The development trend of the smart POS machine industry is developing towards product service and industrial ecology.

1. Overview of the smart POS industry

1. Industrial chain

        From wired to wireless, POS machines have moved from traditional to smart. Currently, 2G standard POS machines are mainly used on the market, but wireless POS machines are gradually starting to upgrade from 2G standard to 4G (mainly LTE Cat1). In the future, new payment methods such as face recognition will appear, and the POS machine industry will move towards a more As the direction of intelligence evolves and continues to expand, smart POS machines will also be widely used in many subdivisions such as supermarkets, finance, logistics, catering, e-commerce, and retail.

Data source: public information Organize

2. Classification differences

        Traditional POS is an independent device that can add external components, but cannot be associated with other devices. Since it is troublesome to update the equipment, merchant experience is not high. Smart POS refers to a POS machine that adds an intelligent platform and 3G communication to the traditional POS, supports multiple payment methods, and has multiple functions. It is a professional intelligent business management terminal based on mobile Internet cloud services. Starting from the payment link, it helps merchants understand consumers through consumption data collection and implement remarketing tool platform. The open smart POS can be updated as long as it is connected to the Internet, and other additional services meet most of the needs of merchants, such as detailed management of customer orders, precise marketing of customers, etc., helping merchants provide better services to consumers.

Data source: public information Organize

2. Current status of the smart POS industry

1. Shipment

  In 2015, there were only 90,000 smart POS machines in my country, and this number will increase to 15 million in 2020. The penetration rate increased from 0.4% in 2015 to 37.0% in 2020, which is a rapid growth rate. With the introduction of digital currency and the increasing penetration of new payment methods, the number of smart POS machines will steadily increase. (Source: People's Bank of China, compiled by Huajing Industrial Research Institute)

       In recent years, the incremental market growth of the commercial POS machine industry has been sluggish, and traditional POS machine manufacturers have been restricted in scale expansion and are facing transformation pressure. Data shows that in the first half of 2020, the number of connected POS machines in my country has rebounded. The number of connected POS machines increased by 1.7075 million units compared with the end of 2019, reaching 33.3128 million units. (Source: People's Bank of China, compiled by Huajing Industrial Research Institute)

3. Development drivers of smart POS machines

       The rapid development of mobile payment business has led to increased demand for POS terminals. In 2020, the number of mobile payment services in China was 123.22 billion, accounting for 52.4% of the number of electronic payment services. The amount of mobile payment business was 432.16 trillion yuan, accounting for 15.9% of the amount of electronic payment business. With mobile payment basically fully popularized, there is still a lot of room for development in the penetration rate of POS machines. In the future, as downstream demand continues to grow, the market size of the smart POS industry will continue to increase. Mobile payment business volume is growing rapidly, and POS machines solve the pain point of merchants' payment reliability. For users, it is difficult to change payment habits once formed, and due to the upgrade of people's overall consumption level, large-amount payments are more inclined to POS machines with higher security factors. At the same time, in order to seek better marketing management methods and consider security, merchants have put forward higher requirements for terminal equipment, hoping to use POS machines to realize the collection function of wireless payment.

Related report: "2021-2026 China Smart POS Machine Market Competition Strategy and Industry Investment Potential Forecast Report" released by Huajing Industrial Research Institute;

4. POS machine development trends

       The number of smart POS machines has increased significantly. With the development of the Internet and mobile payment and the continuous expansion of payment scenarios, online and offline integration form a closed-loop business ecosystem, and the upgrade of POS terminals will be a definite trend. Among them, smart POS machines can not only meet all payment methods, but also use payment as the starting point and combine 5G, Internet of Things, big data and other technologies to derive a series of service scenarios such as consumption data collection, operation management, and financial services. In the future, the POS machine industry will develop in the direction of functional diversification, technological diversification, product service-oriented and industrial ecology.
       Smart POS machines increase the demand for communication modules. Currently, except for a few wired POS machines that are connected to the banking system through telephone lines or network cables, traditional wireless POS machines generally have built-in 2G or 3G modules, while the new generation of smart POS machines generally need to be equipped with 4G communication modules. As LTE technology matures, wireless POS machines are gradually upgraded from the 2G standard to the 4G LTE standard. In the future, traditional POS machines will be replaced by smart POS machines or have built-in communication modules upgraded. Therefore, the entire module demand market will also undergo structural changes. The trend of POS machine communication modules upgrading to 4G is irreversible. Fibocom and other related module supply companies will fully enjoy the industrial dividends brought by the upgraded demand for 4G modules.

(Original source: Huajing Intelligence Network)