Research Reveals Growth and Challenges of Mobile POS
According to recent information from ReportsNReports
the global MPOS industry registered significant growth in terms of the volume of terminals in operation during 2011−2012. The number of terminals grew from 4.5 million in 2011 to 9.5 million in 2012, registering a CAGR of 111%. Competitors such as Square, iZettle, mPowa, SumUp, VeriFone, Intuit and PayPal are aiding the growth of MPOS technology by making it accessible to smaller enterprises. Over the forecast period, the volume of terminals is expected to increase from 4.5 million in 2011 to 38 million in 2017, at a projected CAGR of 42.7%, driven by growth in the retail sector, increased online trade, a rise in smartphone usage and card penetration.
Despite the penetration level of MPOS terminals to total POS terminals standing at 17% in 2012, over the forecast period, it is anticipated that this will increase substantially and reach 46% by 2017.
MPOS technology has a strong presence in countries such as the US, Canada, the UK, Germany and France with emergence of competitors such as Square, iZettle, SumUp, Payleven, PayPal Here and Intuit. Service providers such as 99Bill, Ezetap and PayPOS are considered industry leaders in China and India. All these competitors are running a number of trials and pilot programs in partnership with businesses such as Perry Ellis, Gucci, Saks Fifth Avenue and Aurora Fashions.
Large stores such as The Home Depot Inc., Best Buy, Future Shop and Nordstrom have fully adopted MPOS solutions. Restaurants, pubs and hotels such as Horney Goat Brewing Company and The Gaylord Hotels have also successfully adopted the technology. Another area which has embraced the technology is transit systems and taxi services.
The advantages of using MPOS solutions are compelling, yet there are several operational, technical and regulatory challenges. Many MPOS solutions have limited features in comparison to conventional POS terminals and these are amplified when implemented by large department stores. Reliability is another area of concern. Consumer-grade smartphones and tablets are not built with strong security features and transactions made through such devices can leave the customer vulnerable to fraudulent activity. Processing payments over a volatile wireless network can also prove to be problematic as well.
Being a relatively new technology, the development of a regulatory framework has added an element of uncertainty. For example, due to concerns over security issues, Visa stopped processing payments through the European mobile payments processing app and card readers, iZettle, because it didn't authenticate cards to Visa standards. iZettle uses digital signatures to verify the cards whereas Visa requires PIN verification.