With the recent trend of going “ cashless ”, there has been a subsequent increase in the adoption of digital cashless payment systems. Small businesses, in particular, will serve as a vital growth platform for virtual point-of-sale terminals. This is mainly because they refrain from investing in complex hardware and systems, making virtual terminals an indispensable resource for accepting payments online. Virtual terminals have gained their own notoriety with the advancement of mobile applications and the growing need to improve interactions between merchants and consumers. Businesses focus on adapting to new digital consumer behavior by replacing traditional payment systems with virtual payment terminals (POS).
However, with increasing competition in global markets, businesses face challenges in meeting growing customer needs for safety and security in transaction processing. Manufacturers have used this restriction to their advantage by integrating data encryption or tokenization into their virtual payment platforms, thereby improving the security of payment processes. These advances towards a cashless future have compelled TMR analysts to conduct an in-depth analysis of the Virtual Payment Terminal (POS) market. In its new study, TMR highlights the key drivers and changes in consumer behavior that are opening up growth opportunities in the industry.
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Explore the evolving timeline of the market
The payments industry is a complex space that has undergone a pivotal transition, with many companies offering advanced payment options to step up into the digital space. Electronic payment terminals existed long before the Internet age, with retailers increasingly adopting solutions from hardware manufacturers such as Ingencio and Hypercom. The payment terminal landscape has completely transformed with the emergence of the Internet, which has led to the flood of new online point of sale terminals. This technology has undergone considerable evolution from the launch of the TWINPOS G series in 2011 to the development of the TWINPOS G5100Li point-of-sale models in 2018.
With a booming e-commerce industry and the emergence of multiple payment gateways, the Virtual Payment Terminal (POS) market is expected to grow at a promising CAGR of ~ 28%, and reach the mark of ~ 78 billion USD at the end of the forecast period.
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Main trends that deserve special attention
Digital wallets will remain in the foreground
Not only do digital payment systems provide a fast shopping experience, they instill a sense of security among consumers by eliminating the need to enter credit or debit card details over and over again. In addition, digital wallet companies are increasingly offering digital wallet solutions that are easy to integrate. The e-commerce sector, in particular, has proven to be the focal point for the growth of digital wallet solutions. Another reason for the growing inclination of consumers towards digital wallets is the reduction in cart abandonment due to cumbersome shopping procedures.
Extension of contactless payment terminals
With the increase in the number of services offered on mobile devices, there has been an increase in the adoption of Near Field Communication (NFC) services. This service allows the exchange of data between two mobile devices placed a few centimeters from each other. Many retailers such as Macys, Walgreens, and Target have implemented NFC payment terminals. When an NFC integrated smartphone is located near this terminal, it automatically deducts the purchase amount from the card linked to the phone. This technology also provides additional security, as it uses a one-time code instead of the credit or debit card number. Instead of recent credit and debit card breaches, the future of NFC solutions should shine.
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