market forecasts, allied to a series of key takeaways and
assesses key player capabilities and provides the most in-depth forecasts strategic recommendations (PDF).
for a range of key metrics. It also analyses the emerging suitability of
2. Deep Dive Strategy & Competition – Strategic analysis of market
blockchain as a mechanism to underpin money transfer, and the impact
dynamics, drivers and trends, together with a detailed investigation of
this will have.
key POS hardware and software vendors, via a Juniper Research
Key Features Leaderboard and Positioning Index (PDF)

• Market Analysis: Provides an extensive evaluation of the POS 3. Deep Dive Data & Forecasting – Future POS software and hardware
ecosystem, analysing the current market status across key POS prospects analysis, together with 5 year forecasts for key metrics,
segments: Dedicated POS (including Static & Portable Terminals); including transaction values via each type of POS (PDF)
Contactless POS Terminals; mPOS Terminals; Biometric-enabled POS
Terminals; POS Software. 4. Interactive Forecast Excel – Highly granular dataset comprising
more than 10,420 datapoints, allied to an Interactive Scenario tool
• Interviews: Leading POS software and hardware vendors across giving users the ability to manipulate Juniper Research’s data
the value chain interviewed including Linga, Fiserv and Revel (Interactive XL).
Systems.

• Juniper Research Leaderboard for POS Hardware: 16 leading POS

vendors compared, scored and positioned on the Juniper Research
Leaderboard including PayPal, Sage Pay, and Verifone.

• Juniper Research Positioning Index for POS Software: Analyses

11 leading POS software vendors to evaluate their respective
positioning.
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Publications Details

Publication date: December 2019

Author: Susannah Hampton

Contact: For more information contact [email protected]

Juniper Research Ltd, 9 Cedarwood, Chineham Park, Basingstoke,

Hampshire, RG24 8WD UK

Tel: UK: +44 (0)1256 830002/475656 USA: +1 408 716 5483

(International answering service)

http://www.juniperresearch.com