As you walk into a store today, you are increasingly likely to pay for your items with a fancy payment processing machine rather than a traditional cash register. That’s due to big changes in the market for point-of-sale (POS) machines, which will reach a value of more than $ 138 billion in the next few years, according to a new report.
A POS is a system that processes card payments. The technology reads the magnetic stripe on a customer’s card to verify, and then process, the payment to the merchant. These machines have been around for decades, and for a long time they took the form of a typical cash register. However, the technology has evolved in recent years both in terms of its appearance and capabilities.
Today, there are multiple different types of POS machines, including hardware known as terminal POS systems, tablet POS systems, mobile POS systems, and online POS systems. There has been a recent trend away from hardware and towards software. This means that payments can now be processed through small pieces of hardware connected to phones or tablets, in addition to larger pieces of equipment.
POS systems are also more sophisticated than ever, and many perform a broader range of functions, including streamlining access to sales information and other critical accounting and management materials.
The market was worth around $ 75.5 billion in 2020, according to the Global Industry Analysts market study. With the impact of the COVID-19 pandemic included in the projections, the report estimated that the market will reach $ 138.1 billion by 2026. This will follow years of expansion at a compound annual growth rate (CAGR) of 10.3 %, a significant number. All in all, the market will have increased in value by approximately 83% in six years according to projections.
The fixed POS terminal is expected to see one of the biggest growth, with around 13.5% during the analysis period. This segment alone will reach $ 38 billion by 2026, depending on the forecast period. Meanwhile, some of the largest geographic markets will be the United States, which is already worth more than $ 22 billion, and China, which is forecast to hit $ 28.2 billion in five years. Japan and Canada are other notable markets, with a projected CAGR of 7.1% and 8.9%, respectively, as is Germany with a CAGR of 8.1%.
The evolution of the POS machine market has spawned numerous new and growing businesses in recent years. The market report highlights a number of large companies in this industry, including Castles Technology, Cybernet Manufacturing, Mitsubishi Electric Corporation, Newland Payment Technology, PAX Technology, Toshiba Corporation, and VeriFone Systems.
Among some of the larger companies to emerge recently is Square, a California-based company founded by Twitter co-founder Jack Dorsey along with fellow entrepreneurs Jim McKelvey and Tristan O’Tierney. The company produces a sleek little card reading device that has helped the company accumulate a market capitalization of more than $ 110 billion (shares are currently trading at $ 247.05 each).