Technology has had both a dramatic and positive impact on the payments industry and on point-of-sale systems in particular. As digital and smartphone technologies continue to develop, their prominence in the market will likely increase. Traditional cash registers have fallen to the wayside for more robust, powerful and easy-to-use POS systems among merchant adopters.
According to a recent study conducted by Javelin Strategy and Research, POS shopping still accounts for roughly 92 percent of retail spend in the U.S. Mobile point-of-sale systems (mPOS) are becoming a popular trend across small and midsized operations in part because of their back-end business benefits, but also because of their payment security in processing credit card transactions. As plastic cards grow in popularity, cash is likely going to fall the wayside, especially as mPOS systems continue to integrate with merchant operations.
Cash declines while POS grows
Further Javelin research predicts alternative and digital payments will likely replace cash as a go-to means of transaction. Certainly, electronic and mobile payment technologies aren't mature enough to fully displace cash as a standard method of payment, but the forecasted decline in value is worth noting.
While checks were traditionally used for larger transactions, it seems consumers prefer to swipe their credit cards these days. Between 2012 and 2013, cash transaction volume declined 10 percent, or a total of $86 billion. Those figures are forecasted to drop another $64 billion between 2014 and 2019.
The resulting growth of mPOS adoption in the small and midsized business landscape is due in part to the improved functionality and flexibility cutting-edge POS terminals bring. Even though the use of cash will decline in the future, it is still a common type of in-store payment, with 65 percent of consumers surveyed using it to make a purchase in the past week. However, credit and debit dominate POS spending because they are typically used to make larger transactions.
Great news for merchants
The results come as great news for merchants and local business owners, as card information, along with mPOS systems, allows companies to get a better glimpse into who their customers really are. Mobile POS terminals come equipped with robust reporting and data collection capabilities, securely storing information during and after the point of sale. Merchants can leverage this data to their advantage, using it to identify buying trends, habits and individual consumer preferences.
This type of intuitive look into the customer profile hasn't been available to small and midsized merchants until recently. Mobile and tablet point-of-sale systems now enable smaller operations to charge customers on the go, and do so in a seamless and effective manner.
"For years, many small merchants have been unable to accept electronic payments due to high processing costs or an inability to support a traditional terminal," said Nick Holland, a senior payment's analyst at Javelin. "But the necessity of cash and checks has been eroded by the popularity of mobile card readers."