[03/23/07]
According to research recently released by Venture Development Corporation (VDC), mobility and portability of equipment is a key selection criterion for most end-user institutions that conduct electronic payments. In fact, small form factor mobile terminal growth is expected to outpace the larger mobile and stationary terminals by nearly 50% over the next 3-5 years.
VDC's recently released, Mobile Payment Terminals: Global Market Demand Analysis, estimates the global market exceeded $320 million in 2006 and is expected to grow at a compounded annual rate (CAGR) of more than 15% through 2010. Unit shipments in 2006 exceeded 1.4 million and are expected to approach 4 million by 2010.
Mobile payment terminal growth can be correlated to the effort put forth from the payment card industry to convert consumers to electronic transactions. The push by the financial institutions to use electronic payment mechanisms (such as debit/credit, smartcards, contactless payment) has increased the comfort level of the consumer with the corresponding hardware required to conduct the transaction.
Regional analysis of the Mobile Payment Terminals market indicates that the EMEA region represents approximately 50% of the total global market; however, the region's market share is expected to be reduced to 45% by 2010 as the Americas and Asia-Pacific regions increasingly adopt the technology. Growth in the region is expected to be somewhat tempered because of ongoing implementation efforts associated with Single European Payments Area (SEPA).
Historically, the retail and hospitality verticals have been touted as the fastest-growing segments for Mobile Payment Terminals; however, VDC research does not fully support this notion. While it is true that these segments represented a significant share of the market in 2005, the strongest growth over the next five years is anticipated to occur in the field service and transportation markets (20% CAGR), followed closely by field sales (almost 18% CAGR).
Many Mobile Payment Terminal vendors continue to employ direct-to-end-user strategies for system implementation; however increasing requirements for education, training, and partnership programs have shifted the market toward VAR/SI channels. In 2005, the largest percent of Mobile Payment Terminals revenues was derived from the VAR/SI channel, and this channel is anticipated to represent more than 50% of the total market by 2010.
VDC will be attending RFID Journal LIVE! 2007 at Disney's Coronado Springs Resort in Orlando, FL from April 30 to May 2, 2007. In addition, VDC will be delivering a presentation, investing models, and supporting market research at the "Picking Winners in a Crowded Field" session during the RFID Investor's forum pre-conference seminar.
About VDC
Venture Development Corporation (VDC) is an independent technology market research and strategy consulting firm that specializes in a number of retail automation, RFID, AIDC, embedded, component, industrial, and defense markets. VDC has been operating since 1971, when the firm was founded by graduates of the Harvard Business School and Massachusetts Institute of Technology. Today, we employ a talented collection of analysts and consultants who offer a rare combination of expertise in the market research process; experience in technology product and program management; and formal training in engineering and marketing. VDC's clients include thousands of the largest and fastest-growing technology suppliers in the world and the most successful investors participating in the markets we cover.
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