The Green Sheet Online Edition
June 6, 2014 • 14:06:02
The Mobile Buzz:
mPOS shaking things up
A new Smart Insights report states that shipments of tablets and smartphones to facilitate mobile POS (mPOS) transactions are expected to surpass shipments of traditional POS devices in 2016. The number of mPOS devices shipped will grow to 52.1 million in 2018, while traditional POS units will diminish by 9.7 million units in that year, representing a 30 percent attrition rate, according to Smart Insights.
The report, mPOS expansion shakes the Point of Sales Industry, takes to task traditional payments as being rigid and allowing little room for innovation. The researchers said not only did the industry make it difficult for new players to enter the market, but it also collectively had underserved small merchants for years.
"To have access to a payment terminal, merchants had to support various costs (terminal purchase and monthly maintenance fees), long-term agreements and complex pricing structures, in addition to [a] complicated enrollment process with security authorities and compliance with multiple standards," the paper said.
When smartphones and related app stores were introduced in 2008 and 2009, the game changed. Smart Insights said this new ecosystem allowed for payment startups to "create low-cost, low-friction, easy-start solutions that address the needs of individuals and small merchants."
The report noted that tablets have proven more disruptive to the marketplace than smartphones, as tablets are able to replace cash registers.
Disruptions only beginning
Smart Insights expects the Asia-Pacific region will experience the fastest growth in mPOS installations in the coming years, although the United States and Europe got a head start in mPOS adoption.
In Europe, for example, mPOS adoption is being hindered by regulations because providers have to comply with the Europay/MasterCard/Visa (EMV) chip and PIN scheme. The upside to required upgrades, such as the transition to EMV in the United States, is that the mPOS ecosystem will be more secure moving forward, noted the report.
The researchers said the mPOS industry is young and not well defined. As it matures, more disruptions may be ahead as traditional bankcards are displaced by more software-based solutions. Smart Insights cited near field communication technology, quick response codes and facial recognition coupled with GPS technology as potential future disruptors. 
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