While global shipments of POS and ATM terminals are expected to increase by about 50% over the next five years, the number of cellular embedded modules that are used to connect these terminals to financial institutions will increase approximately fivefold in the same period. This ratio highlights a strong and growing trend to equip POS/ATM terminals with cellular connectivity.

 Although there are about 30 vendors of point-of-sale and ATM terminals worldwide, just three of them – Hypercom, VeriFone, and Ingenico – account for some 70% of the market. According to ABI Research senior analyst Sam Lucero, the fact that all three are solidly committed to the introduction of wireless technology gives a tremendous boost to cellular’s penetration of this market.

However, such extreme market consolidation complicates life for embedded cellular module vendors. “Having 70% of the market controlled by just three ATM/POS terminal vendors drastically limits the available pool of customers for module vendors,” says Lucero. “To be in that business, you virtually must have one of those three as a customer, and margins are tight. That’s a difficult position to be in, although fortunately none are completely dependent on the POS sector.”

Nonetheless, the clear advantages of cellular connectivity are proving persuasive. It allows greater flexibility in deployment and better functionality with faster service and better management. In emerging markets, it can overcome a lack of wired infrastructure.

It also allows for bundled services: terminal vendors are bundling the communications service along with the sale or lease of a cellular-enabled POS terminal. That makes it convenient and streamlined for business customers.

In fact the “big three” are going a step further, launching their own connectivity services. They, in turn, become important customers for M2M-oriented cellular service providers and further reinforcing the cellular trend.

Source:cellular-news