Due to increasing consumer demand and improved supporting technology, including a new wave of fully featured, yet cost-effective payment terminals that use cellular connections, the strong, connected POS and vending equipment markets are expected to continue to expand:
- Cellular POS terminals are expected to grow to $80 billion by 2026, up four-fold from 2020
- The smart vending market is expected to grow from $30 billion in 2024, up from $1 billion in 2017
Both markets include a wide variety of businesses, from single-person merchants using payment terminals using wireless 3G connectivity to businesses with POS terminals across several locations and operators with fleets of vending machines in their stores.
Wireless serves more than POS
The wireless connectivity is used not only for payments, but also to determine when smart vending machines have low supplies of certain products, and to track sales to replace slow-moving products with ones more likely to generate sales.
Whether it’s a single-person business, a merchant with hundreds of machines, or something in between, they all require low-cost, secure connectivity to maximize their profitability and thwart potential fraud.
For many years many micro-merchants have avoided adopting POS systems due to a combination of issues, including high costs, long-term contractual commitments, restrictive user interfaces, and the Payment Card Industry Data Security Standard (PCI DSS).
Yet those issues are being overshadowed by the benefits available from mobile POS (mPOS) technology. There are more than 70 active mPOS terminal providers. The market has grown as merchants and consumers alike embraced non-cash payments as never before during the height of Covid-19. Though the pandemic has waned in many parts of the world, consumers and merchants that moved to non-cash transactions will continue that practice going forward, with only a small number of transactions returning to cash.
According to Berg Insight, the attach rate for NFC in the mPOS segment rose to 69% in 2020, with shipments of mPOS terminals reaching 26.9 million. Shipments are expected to expand at a 11.7% CAGR, reaching 46.7 million units by 2025.
Cashless vending machines, a rarity only a few years ago, have become commonplace as consumers carry less cash. Most consumers have smartphones and non-contact payment cards that they can use with the newer machines and make other mobile purchases.
The newer machines accept non-cash payments and gather data on user choices and machine performance to provide products better matched to consumer desires. Additionally, advances in artificial intelligence enable cost-effective intelligent vending to be rolled out for a variety of use cases and market sectors.
Research firm Technavio expects the intelligent vending machine market to expand at a CAGR of 22% through 2024, with more than one-third (38%) of the growth to come from the North American market, with the biggest opportunity in the beverage market.
Connectivity Critical to Support Growth
While the above growth projections and the theories behind them are all solid, they all depend on reliable, secure, cost-effective connectivity to become realities.
Most smart vending machines and POS systems today operate on 4G/LTE, WiFi, or wired ethernet connections. Some systems are still operating with slower 3G technology, but will likely be replaced soon.
Many wired solutions will also be replaced because wireless connectivity enables easy relocation of devices without the need for wires.
For the best wireless connectivity, choose wireless modules that can be easily integrated into POS and smart vending machines. The modules should offer multiple-input, multiple-output technology that helps minimize errors while also optimizing data speeds. The modules should support a wide range of interfaces, including LCM, camera, touch panel, MC, SPK, UART, USB, I2C, and SPI.
In addition to modules, POS devices also rely on reliable, low-power antennas that use cellular, WiFi, Bluetooth, or GNSS connections.
For the best results, seek a single provider for both antennas and modules to ensure ease and reliability of integration.
LTE is the best connectivity solution for both the mPOS and smart vending markets. It provides secure, robust bandwidth at a low cost. 5G technology is more advanced, but is limited in availability compared to LTE, a situation that will continue for many years. Rather than wait until the 5G technology is readily available, the mPOS and smart vending market can take advantage of the available LTE connectivity today.