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NFC-ready POS terminals shipments to surge

Regina Pazvakavambwa
By Regina Pazvakavambwa, ITWeb portals journalist.
Johannesburg, 17 Nov 2016
More than 77% of the world's POS terminals will be NFC-ready in 2020, up from 46% in 2016, says Berg Insight.
More than 77% of the world's POS terminals will be NFC-ready in 2020, up from 46% in 2016, says Berg Insight.

The market for near-field communication (NFC)-ready point of sale (POS) terminals continues to show strong momentum in 2016 with annual shipments anticipated to reach an estimated 16.1 million units worldwide.

This is according to analyst firm Berg Insight's recent report: POS Terminals and Wireless M2M, which notes the attach rate for NFC was highest in the Europe and North America, where 93% and 92% respectively of the POS terminals shipped featured NFC.

The study says NFC was also a very popular feature in many other markets worldwide, including Brazil, Turkey and China.

On a global basis, almost three out of every five POS terminals shipped in 2016 included NFC, it added.

The global installed base of POS terminals grew to almost 90 million units in 2015, says Berg Insight. Market growth is primarily fuelled by the increasing adoption of electronic payments in emerging markets. Developed markets are relatively saturated in terms of POS terminal adoption, it adds.

Berg Insight predicts the global installed base of NFC-ready POS terminals will grow at a compound annual growth rate (CAGR) of 17.9% from 45 million units in 2016 to 86.9 million units in 2020.

As a result, more than 77% of the world's POS terminals will be NFC-ready in 2020, up from 46% in 2016, it says.

Mobile point of sale

However, according to the study, while the installed base of NFC-ready POS terminals has grown quickly, the contactless technology has in many cases not been activated.

This is now changing, says Berg Insight, which estimates that approximately 15 million POS terminals accepted contactless payments with Visa payWave, MasterCard PayPass or UnionPay Quickpass in mid-2016.

"The M-POS (mobile point of sale) terminal market is growing faster than the traditional POS terminal segment and there are more than 80 vendors active on the global market today," says Johan Fagerberg, senior analyst at Berg Insight.

M-POS is the use of consumer-oriented mobile devices such as tablets and smartphones that function as a point-of-sale terminal to facilitate payment card transactions through a connection to a card-accepting reader.

Juniper Research predicts the number of consumers making contactless payments via their mobile handsets will reach 148 million this year, with Apple and Samsung together accounting for nearly 70% of new customers.

Grand View Research estimates the M-POS terminals will grow at a CAGR of over 18% from 2016 to 2024.

It says the ever-changing consumer expectations, rising debit or credit card payments, and sophisticated data analytics are projected to fuel demand for the mobile point-of-sale terminal.

The attach rate for NFC in the M-POS segment is anticipated to reach 45% in 2016 as NFC-ready M-POS terminal shipments reach 8.2 million units, says Fagerberg.

Berg Insight forecasts global shipments of NFC-ready M-POS terminals will grow at a CAGR of 41% in the next four years to reach 32.4 million units by 2020.

"The growth is driven by the increase in M-POS terminal shipments from 18 million units in 2016 to 42.3 million units in 2020, as well as by a growth in the attach rate from 45% to 77%."

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