And there's one technology that seems poised to become the next big thing for merchants in the United States, as it has for much of the global community. That's the fast-evolving mobile wallet.
Much of the impetus for this payment strategy comes from emerging markets around the world where smartphone adoption is high and cash is riskier to carry, takes time to access, and is often more expensive than other payment options.
But with mobile wallets in the United States still in their infancy, research shows that most early adopters come from higher income brackets and almost half (49 percent) are between the ages of 25 and 44. That means that merchants must have technology in place in order to accept these payments or risk consumers spending their dollars elsewhere.
Why mobile wallets matter to the POS market
For business owners, mobile wallets represent more than just a revolutionary way to complete a payment transaction. The technology improves payment security, eliminates the need to introduce consumer payment card data into the merchant's POS system, tells marketers more about what individuals are buying, and reduces the length of a customer transaction. Here's what you need to know:
Mobile wallets improve card security. Instead of entering the consumer's personal account number into the POS during a transaction, mobile wallets use a token as a proxy for the actual credit card number.
Merchants win with reduced PCI compliance. When customer account numbers from mobile wallets are never introduced into the POS system, the business owner faces a smaller PCI DSS compliance scope.
Business owners know what individual customers buy. When consumers purchase with cash or a card, merchants generally can't match buying habits with specific individuals unless a loyalty card is involved. But when customers present a card via a mobile wallet, data is available, giving business owners information for future one-to-one marketing efforts.
Customer throughput increases. Mobile wallet transactions generally use near-field communication technology or QR codes in order to complete purchases. That means that with a simple Tap and Go, wave, or quick scan, the customer is out the door, and the merchant is ready to serve the next person in line.
As the POS market continues to diversify and expand, merchants of every size are finding products that better fit their business model and their budget. And with growth in mobile payment transactions expected to rise 210 percent in 2016, and almost one in five (19 percent) of smartphone users adopting mobile wallets, it's likely that more business owners will be investigating the next big thing in payments.
What new developments do you see on the horizon for the POS market?