Use of cash varies widely, even in developed markets. However, there's been steady growth of credit and debit card use across the globe. Therefore, point-of-sale (POS) terminals are becoming more commonplace, as growth is driven by adoption of electronic payments by emerging markets.
For example, China experienced the most significant growth among the larger emerging economies during 2015, with a year-on-year increase in terminal numbers of ~20 percent. Industry analysts estimate that the global total number of POS terminals reached nearly 80 million in 2015.
Worldwide POS Transaction Growth
A new market study by Juniper Research has found that the value of contactless POS terminal transactions -- conducted in-store via cards, mobile phones and wearables -- will approach $500 billion annually by 2017; that's up from an estimated $321 billion this year.
However, the low value nature of contactless payments means that it will only represent about 5 percent of the total value of all POS transactions in 2017.
According to the Juniper assessment, the surge in contactless-enabled POS terminals in 2015, allied to retailer obligations to banks in many markets, will prompt an ongoing migration to contactless payments.
For example, Visa announced an installed base of more than 3.2 million contactless terminals in Europe, as of April 2016 -- that's up by 23 percent from 2.6 million at the end of April 2015.
Contactless terminals now account for a significant minority of terminals in many regions and, as of the end of 2015, they reached 15.3 million devices installed -- or nearly 20 percent of all POS terminals worldwide.
Outlook for Contactless POS Terminals
These numbers will increase sharply over the next 5 years, with contactless accounting for more than 2 in 3 POS terminals by 2021. The Juniper Research analyst findings pointed out that the frequency of contactless payments may indeed be limited in some markets.
"This is mainly due to the lack of widespread availability of supporting POS contactless reader terminals and also that some potential users are likely to remain cash-centric. For example, in Germany cash still accounts for around 57 percent of in-store retail transactions by value," said Nitin Bhas, head of research at Juniper Research.
Other key findings from the study include: contactless cards will represent 1 in 2 payment cards in issue by 2020. Smartphone and tablet-based mPOS terminals will handle 20 percent of all retail POS transaction value by 2021.