The installed base of mPOS devices is set to increase fivefold over a five-year forecast period, reaching the 51 million mark in 2019, or 46% of the overall POS, finds ABI Research. The increase in uptake is not just being driven by micro-merchant adoption, as mPOS vendors are increasingly focused on mPOS penetration higher up the value chain. Other mid-sized merchants and even large retailers are looking towards mPOS to provide new acceptance capabilities, enablement or extension of added value services, while improving in-store mobility levels.
Questions remain around the business viability of mPOS and if it can be a profitable and sustainable business. Which vendor type most capable of making a success out of mPOS is still up for debate? Will it be mPOS specialists such as Square or Intuit, acquirers expanding payment capabilities and services, financial institutions, or new entrants such as MNO’s or e-commerce specialists?
Despite market uncertainty market belief remains and investment continues to flow. iZettle is the most recent vendor to attain a $56 million financial injection with POWA, another vendor who in 2013 received $76 million in outside funding. Although these seem like high value investments into a market which is still to find its feet, investors are not just capitalizing on revenues generated by mPOS devices and transactions. The bigger eco-system picture includes e-commerce, added value and cash register platforms.
Senior analyst Phil Sealy comments, ”The mPOS market does present a substantial opportunity for not only the expansion of point of sale solutions by those vendors already active but also by new OTT players who could come into the payments space using mPOS as an entrance point. There has been much said about the cannibalization of the traditional POS market, but ABI Research believes that both traditional POS and mPOS can grow together in tandem, co-existing, expanding the presence of digital payment acceptance. There will always be a need for traditional POS solutions driven by large fixed lane checkout applications, but equally there will be merchants looking at simpler cost-effective solutions with added value services.”
These findings are part of ABI Research’s Payment and Banking Cards & Contactless Technologies Market Research.
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