Mobile point-of-sale systems are intended to roam free, meeting and checking out customers wherever they may be, but many merchants are anchoring the devices to the counter as a replacement for traditional POS terminals.
The reason is simple—cost, said Greg Buzek, CEO of IHL Group, which recently published the research report, "mPOS: Houston, Do We Have a Problem?"
"Where mPOS, and tablets in particular, have been the most popular is in new mom-and-pop retailers. You can get a tablet POS with software for less than $100 a month. Contrast that to $3,000 to $7,000 up front for a traditional POS," Buzek told PaymentsSource. "Many of these retailers simply purchase these tablet POS, fix them to a stand and then run them like a traditional POS." They use programs like Square, Clover and ShopKeep.
While a stationary terminal is usually cheaper to operate over time, the low cost of entry of mobile hardware is more compelling as a sales pitch, particularly to smaller operators, he said. "The reason they have mPOS is more due to freeing up much needed startup capital for other items," Buzek said. "It's pretty compelling to only have to pay $100 or less up front if you are retailer just starting out. And capital is at such a premium for new retailers."
When they are detached from the counter, mobile POS devices—which can be as simple as a consumer tablet with POS software and a credit card reader—can be used to shorten checkout lines, look up inventory on the sales floor and allow retail personnel to complete sales transactions outside of the store. They can be used in remote pop-up store locations, and also have applications for restaurants and food trucks.
In terms of replacing a standard POS terminal, retailers may find the mobile devices more limiting, for instance, when it comes to tracking inventory. "There is no real benefit of walking around with it in a small store unless you have the back-end systems to support upselling. Most of retail is still about putting things in bags at the end of the transaction. That requires a counter to do it well," Buzek said.
Larger companies view mobile POS differently than smaller merchants, expecting to use the technology to complement stationary terminals rather than replace them. Also, how these devices will be integrated with EMV chip cards is yet to be determined.
The market for mobile POS systems is growing rapidly, IHL research found, with 78 percent of retailers planning to make a purchasing decision on new mobile POS equipment by mid 2016, Chain Store Age reported. Of enterprise retailers, 66 percent said they want to get their mPOS solution from their existing POS software vendor.
Shipments of new mobile POS devices were expected to grow in excess of 95 percent globally and be more than 108 percent in North America in 2014, according to IHL. Apple (NASDAQ:AAPL) dominates market share, with HP, Motorola Solutions (NYSE: MSI) and Samsung also showing strong growth.
"Apple had first mover advantage, particularly when Square provided an easy-to-use credit card reader that would work with any iPhone or iPad," Buzek said. "But the larger enterprises predominantly use Windows for the POS; and thus, Microsoft Windows 8 and also more ruggedized devices have a much greater opportunity against Apple as the devices are adopted across hundreds or thousands of stores and must integrate with existing systems."
The number of mobile devices in department, apparel and shoe stores was expected to triple in 2014. "The move to Mobile POS in certain segments is radically changing the face of retail and hospitality, particularly mall-based retailers," Buzek said.
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