Manufacturers Challenged to Stay Profitable as EMV Migration Has Not Been Keeping Pace with Expectations
Although Europay, MasterCard, and Visa (EMV) migration greatly boosted sales of electronic funds transfer point of sales (EFT POS) terminals in Western Europe, Latin America, and parts of the Asia Pacific, the pace of migration slumped due to many reasons. These include a lack of business case in places such as the United States, need for expertise, and unanticipated high investment requirement in infrastructure. The introduction of low-cost terminals in the EFT POS market has also threatened the profitability of the industry. To make up for the drop in sales, major manufacturers are focusing on providing attractive features such as software rather than just offering low-priced equipment.
This Frost & Sullivan research service explores the current EFT POS terminal market in all the main geographical regions and analyzes the drivers and restraints that could influence the market shares of global manufacturers in future. Expansive forecasts for the total EFT, wireless, and smart card terminals market are also provided. This can help participants address the growth potential of these markets and cash in on emerging opportunities.
Uptake of New Technologies to Drive Further Changes in the Market
Technological changes in EFT products in the areas of contactless technology using radio frequency identification and wireless technology are expected to appreciably promote market growth in future. Using transmission control protocol/Internet protocol (TCP/IP) for payment settlement because of the industry’s ongoing quest for faster payment transaction rates is also likely to improve sales. TCP/IP technology for payment terminals offers substantial competitive advantages such as ‘always-on’ capability, faster speed, and versatility.
"TCP/IP is a great enabler of multi-applications and this technology also makes it very simple to get different hosts for various applications," says the analyst. Despite being TCP/IP-enabled, the middle tier and even tier III are expected to adopt these terminals, thus promoting sales. The EFT terminal market is also likely to receive a significant boost with many countries, especially in Central and Eastern Europe, charting out an EMV migration implementation plan.
Technologically Advanced Products to Increase Market Share and Profitability
Several technological changes are ensuring that EFT POS terminals come with enhanced value-added features and hence, no longer remain just commodity products. "Manufacturers of EFT POS terminals are investing in new technologies that could lead to improvement in sales in traditional consumer segments and a possible re-terminalization of the market," notes the analyst. This, along with industry’s focus on providing greater customer service, is expected to generate far greater revenue. While the major global manufacturers have already adopted this strategy, tier II and tier III manufacturers are likely to take to it as well, in future.
Some companies have been very creative in introducing capacitive and electrostatic print technology in their terminals. Newly developed architectures also provide security, compatibility, reliability, and scalability toward new technologies such as Java and Bluetooth.
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