How Governments Are Driving mPOS Adoption
In an effort to create more cashless societies, numerous governments around the world are adopting legislation to increase the availability and use of modern payment terminals. Given the existing technology infrastructure and the specific needs of consumers in these countries, in many cases the demand for suitable payment terminals is driving the adoption of mobile point-of-sale (mPOS) systems.
With cashless payment systems becoming increasingly common in markets across the globe, consumers are now more likely to expect to have the option to pay with a card or mobile wallet. Alongside this, governments are pushing merchants to adopt digital payment technology for reasons that will be discussed below. Together, these trends are forcing merchants – particularly smaller and more mobile merchants – to find acceptance solutions that facilitate such payment options and are compatible with their specific needs.
mPOS devices in many cases provide such a solution for numerous merchants. The fact that they offer an affordable, mobile option with low hardware costs makes them particularly suitable for businesses that have traditionally avoided adopting payment terminals. These included verticals like street vendors, mobile merchants and independent service providers – to name but a few.
The meteoric rise of Square has led to financial institutions providing mPOS offerings that are more accessible to small- and medium-sized businesses in general. These developments have ultimately resulted in a dramatic increase in the installed base of mPOS devices globally. Totaling 5.8 million in 2013, the number of mPOS units rose to 15.6 million in 2016 and is forecast to reach 31.4 million by 2020. By that time, mPOS devices are expected to represent approximately 50% of all payment terminals.
In most countries the governmental push towards more cashless societies is part of a wider financial inclusion policy, which incorporates a strategy to address the issue of tax evasion. Other related factors that are motivating this transition are connected to black market or black money transactions – which are often related to criminal or even terrorist activities.
The Countries Where mPOS Is Getting a Push
India is a prime example of a country where measures taken by the government are leading to the wider adoption of mPOS terminals. Following last November’s demonetization of all INR 500 and INR 1,000 banknotes – 86% of the currency in circulation – has increased the demand for terminals. Verifone reported that Indian orders for terminals rose five times in the month following demonetization. It is estimated that mPOS will cover approximately a third of the demand for terminals in India.
A variety of different governmental initiatives and laws are forcing merchants in various countries to turn to mPOS solutions. In Greece, for example, terminalization legislation has resulted in the introduction of fines for merchants in certain sectors – such as those working in the tourism industry – who do not provide terminal solutions for consumers.
Similar legislation in Malaysia and Poland has set firm targets for the introduction of additional terminals across both countries. In Malaysia, the goal is to reach 800,000 terminals by 2020, while in Poland the target is 600,000 in roughly the same timeframe. Poland has already launched an initiative referred to as ‘Paperless&Cashless Poland’, which involves the implementation of cashless transactions in public sector entities with a view to reducing the so-called ‘shadow economy’ – which is believed to constitute 19.7% of GDP.
In Romania, fiscalization and terminalization legislation have placed a requirement on certain businesses to adopt terminals. Essentially, businesses with a turnover of roughly $15,000 must accept cards. The government has also placed a cap on cash tractions – with anything over $1,000 having to be paid by card.