India POS Terminals Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

India POS Terminals Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The India POS Terminals Market is expected to register a CAGR of 7.23% over the forecast period (2022-2027). As per the Reserve Bank of India (RBI) dataset, 61.69 lakh POS terminals were recorded as of May 2022. The COVID-19 pandemic created a demand for contactless payments, increasing the need for POS terminals equipped with NFC, RFID, and other technologies accepting payments from contactless chip cards or digital interface cards.

Key Highlights

• Evolving consumer preferences, technological advancements, and regulatory and governmental changes, the world of payments have been changing dramatically. With individual goods taking the lead in transforming the Indian payment landscape, India is keeping up with these developments and has experienced extraordinary growth.
• Further, the Reserve Bank of India (RBI), the government, and other ministries have put out continuous effort and commitment, which has resulted in the exponential expansion of digital payments, with many of the innovations generating attention on a global scale. Along with card payments, the Aadhaar enabled Payment System (AePS), Unified Payments Interface (UPI), Immediate Payment Service (IMPS), QR-based payments, and National Electronic Toll Collection (NETC) have been the main factors in steadily transforming the cash-based economy towards a less-cash economy.
• Most transactions made at merchant locations are handled by the card industry and its infrastructure for acceptance. At the current time, India is significantly dependent on foreign nations for the import of point-of-sale (PoS) terminals, which comes at a high cost to the purchasing community.
• The POS terminal market in India is being driven by a number of factors, including rising demand for mobile POS terminals, rising acceptance of mobile wallets, favourable legislation, expanding e-commerce and the entry of new businesses, rapid urbanisation, and technical innovation.
• However, the shortage of adequate PoS terminals on the market restricts future industry expansion. High installation and maintenance fees, security issues related to theft, and other related expenditures further impede the market's steady expansion.
• The import of PoS terminals from other nations has been hampered as a result of the ongoing COVID-19 outbreak. into a cash-less, digital payment-based economy. As per Times of India news, in the fourth quarter of 2019, ATM withdrawals, which totaled INR 9.12 lakh crore, were surpassed by card and mobile payments, with a value of INR 10.57 lakh crore in 2020. The demand for contactless payment options during the COVID-19 epidemic and a considerable alteration in consumer purchasing habits following demonetization have fueled the expansion and adoption of PoS terminals in the nation.

Key Market TrendsRetail Segment to Hold a Significant Market Share

A significant step in the history of India's retail sector has been the COVID-19 epidemic. As businesses made further advances in e-Commerce, the percentage of consumer wallets spent online rose significantly. In particular, in semi-urban and rural regions, rolling lockdowns drove households to purchase online.

India's widespread connection and its around 700 million Internet users were major factors in a generational transition, as stated by Economic Times. The retail industry, which is expanding across sectors and is anticipated to reach USD 1 trillion by 2025, would benefit from these dynamics after the epidemic.

Further, by implementing a digital ecosystem, both established retail chains and new competitors may benefit from changing consumer and industry trends. Businesses need to establish business concepts that fit the local environment, and those that provide top-tier goods to Indian customers will succeed.

Moreover, retailers may increase value and income with subscription-based services in addition to rapid PoS financing. It makes it easier to cross-sell and up-sell expensive, durable items. Retailers of consumables (including those selling toiletries, milk, and supplies) can also use an app-based service. The subscription model allows customers to choose the quantity and frequency of shipments while assisting merchants in realizing economies of scale.

As per the Reserve Bank of India database on the Indian Economy, the POS segment in retail is valued at INR 42,266 Crores in May 2022, with an increase of 6.17% compared to the previous month, April 2022, for the financial year 2022 - 2023. The significant value during the period in the POS segment in retail contributes to the major market shares.

Mobile Point-of-Sale is Anticipated to Register Significant Market Growth

• The value of the card and mobile payments surpassed that of ATM withdrawals in the fourth quarter of 2019 and the first quarter of 2020 as a result of the ongoing drive for digitalization and other changes. Additionally, the COVID-19 epidemic encouraged customers to stop using cash and migrate to digital payment methods. The new normal will see a continuation of this trend. The potential for expansion is shown by the rise in card payments made through PoS terminals.
• UPI is nowadays actively used on mobile devices by both customers and merchants. UPI@ PoS is, however, gradually gaining popularity. Nearfield communication (NFC) capabilities will help NPCI further promote the use of UPI@PoS, and aggregators are needed to make this shift. This would accomplish several things, including reducing the need for physical contact when dealing, boosting India's domestic card network, and putting more of an emphasis on digitizing merchant payments, a market that UPI hasn't explored much compared to P2P transactions.
• Many past milestones in mPOS were established globally to face challenges during COVID times, which made a significant impact on the Indian POS market. For instance, in June 2020, several financial services businesses introduced a white-label (app-based) solution for retailers. This software is a mobile-first and mobile-only acceptance solution that enables all merchants with Android smartphones that support NFC to take in-person payments made using Bharat QR, UPI, and NFC-based contactless cards as well as distant payments made using a link-based method. This app not only accepts payments but also offers value-added services like online dukaan, reporting, and e-khata.
• The mPOS trends in India are improving by various initiations of POS companies. In October 2021, RapiPay is prepared to produce hybrid micro-ATMs that can function as mobile point-of-sale (mPOS) machines. As a result, customers will be able to swipe credit cards in addition to debit cards for any transaction or purchase at a RapiPay station.
• In contrast to traditional ATMs, RapiPay Micro ATMs provide users the ultimate convenience by allowing them to withdraw cash and do other comparable banking operations at any RapiPay Direct Business Outlet. The average daily transaction value for micro-ATMs increased from Rs. 3200 in September 2020 to Rs. 3800 in September 2021.
• As per the Reserve Bank of India dataset, Mobile Payments in May 2022, the payments were valued at INR 17,53,658 Crores, with an increase of 4.17% growth compared to the previous month April 2022 which was valued at around INR 16,83,381 Crores. The growing trends in the adoption of mobile payments lead to a rise in mPOS systems which makes digital transfers faster and portable.

Competitive Landscape

The India POS Terminal Market is moderately competitive, with a considerable number of regional players. The companies are leveraging strategic collaborative initiatives, and acquisitions to increase market share and profitability.

• June 2022 - Bajaj Finance Limited, the lending division of Bajaj Finserv Limited, has joined up with Worldline, a multinational provider of payment services, in order to provide point-of-sale (POS) payments acquiring solutions for its merchant network. By offering point-of-sale terminals and enabling the acceptance of a wide range of payment instruments on those terminals, such as equated monthly installments (EMI) cards, credit cards, UPI, and wallets, Bajaj Finance Limited hopes to strengthen its relationship with both its existing and new network of merchant partners.
• March 2022 - The first end-to-end POS payment processing system of its sort in India has been introduced by Mumbai-based pay tech service provider Lyra Network India. The POS software solution was introduced in the location where Lyra TownHall is now located. A safe framework for POS systems is provided by this end-to-end solution. This solution is applicable to Android POS systems as well as Micro ATM services.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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