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Will Retailers Need a POS Terminal After Covid? Traditional keypad payment terminals may be a thing of the past.

By Jennifer Spencer Edited by Heather Wilkerson

Opinions expressed by Entrepreneur contributors are their own.

Tom Werner | Getty Images

Until now, most consumers have relied on bank cards to make in-store purchases, and the seller needed only a payment terminal to conduct the transaction. But thanks to Apple Pay and Google Pay, a growing number of users are now making purchases on their phones instead of using bank cards, creating a smoother checkout experience. Phone payments also make it easier to avoid transmitting Covid, as there's no need to touch a shared pin pad on a payment terminal. With the increasing prevalence of mobile payments, it seems inevitable that retailers will soon be able to do without a payment terminal altogether.

The progress in making and accepting payments has affected buyers, sellers and big tech alike. For instance, to further accelerate the transition to the contactless era, Apple bought Mobeewave, a SoftPOS provider in Canada. The lesson for businesses here is that there is no sense in having an expensive payment terminal if a mobile device can do the same. It seems that Apple was the first to understand this progression.

Post-Covid world

The changes that have emerged as a result of the pandemic cannot be underestimated. Social distancing and hygiene measures have had a direct and irreversible impact on the way businesses conduct their operations.

Gone are the days of long queues and overcrowded restaurants and pubs. Germany, England and other European countries are announcing full lockdowns, while France has already declared that many traditional Christmas festivities will be canceled across the country. Moscow authorities have issued a general order to all enterprises catering to mass gatherings, including restaurants and banquet halls, to cancel all reservations for the New Year's holidays, placing a full ban on service from 23:00 to 6:00 local time.

Though takeout services will remain operational, the restrictions on indoor gatherings will inevitably have a significant impact on revenues across the hospitality sector. Many venues rely on profits from these traditionally busy periods to get them through quiet times throughout the rest of the year.

Related: Accor's MEA CEO Mark Willis On How His Hospitality Brand Handled The Impact Of The COVID-19 Pandemic

The situation also places the need for idle payment terminal equipment in question. Couriers for takeout services will find it much more convenient to accept payment using an application on their smartphones rather than carry around cumbersome pieces of equipment that may fail in terms of connection or battery life.

Another fear placing the need for terminals in question is that of virus transmission. Pushing buttons that have been touched by dozens of otherwise unconnected people presents a clear sanitation challenge. With governments placing strict requirements on the use of masks and gloves to buyers at all businesses, the need for reducing contact surfaces becomes apparent. As payment terminal keypads are a common source of contact, their ongoing presence and use in an establishment can be questioned when there are contactless alternatives widely available.

The alternatives

The alternatives to traditional payment terminals are rising like a tidal wave around the world. A February 2020 report from MerchantSavvy predicted that 1 billion people worldwide would make a mobile payment this year. The report also forecasted that number will grow to 1.31 billion people using mobile payments in a 6-month period by 2023.

Chinese tech firms dominate the global payments market. Alipay is the world's biggest mobile payment platform, with 1.2 billion users — taking over the previous leader, WeChat Pay.

The MerchantSavvy report lists $3,081 billion as the forecasted global mobile payment market by 2024. It's a considerable increase from the $1,146 billion in 2019 and is a compound annual growth rate of 23.2% during the forecast period of 2019-2024.

Apple Pay has also been making headway in the American consumer economy with 253 million active users. According to a 2019 survey, 51% of mobile payment users in the U.S. have used Apple Pay in the past 12 months to pay in stores, restaurants or other points of sale. The number of Apple Pay transactions in 2019 amounted to 10 billion, and its share of global card payment volume had reached 70% in 2017 but has been giving way to competitors.

As for other markets, Russia and the CIS countries have been steadily developing their own solutions. Digital Alliance has developed an advanced SoftPOS solution under the Tap2Go brand, which offers a similar technology to Mobeewave. Digital Alliance is a holding company that operates multiple businesses and brands, ranging from ecommerce payments and POS solutions to cryptocurrency technologies. The company recently launched its SoftPOS solution called Tap2Go and is currently looking for distribution partners, such as telecommunications companies and banks around the world, that wish to tap into this surging industry.

Related: 7 Predictions for the Future of Payments in a Covid World


As the market for mobile payment solutions saturates and the competition intensifies, there will eventually be winners. Whoever comes out on top, the pandemic has made it all but inevitable that we will wave goodbye to traditional keypad payment terminals in favor of contactless options sooner than we thought.

Jennifer Spencer

CEO of Energent Media

Jennifer Spencer is the founder of Energent Media, a digital marketing firm for tech startups. She is passionate about helping brands leverage content to share their stories with the world.

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