With the recent trend of going ‘cashless’, there has been a subsequent rise in the adoption cashless digitalized payment systems. Small businesses, in particular, will serve as a vital growth platform for virtual Point of Sale terminals. This is mainly because they refrain from investing in complex hardware and systems, making virtual terminals an indispensable resource for accepting online payments. Virtual terminals have gained their very own eminence with advancements in mobile applications, and the mounting need to enhance merchant and consumer interactions. Businesses are focusing on adapting to the new digital consumer behavior by replacing traditional payment systems with virtual payment (POS) terminals.
However, with intensified competition in global markets, companies are facing challenges in terms of meeting the rising customer needs for safety and security in processing transactions. Manufacturers have used this restraint to their benefit by integrating data encryption or tokenization into their virtual payment platforms, thereby enhancing security in payment processes. These strides towards a cashless future have compelled TMR analysts to conduct an in-depth analysis of the virtual payment (POS) terminals market. In its new study, TMR highlights the key drivers and changes in consumer behavior that are unlocking growth opportunities in the industry.
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Walk through the Market’s Evolutionary Timeline
The payments industry is a complex space that has been seeing spinning transition, with numerous companies offering advanced payment options to climb up the digital space. Electronic payment terminals existed long before the Internet era, with retailers increasingly adopting solutions from hardware manufacturers such as Ingencio and Hypercom. The landscape of terminal payments completely transformed with the emergence of the internet, as it led to the inundation of new online POS terminals. This technology has seen tremendous evolution from the launch of TWINPOS G Series in 2011 to the development of TWINPOS G5100Li POS models in 2018.
With a ballooning e-Commerce industry and the emergence of multiple payment gateways, the virtual payment (POS) terminals market is anticipated to grow at a promising CAGR of ~ 28%, and reach the mark of ~ US$ 78 Bn by the end of the forecast period.
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Key Trends that are Worth Paying Attention To
Digital Wallets to Remain at the Forefront
Not only do digital payment systems offer a speedy shopping experience, but they instill a sense of security among consumers by eliminating the need to enter credit or debit card details over and over again. Moreover, digital wallet companies are increasingly providing digital wallet solutions that are easy to integrate. The e-Commerce sector, in particular, has proven to be the focal point for the growth of digital wallet solutions. Reduction in shopping cart abandonment due to cumbersome purchasing procedures is another reason for the growing consumer inclination towards digital wallets.
Expansion of Contactless Payment Terminals
With an increase in the number of services offered on mobile devices, there has been a rise in the adoption of Near Field Communication (NFC) services. This service allows the exchange of data between two mobile devices placed within a few centimeters of each other. Numerous retailers such as Macys, Walgreens, and Target have NFC-based payment terminals in place. When an NFC-integrated smartphone is held near this terminal, it automatically deducts the purchase amount from the card tied to the phone. This technology also offers additional security, as it uses a one-time code instead of the credit or debit card number. In lieu of recent credit and debit card breaches, the future of NFC solutions is expected to shine bright.
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