Technavio analysts forecast the point of sale (POS) terminal market in Europeto grow at a CAGR of more than 6% during the forecast period, according to their latest report.
The research study covers the present scenario and growth prospects of the POS terminal market in Europefor 2016-2020. To calculate the market size, the report considers revenue generated from the sale of POS terminals, transaction fees, and other fees such as monthly fees charged by vendors in Europe.
The POS terminal market in Europe is driven by the small and medium enterprises segment and the replacement of non-Europay, MasterCard, and Visa (non-EMV) POS terminals with EMV POS terminals by the existing end-users. As of 2015, almost 66% of POS terminals were used at fixed terminals, which will decline to nearly 57% by 2020 due to the increasing demand for mobile POS terminals
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Technavio analysts highlight the following four factors that are contributing to the growth of the POS terminal market in Europe:
- Large potential customer base
- Increasing card transactions
- Rising regulatory intervention on secure payments
- Increasing e-commerce transactions
Large potential customer base
Vendors are strategizing on targeting micro, small, and medium enterprises (MSMEs) to increase sales. A number of MSMEs still use cash as a mode of the payment transaction. Such MSMEs cite multiple banking procedures, the complexity of POS terminals, and multiple fees charged by banks as reasons for not incorporating POS terminals. However, with increasing penetration of payment cards, merchants are forced to adopt POS terminals to serve their customers better.
| Percentage share of MSMEs by major countries/regions 2015 | ||||
| China | 25.22% | |||
| India | 24.04% | |||
| US | 14.34% | |||
| Europe | 11.38% | |||
| Others | 25.01% | |||
Source: Technavio
Increasing card transactions
"The increase in the use of credit and debit cards for payment transactions by consumers is encouraging the vendors to adopt payment mechanisms involving cards. In addition, consumers are expected to use cards and digital money as a mode of payment more often than cash. This encourages mobile card readers to invest in the technology and market, with the assurance that merchants and consumers will process payments through card transactions," says Sunil Kumar Singh, a lead computing devices research analyst at Technavio.
| Payment transaction methods used by consumers globally 2015 | ||||
| Card | 56.21% | |||
| Paper | 27.54% | |||
| Digital | 16.25% | |||
Source: Technavio
Rising regulatory intervention on secure payments
Different instances of financial fraud have forced countries to set stringent regulations with respect to security standards. Regulatory bodies have imposed a rule for the recertification of electronic payment systems deployed by retailers and merchants. In Europe, the EMV liability shift rule, which was implemented during 2005-2006, mandates that the issuers and merchants should adopt EMV technology standards, failing which they will be liable to fraud charges in the case of any fraudulent transaction.
The certification of electronic systems employed by retailers, which connect to payment networks, should be obtained from card associations, financial institutions, and payment processors. "Compliance and certification have to meet the terms set by government and telecom companies. This requires the majority of retailers to change their existing POS systems to new POS systems that will help them comply with these terms. As a result, the market is seeing an increase in chip and PIN and NFC transactions, which are more secure than magnetic stripe transactions," says Sunil.
Increasing e-commerce transactions
The growing adoption of mobile devices and smartphones and rising popularity of mobile commerce are driving the growth of the e-commerce market. The market has more than 50% of online shoppers globally. They either use smartphones or tablets for shopping. While many companies are making digital sales, some are completely replacing their physical stores with the digital sales channel. The need to remain competitive, penetrate unfamiliar markets, meet increasing demands from customers, and respond to changing customer needs and business scenarios are some of the factors responsible for the rise in e-commerce websites.
Browse Related Reports:
- Global POS Terminals Market 2016-2020
- Global EMV POS Terminals Market 2016-2020
- Global mPOS Market 2016-2020
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