POS Terminals: On the Cusp of Change

Mercator Advisory Group, January 2012, Pages: 31

The POS terminal industry has entered a period of dramatic change and development. Terminals have been steadily moving to a digital format, with electronic signature capture and e-mailed receipts enabling paper free transactions. Simultaneously VeriFone and Ingenico (the two largest terminal manufacturers) have grown and a number of previously unknown companies have emerged as dominant providers in various niche markets. However, with the anticipated integration of the terminal with EMV, NFC and non-payment technologies on the horizon, the next few years in the industry promise to be a period of even greater change and development than the last.

Mercator's new report, POS Terminals: On the Cusp of Change, examines the POS terminal industry by providing an overview of recent major events and the current landscape and analyzing economic, geographic and technologic developments. In addition, the report forecasts anticipated developments for the POS terminal itself, both for the near term and further into the future. The report then compares the most advanced, currently available terminals on the market to Mercator's concept of an ideal terminal to meet all merchant needs in the next three to five years, labeled the "Canonical POS Terminal."

Highlights of the Report Include:

- A timeline of all VeriFone and Ingenico acquisitions in the past two years, with analysis of the most significant and their effects on both manufacturers

- Breakdown of POS industry developments including changes in geographical demand and an explanation for the success of some recent newcomers

- Forecast of anticipated developments over the next few years regarding the capabilities of the POS terminal, including EMV, NFC and non-payment capabilities

- Analysis of how well today's terminals will meet the future forecasted needs of merchants

- Forecasted schedule of when U.S. merchants will convert their terminals to include EMV capability

"As a result of both technological development and business model evolution, the payment transaction is losing its primacy as the most important, discrete step in the commerce transaction cycle. It is becoming embedded in the entire customer experience," says Dave Kaminsky, analyst in Mercator's Emerging Technologies Service and author of the report. "The impactat the merchant's POS terminal will be profound and must become a major planning concern for retailing and acquiring industries. Against this background, the role of the POS terminal, and those who build them, is shifting."

Table of Contents
Executive Summary
Introduction
Landscape of the POS Terminal Market

The Big Three Become the Big Two
Other Acquisitions by Verifone and Ingenico
Rapidly Developing Manufacturers
Emerging Foreign Markets

Forecasted Developments for POS Terminals

EMV
NFC
Non-Payment Based Capabilities
Tablet-Based Terminals
The Canonical Point of Sale Terminal
Transaction Origination
Cardholder Verification
Security
Software
Configurations
Comparing Existing Terminals to the CPT
Ingenico's iSC 350
VeriFone's MX880
Equinox Payment's (formerly Hypercom) L5300
ViVOtech's ViVOpay 8800

The Future of Terminals: POS in the Cloud
Conclusion

Table of Exhibits

Figure 1: Percentage of Terminals Shipped by VeriFone, Ingenico and Hypercom, Before and After VeriFone Acquisition of Hypercom
Figure 2: Acquisitions made by VeriFone and Ingenico: 2010-2011
Figure 3: Technologies Acquired by VeriFone and Ingenico by Acquisition
Figure 4: Percentage of Terminals Shipped by Region in 2000 and 2010
Figure 5: Total Terminals Shipped by Region in 2009 and 2010
Figure 6: Projected Conversion of U.S. POS Terminals to EMV and NFC Capable Terminals

- AT&T
- Bitel
- Equinox Payments
- Erply
- Facebook
- FourSquare
- Gemalto
- Google
- Groupon
- Hypercom
- Ingenico
- Intuit
- Isis
- LivingSocial
- MICROS Systems
- MasterCard
- PAX Technology
- Radiant Systems
- SZZT Electronics
- Spire Payments
- Square
- Squirrel Systems
- Starbucks
- T-Mobile
- The Nilson Report
- VeriFone
- Verizon
- Visa
- Xinguodu Technology

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