POS Hardware Market to Reach 218.15 Bn by 2033 on Retail Digitization Trends and Booming Electronic Payments

Market Overview

The POS Hardware Market size is expected to reach 218.15 Bn by 2033, up from its current value of 95.6 Bn in 2023, growing at an annual compound growth rate (CAGR) of 8.6% from 2023-2033. POS hardware includes products like displays, barcode scanners, card readers, printers, tablets, and other hardware used at point-of-sale terminals. The growth of this market is driven by factors such as rising electronic payments adoption, need for digital receipts/invoices, integration of POS with inventory management & accounting software, and increased data analytics needs for understanding customer behavior.

North America led the POS hardware market with over 35% market share in 2022, driven by high usage rates of payment cards, tablets, and mobile POS. Rapid growth is expected in Asia Pacific at a CAGR of 8% through 2033, attributable to booming retail sector and government tax reforms mandating invoice-based accounting for SMEs across China, India, and Southeast Asia. The market is competitive with hardware manufacturers like Verifone, Ingenico, MICROS Systems, NEC Corporation, and PAX Global Technology dominating.

Key Takeaways

• Global POS hardware market valued at $95.6 billion in 2023, expected 8.6% CAGR from 2023-2033
• North America accounts for over 35% market share currently
• Asia Pacific to witness rapid 8% CAGR till 2033
• Rising electronic payments adoption driving market growth
• Need for digital receipts/invoices also fuelling demand
• Data analytics needed for understanding customer behavior growing
• Verifone, Ingenico, MICROS, NEC Corp, PAX Global lead market
• China, and India tax reforms to mandate invoice accounting to boost regional growth

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Regional Snapshot

North America is the largest region in the global POS hardware market with over 35% market share. High usage rates of payment cards, tablets, and mobile POS devices across both retail and hospitality sectors are driving hardware adoption. US and Canada lead, aided by mature payment infrastructures, high mobile wallet adoption by millennials, and advanced analytics integration for inventory and sales tracking.

Europe accounts for the second highest share, with contactless payments gaining traction across countries like the UK, France, and Spain post-pandemic due to hygiene awareness. Additionally, markets like Germany, and the Nordic region reflect high technology integration for modernizing POS infrastructure across domains.

Asia Pacific region will witness the highest CAGR of 8% through 2033. Key growth factors include rising middle-class disposable incomes and retail sector expansion across China, India, Indonesia, and the Philippines. Large unorganized SMBs and SMEs are the target customer base for affordable POS solutions. Government tax reforms in China and India mandating invoice-based accounting over 2023-25 will necessitate POS hardware upgrades to issue digital GST invoices.

Drivers

Increasing Electronic and Mobile Payment Adoption

Globally, there is a growing shift from cash to electronic payment modes like cards, mobile wallets, and contactless payments. Payment service providers are consistently launching payment acceptance solutions with value-added capabilities. This is expanding the addressable market for complementary POS hardware like card readers, payment terminals, mobile POS devices tablets capable of accepting various payment modes.

Integration of Inventory Management and Accounting Software

POS systems are getting integrated enterprise-wide with inventory management, accounting software, CRM systems, and databases. This provides centralized control and a unified view of operations. But it also necessitates upgraded, compatible POS hardware. Retailers and restaurants are modernizing POS infrastructure across franchises and stores to enable integrations that allow inventory tracking, financial reporting, and sales insights via analytics.

Restraints

Cybersecurity and Data Compliance Risks

As POS systems handle sensitive customer payment information, data breach or cyberattack risks necessitate upgraded hardware with end-to-end encryption capabilities, tokenization, secure processing certifications, and anti-tampering protections. This leads to recurring hardware replacement costs for merchants from both software and hardware perspectives. Compliance needs related to PCI standards also impact hardware deployment.

High Upfront Costs for Advanced POS Hardware

Although POS hardware aids efficiency over the long term, it requires significant upfront costs which can constrain adoption by smaller independents and cost-sensitive merchants. Advanced POS hardware with mobility, security protections, failover support, and backup power also costs more. Aftersales maintenance costs are also attached for premium devices. Although prices are declining gradually, the perceived total cost of ownership remains a key restraint.

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Opportunities

Favorable Government Digitalization Policies

Governments across regions are undertaking initiatives, tax reforms, and investments aimed at digitizing merchant ecosystems. For instance, India's 'Digital India' program focuses on expanding digital payments acceptance infrastructure across Tier 2/3 cities through fiscal benefits, low-cost modes, etc. Similarly, China, Canada, Indonesia, and Brazil have electronic invoice mandates in place or upcoming - providing compliance-driven hardware upgrade opportunities.

Emerging Use Cases Across Hospitality, Healthcare Verticals

While retail dominates POS hardware demand currently, emerging use cases across hotels, restaurants, healthcare, and transportation sectors are expanding the market. Demand for self-ordering kiosks, kitchen display systems, mobile tablets for bedside ordering/payments in hospitals, and contactless systems for travel industries is rising. This necessitates tailored, specialty POS hardware to enable operational transformation.

Challenges

Meeting Customization and Integration Needs

The expectation is for POS hardware to seamlessly integrate with existing backend infrastructure spanning payment gateways, inventory databases, accounting systems, etc. This necessitates customization of hardware specifications during procurement by merchants - increasing design, delivery, and support efforts for suppliers. Meeting needs across different verticals adds complexity to hardware manufacturing.

Adherence to Stringent Regulatory and Security Standards

POS hardware vendors and merchants need to adhere to nation-specific standards encompassing data security, communications protocols, device certifications, transaction guidance advisory, etc issued by governance bodies. This makes product development complex and necessitates localized variants. Changing standards like PTS module updates also means redesign and recertification efforts. Cybersecurity preparedness necessitates regular firmware and hardware security hardening as well which adds overhead.

Market Segmentation

By Type
• Wireless POS Equipment
• Mobile POS Device
• Fixed POS Device

By Application
• Retail
• Hotel and Catering
• Others

Key Players

• Ingenico
• Verifone
• NCR
• Pax Technology
• NPT
• NEWPOS
• NEXGO
• Centerm
• Castles Tech
• CyberNet
• Bitel
• SZZT

Key Questions

1. What was the market size of global POS hardware in 2022?
A. The global POS hardware market was valued at $95.6 billion in 2022.

2. Which region accounts for the largest market share currently?
A. North America accounts for over 35% of the POS hardware market currently.

3. What growth rate is expected from 2023-2033?
A. The market is projected to grow at a CAGR of 8.6% from 2023 to 2033globally.

4. What is driving the adoption of POS hardware?
A. Key drivers are rising electronic payments, the need for digital invoices/receipts, inventory/accounting systems integration, and customer analytics.

5. Who are some key POS hardware manufacturers?
A. Verifone, Ingenico, MICROS Systems, NEC Corporation, and PAX Global Technology are key hardware suppliers.

6. What emerging verticals show promise for POS hardware?
A. Hospitality, healthcare, and transportation sectors will drive future opportunities.

7. What challenges does the market face?
A. Customization needs, security standards adherence, high costs and cyber risks pose key challenges.

Related Report:

Smart POS Software System Market: https://theresearchdeck.com/report/smart-pos-software-system-market/

POS Printers Market: https://theresearchdeck.com/report/pos-printers-market/

Fixed POS Terminal Market: https://theresearchdeck.com/report/fixed-pos-terminal-market/

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