Comprehensive, 2015, U.S. Market Analysis of POS Terminals and EMV & NFC Status Review

After the major data breach that happened last year at Neiman Marcus,Target, Sally Beauty, Michaels, Home Depot, U.S. retailers have taken notable measures towards data security. Shifting to EMV is one such notable measure. The only major market which had low EMV adoption is now changing rapidly. Now, EMV is gathering steam in the U.S. before the liability shift in October 2015.

In a report recently published by GrowthPraxis, it is expected that the installed base of EMV terminals in the U.S. will reach around 65% by the end of 2020, while the installed base of mobile POS terminals is expected to reach 8.8 million by 2020. The report also projects the number of NFC terminals till 2020. The demand of NFC terminal has spurred in last few months after Apple launched their NFC-based mobile payments system (Apple Pay). Samsung will also be launching their mobile payments system shortly.

In the U.S. there are more than 33 million merchant establishments (single business location of a company which is engaged in a single activity). The retail and hospitality sector has around 7 million merchant establishments with more than one employee and there are about 13 million micro merchants who also belong to this category. GrowthPraxis has not considered merchant establishments under the agriculture, forestry, mining and manufacturing sector.

In this study conducted by the research team at GrowthPraxis, the installed base of POS terminals is estimated to be approximately 12.7 million excluding mobile POS. The Installed base of POS Terminals with tier I and II retailers is around 4 million. However tier I and II retailers contribute to 75% of the payments transaction.

EMV POS terminal adoption by various merchant categories varies drastically. The specialty, mass merchants &grocery category and pharmacy/drug store category are leaders in the adoption of EMV POS with a penetration rate of more than 60% by the end of 2014.On the other hand, gasoline station merchants who enjoy a buffer time of two additional years for the liability shift have the lowest adoption rate of EMV. The adoption rate is still a single digit number. Regarding EMV adoption, we got a mixed response from hotels and restaurants. Many QSRs are reluctant to shift to EMV. They say that the average transaction volume is much lower as compared to specialty, mass merchants &grocery category therefore they feel that the probability of a data breach is significantly low.

When it comes to mobile POS systems, the others category which includes micro merchants are the largest adopters, primarily due to adoption of mobile card readers. Although the EMV and NFC adoption was very low till the end of 2014, micro merchants have also given us a hint that they will be moving to EMV and NFC in the next few years. Thus the EMV and NFC adoption rate is expected to significantly in next five years.

Key Questions the Report Answers:

  • What will be the demand of conventional POS terminals, EMV terminals and NFC terminals by 2020?
  • What is the installed base of POS terminals with tier I, II and III retailers? What is their contribution to the total payments transaction?
  • What will be the installed base of POS terminals in the U.S. by categories like speciality and grocery store, convenience/gas stations, pharmacy/drug store, department stores, hotels, &restaurants and entertainment? What percentage of POS terminals will be EMV and NFC-enabled (by categories)?
  • What is the average age of POS, average POS Terminals-per-store by category? The top ten merchants which has the maximum number of installed POS terminals by category.
  • What is the market share of POS terminal manufacturers in each category? What is the market share of POS terminals by OS?
  • What will be the installed base of EMV, NFC and mobile POS terminals in the U.S. by 2020?

Table of Contents

  1. Project Methodology and Definitions
  2. The POS Terminal Market in the U.S.
    • S. new terminal deployment (Conventional/EMV/NFC)
    • S. new terminal deployment (Mobile POS)
  1. Gross Transaction Value of Retail Payments in the U.S.
  • Transactions at merchant locations ($ trillions)
  • Emerging payments – Transactions at merchant locations ($ billions)
  1. Installed Base of POS Terminals in the U.S. (2015)
  • Installed base of conventional POS terminals and transaction value
  • Installed base by sub segments
  • Average age of POS terminals
  • Average number of POS per store
  • Top 10 retailers by number of POS terminals
  • Market share of POS terminal manufacturer
  • Market share of POS terminal by OS
  1. Projected Installed Base of POS Terminals in the U.S. (2020)
  • Projected NFC terminals till 2020
  • Projected EMV terminals till 2020
  1. Recent Trends – Adoption of POS by Top Retailers

Sample Charts