India’s POS terminal market size by volume based on total number of cumulative device installations as
of the end of each financial year and growth rate (in thousands)

5,000 4,434.0 4,720.1 90%
82.5% 80%
4,000 70%
60% &
3,000 50% %
40% &
2,000 0% 2
1,000 20% ™
10%
0 0%

 

FY16 FY17 FY18 FY19 FY20 FY21

mmm Device Installations (In Thousands) =—&- Growth Rate

Note: India’s POS terminal market is defined as the total number of POS terminal devices installed across India by all players
(supplier, manufacturer and assembler) either through retail/channel sales or through a direct sales channel. It includes sales being
made on a one-time sale or rental basis. Both active and inactive terminals have been taken into consideration.

Source: India Payment Services Market Outlook to 2026, Ken Research, August 2021.

India POS Terminals Market Future Outlook and Projections

Increased penetration of debit and credit cards, the growing e-commerce sector, and rising disposable income
coupled with the Gol’s initiative towards promoting a cashless economy will provide an opportunity for growth
of POS devices in India. Issues with respect to factors such as privacy, security, trust and lack of integration of
telecom infrastructure may cause a major roadblock for the industry. It is projected that the retail sector will
account for the highest volume share due to the increasing awareness among retailers about the benefits of POS
terminals. The major growth drivers for the POS market in the near future will be:

© Potential to increase POS penetration: As of financial year 2020, the total number of debit and credit cards in
the country stands at approximately 885 million and the number of POS terminals is just above five million.

¢ Attractive market opportunities: The growth in small and medium enterprises in the apparel, retail,
hospitality, healthcare, fuel station and entertainment segments is viewed as an opportunity for merchant
acquiring by banks. Thus, they are likely to procure a large number of POS terminals.

¢ Shift from traditional POS terminals: The recent COVID-19 pandemic has presented an opportunity for NFC
technology-based POS terminals, which offer contactless transactions. POS terminals enhanced with features
to support UPI are in demand in large retail stores to speed up the billing process. The micro-ATM (POS
terminals) sector is growing as it is being used widely for AePS-based payments.

Rationale and description for India’s POS terminal markets future outlook on the basis of recent
trends and developments

 

 

Outlook Period Rationale

During the Gradual Increase in Debit and Credit Card Usage: As India is making efforts
financial year 2021 | towards increasing plastic cash over physical cash, the sale of POS terminal devices is
and predicted for projected to increase due to the rising penetration of debit and credit cards. India’s POS
the financial years | terminal market was expected to reach 4,701.2 thousand POS terminals cumulatively in
2022 to 2026 terms of device installations in the financial year ending 2021.

Wireless POS Terminals are Gaining Popularity: Wireless POS devices have been
growing rapidly and are further expected to support the POS terminal market due to their
easy usage.

POS Solutions: Major companies are further expected to focus on POS solutions such
as bill generation, sales analytics and inventory management software, which would
attract more merchants in the future.

Initiative from RBI: The RBI operationalized the Payment Infrastructure Development

 

 

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