by Dominika Galusa

The payment industry appeared to be very traditional, without any place for innovation. The emergence of the smartphone ecosystem with apps in 2008, contributed dramatically to decrease the entry barriers for FinTech innovators allowing them to create alternative, and low-cost solutions for individuals. Smartphones and tablets offer a variety of functions that create a lot of possibilities for the payment industry. Now when every operation of the small merchant can be made by just an iPad, the competition grows as the various players seek for the highest market share.

What is mPOS?

mPOS devices are usually mobile or a tablet devices with a dongle attached to the headphone socket or docking port. It can also be a wireless credit card terminal accepting various types of credit and debit cards. Using the downloadable payment app on the tablet with a payment hardware add-on is even more disruptive since it replaces an old cash register. The acquisition of this kind of system is easier and cheaper than the old one, so it is a perfect choice for many small merchants.

The rapid growth of mPOS market

The latest Smart Insights Report about the mPOS expansion analyzes the dynamics of this sector’s business. mPOS shipments are expected to keep growing in the next years at a CAGR of 40% between 2013 and 2018, leading to 52.1 million mPOS units to be shipped in 2018.

Credit Card Companies and mPOS

Over the next six years, the payment industry is believed to push the growth of the mobile or tablet-driven payments to reach a value of $5.4 billion by 2018.

Card terminal companies should partner up with mPOS and POS

The mPOS industry has been attracting numerous new entrants, who propose a wide palette of services and business models.

— Thierry Spanjaard, CEO of Smart Insights

As the industry expands, consumers (as well as companies) will demand more large-scale solutions than the current mPOS players offer – credit card acceptance will be not enough to compete. As PYMTS.com report states, the mPOS providers will have to extend their offering beyond the mobile payment processing, and introduce full retail management service: inventory, staff management, invoicing and more.

Visa for example, has already noticed the potential mPOS has. According to their study “2020 Foresight: Mobile Point Of Sale Technology, Timetric, April 2013,” acquirers have seen a return of investment (ROI) in less than one-third time of traditional POS solution – and mPOS can be a fraction of the cost.

And as added value, mPOS systems allow retailers to engage with their customers more, take transactions from anywhere on the store floor and allow them to make the shopping experience much more convenient for their consumers.

— Rebecca Borison, an editorial assistant on Mobile Commerce Daily, New York

Adding mPOS to the business may require additional financing, so there must be the potential for the value-added services. When customers use mobile features such as location check-in or location-based services that generate customer data for analysis, the retailer is provided with data to enhance customer relationships as well as improve transaction experiences.

All in all, more and more merchants choose to work with intelligent POS or mPOS. This is a huge opportunity for all card terminal companies to accelerate sales, elevate service and boost revenue.

Who are the POS innovators with a huge potential to work with terminal card companies?

We have picked three most promising POS providers in different market regions.

1.      Lightspeed in Canada

Lightspeed has focus on the medium-sized companies and retailers who usually have a full in-store setup. Its customer base is slowly broadening, including large customers such as Adidas, and expecting to grow rapidly. In September this year, the company raised up $61M to boost its retail and restaurant sales system.

2.      Shopbox in Denmark

Shopbox wants to empower small business owners with the best possible tools to manage their business. This year, thanks to the partnership with the biggest Scandinavian bank – Nordea, Shopbox will help thousands of merchants in Denmark.

3.      Hiboutik in France

Hiobutik operates in French and Spanish speaking countries. The system is for free, without fees nor any trial periods. For those customers who require monthly or yearly monitoring, it offers special dashboard and accounting option just for 10Euros per month.

CONCLUSION

The mPOS market is growing rapidly, and there is no doubt that it will bring a lot of new players. It is important for all card terminal companies to consider cooperation with the most promising Fintech innovators in order to reach as many customers as possible in a short amount of time.