UAE POS Terminal Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

UAE POS Terminal Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The UAE POS Terminal Market is expected to register a CAGR of 6.5 % during the forecast period (2022-2027). The COVID-19 outbreak forced retailers to adopt mPOS devices due to increased contactless payment limits and lowered charges. According to a Mastercard study quoted by Mashreq Bank, 82% of consumers in the UAE consider contactless as their preferred payment method, and "81% stated they would continue to use digital forms of payment once the pandemic is over, pointing to a long-term behavioral shift.

Key Highlights

• The POS terminal market has grown significantly over the past few years, owing to its ability to offer an increased return on investment and ease of access. POS systems that facilitate transactions from the central component of businesses across industries, like retail, hospitality, transportation, and banking, have gained importance in companies of small and big sizes over the years.
• Further, the COVID-19 pandemic has significantly transformed how consumers shop, affecting several market verticals. The retail sector witnessed a drastic change due to the pandemic. Consumers have also increased their use of various sales methods, such as curbside pickup, virtual consultations, contactless payment, and even social commerce, i.e., shopping through social media. According to the latest retail experts and shopper surveys, this new behavior is expected to stay over the forecast period. Such trends have affected the demand for POS terminals across the country.
• POS terminal systems have evolved from being transaction-oriented terminals/devices to systems that can integrate with the company's CRM and other financial solutions. This evolution has empowered the end-users with business intelligence to better manage their revenue streams and inventory. Lower maintenance costs, accurate transactions, and real-time inventory are key advantages of POS systems. With the functional benefits that the advanced POS systems offer, companies have replaced their traditional billing software with POS systems, thus, securing the growth of the POS system market.
• One of the major drivers of the market is the low cost of ownership compared to other payment channels. The enhanced POS systems provide higher durability and reliability, which leads to a lower cost of ownership, thus raising the demand for POS solutions in both medium and small-sized businesses compared to the traditional system.
• One challenge to the market's growth is the security concerns due to using critical information. POS terminals are connected to the network and the internet, making them vulnerable to attacks to gain access to and manipulate it like any other insecure machine. The terminal communicates with the rest of the network means attackers could access unencrypted card data, including Track2 and PIN information, providing all the necessary information required to steal and clone payment cards.

Key Market TrendsRetail Expected to Witness Significant Market Share

• The rising number of retail stores across regions attracts customers due to significant discounts and other services; however, customer retention becomes the primary challenge to sustain in the market. This competition increases the requirement to reinvent their business models to keep away from competition concerning price and find the balance between investing in the latest technologies and revenue.
• The growth of supermarket retailers globally has fueled the demand for mPOS solutions worldwide. According to a study by Visa, across the wider Middle East, North Africa, and South Asia region, the UAE showcased the highest annual spend per online shopper at USD 1,648. Visa transaction data further supported the observation, showing that the country continues to maintain a healthy lead in average transaction size compared to both mature and emerging e-commerce markets.
• The inventory, sales reporting, financial management, and customer analytics features, which POS terminals provide, assist the retailers in overcoming the problems related to customer retention. Hence, the requirement for customer retention and competition growth of the industry promotes the development of POS terminals.
• Further, mPOS systems are poised to be significantly utilized in the retail outlets to integrate core functions such as sales reporting, customer management, inventory management, and employee management under one system.

Mobile/Portable Point-of-Sale Terminals Expected to Witness Significant Market Share

• A mobile point-of-sale (mPOS) system is a smarter alternative to the traditional POS. A mobile point-of-sale system allows users to accept payments via tablets and other handheld devices without being tied to a POS register in a single location.
• The transactions can include credit card magstripe reader payments and wireless payments. An mPOS system utilizes a mobile phone's data connection to process transactions.​
• Mobile POS systems are gaining traction as they allow sales and service industries to conduct the transaction at the customer's location, adding flexibility to the whole process and improving the customer experience. ​
• The growth in e-commerce and the entangling of brick-and-mortar and online retail practices are also expected to affect the future development of the terminals. In fact, with the option of cash on delivery being provided by major e-commerce platforms, a sudden surge in the adoption of mobile POS terminals has been noticed.​
• Toward the end of the forecast period, the segment is expected to multiply in market presence as vendors increase their relevant offerings and digitalization in response to the increased demand for contactless, ease-of-use payment methods. As mPOS solutions are designed for tablets instead of desktop computers, the trend for smaller and more portable devices may drive the market's growth.

Competitive Landscape

The UAE POS Terminal Market is moderately competitive, with a considerable number of regional and global players. Key players include Samsung Electronics Co. Ltd, Ingenico Group, and Cisco Systems Inc., among others.

• June 2021 - UAE, Commercial Bank of Dubai (CBD), and Network International, the region's top digital commerce enabler in the Middle East and Africa (MEA), have agreed to provide merchant clients with pre-approved business loans secured by their Point of Sale (POS) receivables.

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• The market estimate (ME) sheet in Excel format
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