The pandemic has seen sustained moves away from cash by customers and consumer-facing businesses across the globe. Just 15 percent of consumers now prefer to pay by cash and there is now growing trust in near-field communication (NFC) payment systems. Connectivity is now playing a critical role in payments as every organization from one-person service companies to multinational retailers relies on point of sale (POS) devices and connected payments terminals.
Within this growing category, cellular connectivity is accelerating in uptake. Connectivity for POS and vending equipment is an already valuable market that still has large opportunities for growth. The market for cellular POS terminals is set to grow four-fold from U.S. $20bn in 2020 to U.S. $80bn in 2026. This expansion is underpinned by consumer habits but also by a new wave of fully-featured yet cost-effective POS payment terminals which utilize cellular connections such as LTE to make the technology available to all types of users.
POS with Added Intelligence
AI-enabled POS systems provide maximum flexibility while also providing precise monitoring for inventory tracking and order management. AI POS systems can also be easily integrated to assist with reporting and connect to accounting systems. These systems are able to handle the complex scheduling tasks that were previously time-consuming and overwhelming and precluded smaller organizations from utilizing mobile POS (mPOS) devices. AI-enabled POS systems are easy and fast to use so employees can be more productive. This is important in the restaurant industry, for example, where servers can be freed up and increase their overall productivity.
These POS systems rely on advanced technologies instead of human labor so they also eliminate human error and provide a consistent experience every time. Self-ordering POS options like kiosks, vending machines, and online ordering that use AI have been proven to shorten queues, reduce wait times and increase sales. AI-enabled POS systems can also provide unique insights into the changing habits and behavior of customers and even recommend which customers to re-engage with. For example, knowing a customer buys a beverage at a specific time most days means a vending machine operator can push an offer to them, either at a regularly-used machine or at a machine nearest to their location at the specific time.
Why LTE Meets Most POS Requirements
Most POS devices today run on 4G/LTE, Wi-Fi, or wired ethernet connections. Some still run on 3G technology which is being discontinued in many regions, forcing operators to upgrade. POS is being revolutionized by the adoption of mPOS, which typically relies on 4G/LTE with some 3G deployments due to be replaced. The convenience of no wires and being able to take payments outdoors makes the case for LTE as the connectivity of choice for this market because the bandwidth is sufficient and the technology is secure enough to support charging and payment activities.
Vending machines have traditionally relied on a vending machine controller (VMC) to manage systems including payment, refrigeration, lighting control, and product handling. Machines have been low-footprint, low-power devices in the past and lacked sufficient power to support new services. However, vending platforms are changing, creating more powerful machines that can support new services and interfaces. The connectivity provided by LTE, Wi-Fi, or wired methods has been sufficient but this is poised to change with the capacity that 5G brings.
5G connectivity is set to stimulate innovation in vending machine platforms. LTE was the first wireless connectivity that truly ushered in the era of mobile broadband in the vending industry. It enabled fast communications for vending machines but the autonomous stores of the future will use cloud-based software, AI, and machine learning. The low latency capabilities of 5G and greater intelligence in smart vending machines will come together to enable richer, more in-depth experiences as we change how we shop and retailers refine how we are marketed to.
The pandemic has proved to be a stimulus for greater adoption of mPOS and vending as people want to eliminate contact with cash and minimize in-person interactions. However, even before the pandemic moves were well underway to utilize LTE connectivity to enable wireless, cost-effective mobile point-of-sale devices. Barriers to increased adoption are continuing to lower as mPOS devices become cheaper and service fees are more acceptable to even micro-businesses.
This adoption curve will continue as we progress down the path to a cashless society and secure cellular connectivity is a fundamental foundation for mPOS payments. LTE is the current best-suited connectivity. It is secure, provides enough bandwidth, and costs sufficiently little to make it appealing for a wide range of long-term use cases in these high-growth markets.