The POS (point of sale) and vending equipment markets are forecast to grow hugely, due to increasing consumer demand and improved supporting technology including new fully featured yet cost-effective payment terminals. In fact, says Neset Yalcinkaya, VP of products / GM of NA R&D Centre at Quectel Wireless.
- It is expected that the UK market will grow at a CAGR of 10.7% during 2022-2032 with regards to Cellular POS terminals, and the UK POS software market is expected to reach US$1.05 billion by 2028.
- The global smart vending market is expected to reach $146.6 billion (€145.46 billion) by the year 2027.
Both markets include a wide variety of businesses, from single-person merchants using payment terminals with wireless 3G connectivity, to businesses with POS terminals across several locations and operators with fleets of vending machines in their stores.
Connectivity not just for payments
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 brand with hundreds of machines, or something in between, they all require low-cost, secure connectivity to maximise their profitability and reduce the possibility of fraud.
For many years many micro-brands 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 brands 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 brands 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 near field communications (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 an 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 contactless cards that they can use with the newer machines and make other mobile purchases.
Cost-effective intelligent vending
The newer machines accept non-cash payments, gather data on user choices and machine performance to provide products better matched to consumer desires. Additionally, advances in artificial intelligence (AI) 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.
The key to growth lies in critical connectivity
While the previously mentioned 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, Wi-Fi, 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.
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 minimise errors while also optimising 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 depend 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.
The author is Neset Yalcinkaya, VP of products / GM of NA R&D Centre at Quectel Wireless.