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Retail Applications and Wireless M2M - 3rd Edition

The retail industry is an important vertical for cellular M2M connectivity with 18.4 million cellular connections today and a total market size of nearly 90 million POS terminals, ATMs, vending machines, parking meters and fare collection devices worldwide. Berg Insight forecasts that the number of cellular M2M connections in the retail industry will grow at a compound annual growth rate (CAGR) of 12.6 percent to reach 33.3 million connections worldwide in 2018. Shipments of cellular M2M devices will at the same time increase at a CAGR of 6.5 percent from 6.6 million units in 2013 to 9.1 million units in 2018. Cellular M2M technology enables devices such as POS terminals and ATMs to be used at new locations where fixed line connectivity is unavailable or impractical. The technology has a more transformational effect on markets such as vending and parking, where machine operators need to reorganize their operations in order to benefit from the availability of real-time information.

The installed base of connected vending machines in North America reached 0.45 million units at the end of 2013, whereas the corresponding figure for EU27+2 was 0.11 million units. The market is still in an early stage as penetration rates for North America and Europe are at 7.4 percent and 2.9 percent respectively. However, vending is also one of the fastest growing segments for connectivity solutions in the retail industry, driven by demand for cashless payment and vending telemetry solutions. The North American market is projected to grow at a CAGR of 20.7 percent between 2013 and 2018, reaching 1.14 million connected vending machines at the end of the period. Similarly, the European market is forecasted to grow at a CAGR of 29.5 percent to reach 0.4 million connections by 2018.

The parking industry has been one of the earliest adopters of M2M communication technology and today approximately 50 percent of the world's 460,000 multi-space meters are connected, primarily to cellular networks. This penetration rate will continue to increase steadily throughout the foreseeable future, as nearly all new multi-space meter deployments have connectivity as a requirement. Connectivity has in contrast to this only recently become an optional feature in single-space meters and today only 4 percent of the single-space meters in the world are connected. However, connected single-space meters have recently had a breakthrough in the North American market, where mixed deployments that comprise both single-space and multi-space meters are becoming common. The share of single-space meters that incorporate connectivity is as a result now increasing rapidly and expected to reach 17 percent by 2018.

Cellular connectivity has become a very popular option for POS terminals and was incorporated in around one third of the devices shipped in 2013. The wireless technology has an important role in facilitating the global adoption of electronic payments, as it enables the rollout of POS terminals to many new market segments as well as regions where the fixed line telecommunications infrastructure is less developed. Berg Insight forecasts that the installed base of cellular POS terminals will grow at a CAGR of 12.2 percent between 2013 and 2018 to reach 29.1 million units worldwide in 2018, driven especially by growth in emerging markets. Berg Insight estimates that 27 percent of the ATMs in North America and 5-10 percent of the ATMs in Europe were connected to cellular networks in 2013. Wireless M2M is especially relevant for ATMs installed at off-site locations as it offers greater flexibility, shorter deployment times and competitive connectivity fees compared to fixed line alternatives. The number of wirelessly connected ATMs in North America is forecasted to grow at a CAGR of 6.0 percent to reach 0.17 million units by 2018. The number of wirelessly connected ATMs in Europe is similarly projected to grow at a CAGR of 10.0 percent to reach 0.07 million units in 2018.

Cellular connectivity is incorporated in an estimated 0.1 million fare collection devices worldwide today, such as on-board ticket vending machines, stationary vending machines and handheld ticket sales terminals. Berg Insight anticipates that the market potential for cellular connectivity in public transport will expand as account-based fare collection systems gain ground and increase the need for real-time communication. However, the number of fare collection devices that incorporate cellular connectivity is likely to remain relatively modest, as many fare collection devices can share a communication line with other equipment.

Cellular M2M network connections in the retail industry (World 2012-2018)

Highlights from the third edition of this report:

  • Insights from 20 new executive interviews with market leading companies.
  • Overview of the payment, vending, parking, transport ticketing and ATM industries.
  • Summary of industry trends and developments in each vertical market segment.
  • Updated in-depth profiles of 78 key players in the retail industry.
  • Reviews of vendor market shares and competitive dynamics.
  • Summary on the impact of emerging mobile payment services.
  • Extensive global and regional market forecasts lasting until 2018.

This report answers the following questions:

  • What is the potential market size for wireless M2M communication in the retail industry?
  • Which are the key applications that offer sizable business opportunities?
  • Which trends and developments are shaping each vertical market segment?
  • Which are the leading providers of vending telemetry solutions?
  • When will connectivity become commonplace in vending machines in Europe and North America?
  • How is the market for wireless ATM connectivity solutions developing?
  • Which are the leading providers of connected parking meters?
  • What is the attach rate for cellular connectivity in POS terminals by region?
  • How is the market for public transport fare collection systems evolving?

About the Author

Lars Kurkinen is a Senior Analyst with a Master's Degree in Strategic Management from the Aalto University School of Science and Technology, Finland. He joined Berg Insight in 2010 and his areas of expertise include Smart Homes, mHealth and Mobile Financial Services.

Table of Contents

Table of Contents

List of Figures

Executive summary

1. POS terminals and ATMs

  • 1.1. Payment infrastructure
    • 1.1.1. Overview of the POS terminal market
    • 1.1.2. POS terminal form factors
    • 1.1.3. Overview of the ATM market
    • 1.1.4. ATM form factors
  • 1.2. Evolution of electronic payments
    • 1.2.1. EMV migration
    • 1.2.2. Adoption of mobile data communication solutions
    • 1.2.3. Rollout of NFC-ready terminals
  • 1.3. POS terminal vendors
    • 1.3.1. CCV
    • 1.3.2. CyberNet
    • 1.3.3. Equinox Payments
    • 1.3.4. ID Tech
    • 1.3.5. Ingenico
    • 1.3.6. Margento
    • 1.3.7. PAX Technology
    • 1.3.8. REA Card
    • 1.3.9. Spire Payments
    • 1.3.10. VeriFone
    • 1.3.11. Worldline
  • 1.4. ATM manufacturers and connectivity solution providers
    • 1.4.1. Contour Networks
    • 1.4.2. Diebold
    • 1.4.3. Digi International
    • 1.4.4. DPL Group
    • 1.4.5. NCR
    • 1.4.6. OptConnect
    • 1.4.7. Triton
  • 1.4.8. Wincor Nixdorf

2. Vending machines

  • 2.1. Vending industry players
    • 2.1.1. Vending technology providers
    • 2.1.2. Vending machine manufacturers
    • 2.1.3. Product suppliers
    • 2.1.4. Vending operators
  • 2.2. Payment systems
    • 2.2.1. Coin mechanisms and bill validators
    • 2.2.2. Cashless payments
    • 2.2.3. Mobile phone payments and NFC
  • 2.3. Connected vending machines
    • 2.3.1. Remote monitoring of vending machines
    • 2.3.2. Vending telemetry and cashless payments in Europe
    • 2.3.3. Vending telemetry and cashless payments in North America
  • 2.4. Vending telemetry and cashless payment solution providers
    • 2.4.1. BiTX
    • 2.4.2. Cantaloupe Systems
    • 2.4.3. Coinco
    • 2.4.4. cStar Technologies
    • 2.4.5. Distrilog
    • 2.4.6. Ingenico iSelf-Service
    • 2.4.7. Materna
    • 2.4.8. Mecsel
    • 2.4.9. MEI
    • 2.4.10. Microtronic
    • 2.4.11. Nayax
    • 2.4.12. Prosa
    • 2.4.13. Smarcom
    • 2.4.14. USA Technologies
    • 2.4.15. Vendon
    • 2.4.16. VendScreen
    • 2.4.17. Vianet Group
  • 2.5. Vending machine manufacturers
    • 2.5.1. Automated Merchandising Systems
    • 2.5.2. Azkoyen Group
    • 2.5.3. Bianchi Vending Group
    • 2.5.4. Crane
    • 2.5.5. Deutsche Wurlitzer
    • 2.5.6. FAS International
    • 2.5.7. Fastcorp
    • 2.5.8. Jofemar
    • 2.5.9. N&W Global Vending
    • 2.5.10. Rheavendors Group
    • 2.5.11. Royal Vendors
    • 2.5.12. SandenVendo
    • 2.5.13. Seaga
    • 2.5.14. Sielaff
    • 2.5.15. Westomatic
    • 2.5.16. Wittern Group
  • 2.6. Vending operators
    • 2.6.1. Aramark
    • 2.6.2. Autobar Group
    • 2.6.3. Canteen Vending Services
    • 2.6.4. Selecta
    • 2.6.5. Sodexo

3. Parking meters

  • 3.1. The parking industry
    • 3.1.1. Parking industry players
    • 3.1.2. Single-space and multi-space meters in Europe and North America
    • 3.1.3. Pay-by-phone parking
  • 3.2. Connected parking meters
    • 3.2.1. Mobile data communication solutions for parking meters
    • 3.2.2. Connected multi-space parking meters
    • 3.2.3. Connected single-space parking meters
  • 3.3. Parking solution vendor profiles
    • 3.3.1. Cale Access
    • 3.3.2. Digital Payment Technologies
    • 3.3.3. Duncan Solutions
    • 3.3.4. Hectronic
    • 3.3.5. IPS Group
    • 3.3.6. MacKay Meters
    • 3.3.7. Metric
    • 3.3.8. Parkare Group
    • 3.3.9. Parkeon
    • 3.3.10. POM
    • 3.3.11. Siemens
  • 3.4. Private parking operators

4. Public transport ticketing

  • 4.1. Modal split of passenger transport
  • 4.2. Bus and rail fleets
  • 4.3. Fare collection systems
    • 4.3.1. Fare payment
    • 4.3.2. Fare collection devices
    • 4.3.3. Installed base
    • 4.3.4. Mobile data communication solutions
  • 4.4. Fare collection system vendors
    • 4.4.1. Cubic Transportation Systems
    • 4.4.2. Scheidt & Bachmann
    • 4.4.3. Thales
    • 4.4.4. Vix
    • 4.4.5. Xerox
    • 4.4.6. Almex
    • 4.4.7. FARA
    • 4.4.8. Indra
    • 4.4.9. INIT
    • 4.4.10. IVU

5. Forecasts and conclusions

  • 5.1. Wireless M2M in the retail industry
    • 5.1.1. Cellular M2M device shipments
    • 5.1.2. Cellular M2M network connections
  • 5.2. Market trends and drivers
    • 5.2.1. POS terminals account for the bulk of M2M connections in the retail industry
    • 5.2.2. ATMs in offsite locations benefit from cellular connectivity
    • 5.2.3. Vending operators benefit from cashless payments and telemetry
    • 5.2.4. The parking meter industry leads in the adoption of wireless M2M
    • 5.2.5. Public transport ticketing will move to systems with real-time authorization
  • 5.3. Market forecasts
    • 5.3.1. POS terminals
    • 5.3.3. ATMs
    • 5.3.4. Vending machines
    • 5.3.5. Parking meters
    • 5.3.6. Public transport ticketing

Glossary

List of Figures

  • Figure 1.1: Installed base of POS terminals and ATMs (World 2008-2012)
  • Figure 1.2: POS terminal density by country (World 2012)
  • Figure 1.3: Stationary and mobile POS terminals
  • Figure 1.4: mPOS devices
  • Figure 1.5: ATM density by country (World 2012)
  • Figure 1.6: Free-standing and through-the-wall ATMs
  • Figure 1.7: EMV implementation status (World 2012)
  • Figure 1.8: POS terminals with cellular connectivity by region (World 2012)
  • Figure 1.9: NFC-ready POS terminals by region (World 2012)
  • Figure 1.10: POS terminal shipments by manufacturer (World 2012)
  • Figure 1.11: Equinox Payments POS terminals
  • Figure 1.12: Margento mPos data-over-voice POS terminal
  • Figure 1.13: PAX Technology POS terminals
  • Figure 2.1: Vending machine density by region (World 2012)
  • Figure 2.2: Examples of vending machines
  • Figure 2.3: Installed base of vending machines by country (EU 27+2 2012)
  • Figure 2.4: Examples of product suppliers and brands
  • Figure 2.5: Examples of coin mechanisms and bill validators
  • Figure 2.6: Examples of cashless payment devices for open and closed systems
  • Figure 2.7: Vending telemetry vendor market shares (Europe Q4-2013)
  • Figure 2.8: Vending telemetry vendor market shares (North America Q4-2013)
  • Figure 2.9: Installed base of connected vending machines by vendor (2013)
  • Figure 2.10: Product portfolios of vending machine manufacturers (2013)
  • Figure 3.1: Examples of connected single-space and multi-space meters
  • Figure 3.2: Share of connected multi-space parking meters by vendor (World 2013)
  • Figure 3.3: Share of connected single-space parking meters by vendor (World 2013)
  • Figure 3.4: Parking meter offerings by vendor
  • Figure 3.5: Selected European and North American parking operators
  • Figure 4.1: Modal split of passenger transport on land (EU and NA 2010)
  • Figure 4.2: Bus and rail fleets in public transport (EU and NA 2010)
  • Figure 4.3: Evolution of fare payments
  • Figure 4.4: Fare collection device segments
  • Figure 4.5: Installed base of contactless fare collection devices (EU and NA 2012)
  • Figure 4.6: Scheidt & Bachmann fare collection devices
  • Figure 4.7: Almex fare collection devices
  • Figure 5.1: Cellular M2M connections in the retail industry (World 2013)
  • Figure 5.2: Cellular M2M retail device shipments by region (World 2012-2018)
  • Figure 5.3: Cellular M2M retail device connections by region (World 2012-2018)
  • Figure 5.4: Deployment of NFC and cellular technologies (World 2012-2018)
  • Figure 5.5: Cellular POS terminal shipments by region (World 2012-2018)
  • Figure 5.6: Cellular POS terminal installed base by region (World 2012-2018)
  • Figure 5.7: NFC POS terminal shipments by region (World 2012-2018)
  • Figure 5.8: NFC POS terminal installed base by region (World 2012-2018)
  • Figure 5.9: Installed base of wirelessly connected ATMs (EU and NA 2012-2018)
  • Figure 5.10: Installed base of connected vending machines (EU and NA 2012-2018)
  • Figure 5.11: Connected vending machine market forecast (NA 2012-2018)
  • Figure 5.12: Connected vending machine market forecast (Europe 2012-2018)
  • Figure 5.13: Connected parking meters (World 2012-2018)
  • Figure 5.14: Multi-space parking meter market forecast (World 2012-2018)
  • Figure 5.15: Single-space parking meter market forecast (World 2012-2018)
  • Figure 5.16: Installed base of contactless fare collection devices (EU and NA 2012-18)
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