Smart Finance Hardware Market Report: Trends, Forecast and Competitive Analysis to 2035

Smart Finance Hardware Market

The future of the global smart finance hardware market looks promising with opportunities in the bank and financial institutions and independent ATM deployer markets. The global smart finance hardware market is expected to reach an estimated $26.4 billion by 2035 from $18.3 billion in 2027 with a CAGR of 6.8% from 2027 to 2035. The major drivers for this market are the rising adoption of digital payments and the security and fraud prevention needs.

• Lucintel forecasts that, within the type category, modules is expected to witness higher growth over the forecast period due to growing demand for modular, scalable financial hardware solutions.
• Within the application category, bank and financial institutions is expected to witness the higher growth due to increasing adoption of digital and contactless payments industry-wide.
• In terms of regions, North America is expected to witness the highest growth over the forecast period due to strong presence of financial institutions and early adoption of fintech.

Emerging Trends in Smart Finance Hardware Market

Smart finance hardware is transitioning from standalone payment devices to integrated secure financial infrastructure. Between 2025 and 2027, demand will be driven by the adoption of contactless payments, embedded intelligence, fraud, and modernization driven by banks. Lucintel's market outlook reflects industry trends toward interoperable devices, recurring software, and lower total value provided by products.

• Increased Contactless Payments: In April 2025, Visa disclosed that contactless payments accounted for over 80% of face-to-face transactions in several mature markets. SoftPOS is also driving wider acceptance of contactless payments among merchants. This trend will stimulate the demand for NFC-enabled POS terminals and biometric payment cards, as well as mobile-based payments, over the next decade.
• AI-based Security: 2025 saw Mastercard expand its biometric payment pilot and strengthen its PCI requirement for tokenization and device authentication. Hardware vendors are integrating edge analytics, liveness detection, and tamper sensors and reducing checkout fraud along with reducing the checkout time. Security analytics will determine how long hardware will be viable in the marketplace.
• Cloud-based Devices: In 2024, Adyen published its annual report and highlighted unified commerce and platform-based merchant services. This trend continues through 2025-2027. With cloud technology, operators can manage their devices remotely, and ease of installation will likely shift the value proposition from hardware sales to operational services.
• Sustainable Design: In 2025, terminal design will be impacted by the Emission Trading System (ETS) and the USB-C policy. The EU's USB-C policy will go into effect in December 2024. Longer device life, modular design, recyclable plastics, and primarily repairable power supply systems will be highly regarded in purchasing decisions. Banks and retailers will be looking to reduce waste associated with equipment.
• Tap-to-pay: As 2025 progressed, Apple, banks, and payment processors focused on more tap-to-pay options, meaning that traditional card readers will become less essential. It is expected that the next three to five years will bring even more opportunities to tap-to-pay in software, retail, automotive, kiosks, and workflows.

Over the next few years, hardware will continue to relate back to the modernization of payments. However, competition is focusing on less time consuming payments. Vendors that are able to incorporate secure hardware into cloud integrated form factors and be transparent about authentic sustainable practices should capitalize on the replacement demand. Hardware only suppliers will experience margin erosion, integrated solutions can create long standing recurring business with banks, merchants, transportation, and government services.

Recent Developments in the Smart Finance Hardware Market

Moving toward 2025 and beyond, hardware devices for smart finance are transitioning from single-purpose connected payment authentication devices to devices that provide embedded financial services. This trend will especially take off in the next few years as banks replace their older payment terminals and as merchants demand lower serving costs. Lucintel maps this trend across ATM, POS, and biometric devices.

• Payment Consolidation: In February 2025, Global Payments announced the acquisition of Worldpay for $24.25 billion. This merger brings more integration of the hardware decision-making process for merchants and the payment acquiring process. For the next five years, having a seamlessly integrated terminal, software, and payment processing will be an advantage for vendors, putting pressure on smaller vendors.
• Expanded ATM Services: In 2024, NCR Atleo reported $1.4 billion in revenue and increased its offerings for managed services. The move from providing hardware to hardware availability as a service agreement creates a consistent revenue stream for hardware aftermarket services.
• Digital Identity Compliance: In January 2025, the Digital Operational Resilience Act went into effect in the EU. This law places penalties of up to €10 million on operators of digital services for serious operational failures and data breaches. This will create the need for banks to invest more in technology and hardware for authentication and security which will give advantages to hardware suppliers.
• Merchant Platform Rollout: In April 2025, Fiserv extended Clover to Germany which further developed its integrated point-of-sale model outside of North America. The expanded use of the platform puts pressure on Terminal vendors to create integrations with verticals and provide recurring merchant services.
• Localized Component Sourcing: During 2025, Huawei has a predicted 20% increase toward investing in smart devices. This will increase regional sourcing for the entire electronics supply chain. Although localized production will lessen the exposure to trade restrictions and lessen time to ship, it will also negatively impact the consistency of suppliers.

During the forecast period, the value will shift from boxes to managed platforms. Banks and merchants will buy less, but spend more on security, uptime, and software integration. Through consolidation, scale will grow rapidly. Suppliers of certified designs, service capacity, and a consistent, reliable revenue stream will gain market share. The terminal manufactures that do not differ from their competition will experience decreasing profits and an increasing demand to replace their products within the next 4 years.

Strategic Growth Opportunities in the Smart Finance Hardware Market

The smart finance hardware market is currently undergoing a major rebalancing as the increasing importance of contactless payments, embedded finance, and anti-fraud technologies is reshaping the buying priorities of banks, retailers, and fintech during the period of 2024 to 2026. Lucintel suggests that there is an opportunity for suppliers that integrate hardware, software, and lifecycle services.

• Biometric Payment Terminals: The use of biometric payment cards and readers is moving beyond many pilot projects; as of April 2025, Mastercard reported that over 3 billion tokenized payment cards had been issued. As issuers pursue stronger authentication, the use of biometric payment systems will grow beyond readers and cards.
• Self-service Finance Kiosks: The trend towards the rationalization of branches is creating a market for Kiosks that can automate cash transactions and other branch services and offer transaction verification and other identity services. By February 2025, NCR Atleo reported that over 550,000 ATMs were in active use.
• Embedded Finance Devices: Lenders and vertical software providers need terminals that can make real-time credit decisions and perform account transactions. Stripe processed $1.4 trillion in total volume, reported in February 2025. The market for these devices will grow as finance critically integrates with the workflow of merchants.
• Sustainable Payment Hardware: Banks are evaluating payment terminals based on the integration of recycled plastic and designs with lower energy consumption. By June 2025, Visa reported that 300+ eco-friendly payment card products are available. As sustainability requirements increase, premium payment terminals will include more certified materials.
• Managed Hardware Services: Financial clients are now leaning towards monthly agreements that cover deployment, monitoring, replacement, and compliance updates. Diebold-Nixdorf projected software and services revenue to be in the €1.1 billion range in 2024 that was shared early in March 2025. More predictable services will provide prolonged supplier relationships and shorter timeframes when suppliers are switched.

In the future, less revenue would be attributed to shipments of goods, and more revenue would be attributed to each individual good. The ability to integrate services that encompass identity, payments, analytics, and remote maintenance would allow suppliers to protect their margins during their clients' vendor consolidations. Cash withdrawal access is declining, and along with regional banks, underserved merchants would be high potential clients as well. Clients' procurement departments would be more likely to purchase from suppliers that provide measurable uptime, security certifications, and improved repairs coupled with flexible financing. The strongest competitors in the next five years will sell their operating capability as a service, developing their products to match the local regulations and economicus of transactions.

Smart Finance Hardware Market Drivers and Challenges

The smart finance hardware market is impacted by technology, the economy, customer preferences, and regulations. The demand for secure, convenient, connected payment devices is increasing across banking, retail, transportation, and financial services. Product capabilities are evolving with artificial intelligence, biometric authentication, contactless payments, and cloud connectivity. According to Lucintel, during the next several years, growth will be impacted by innovation, infrastructure investments, and the balance of cost versus value. There will be growing competition from limits on cybersecurity, difficulty in the supply chain, and regulations. All market participants will have to find a balance in cost, security, sustainability, and interoperability to be successful in both developed and developing markets in the coming years.

The factors responsible for driving this market include:

• Customer Preferences: Today's consumers demand fast, safe, and easy financial transactions. Any merchant, including payment service providers, that have not installed payments equipment that support digital payment systems, contactless, and real-time transactions will be at a competitive disadvantage. It is estimated that by 2025, over 60% of all in-person card transactions in developed markets will be contactless. During the next three years, there will be a significant increase in consumer demand for devices that enable check-out transformation. Merchants and payment service providers will have to update their payment terminal hardware to offer the services necessary to support multifunctional payment, identification, loyalty, and access devices to help financially underserved customers.
• Technology Improvements: Improved artificial intelligence, software, sensors, computing, and wireless technology allow smart finance machines to identify fraud, authenticate customers, perform transactions with or without contact with a central system, and receive updates. Around March 2025, some payment technology companies released terminals with the capability of using AI generative technology to help merchants or to evaluate transactions. These technologies will dominate the market in the next three to five years. They provide more tailored products, fraud detection is faster, cost of operations is lower, and there are more intelligent machines deployed at payment outlets in transit systems, at retail shops, in ATMs, and in other payment machines.
• Regulatory Support: Governments and financial agencies support the ease and security of payment transactions and the inclusion of digital identity by establishing legal electronic payment systems and strong authentications. Regulations promoting tokenization and payment-related data security and accessibility are creating demand for hardware that complies with the law. In January 2025, the EU continued its implementation of the revised Payment Services Directive along with the digital operational resilience regulations and required member states to improve payment technology and security. In the next three to five years, modernization of regulations will provide an opportunity for hardware vendors, increase demand for devices supporting payment assurance and security including biometric control and verification, and support the secure and efficient updating of software.
• Sustainability: Concerns about the environment have prompted manufacturers and banks to design energy-efficient terminals, devices, and payment cards that can be repaired and are made from recyclable components. Banks and merchants are starting to look at the total cost associated with purchasing hardware, package shipping, and power consumption, and the total cost associated with electronic waste. April 2025 saw financial technology providers expand their recycled-plastic payment card programs, with some cards being made of more than 70% recycled material. In the next 3-5 years, sustainability will influence purchasing decisions, product development, and the selection of business partners. Innovations that help banks and merchants reduce energy use, extend product lifespan, and provide recycling may improve relationships with institutional customers and regulators.
• Manufacturing Efficiency: Designs using modular architecture and automating assembly have been augmented by semiconductor design and contract manufacturing. Standardized components aid the customization of payment terminals to accommodate the needs of varied payment networks, languages, security, and connectivity. In June 2025, the manufacturers started to use automated inspection systems on production lines. A greater than 20% reduction in defect rates was achieved in selected production lines. In the next 3-5 years, greater manufacturing efficiency will be evident in small business and growing economy installations, leading to greater profitability and reduced delivery times, and improved compliance with regional business requirements.

The challenges facing this market include:

• Cybersecurity: Smart finance hardware and software are susceptible to malware, physical attacks, skimming, credential theft, network attacks, and software vulnerabilities. More intelligent devices and remote management of hardware means a single weakness can affect a large number of terminals or cards simultaneously. According to cybersecurity researchers in February 2025, payment ecosystems experienced software vulnerabilities caused by connected financial technologies on a monthly basis. As the sophistication of attacks increases over the coming three to five years, there will be rising demand for secure elements, encryption, biometric authentication, hardware monitoring, and rapid updating of software. There will be a stronger demand in the market for higher security elements which will increase the price for smaller vendors, require more integration in the systems, and delay time to market.
• Supply Chain: Smart Finance hardware consists of several elements including semiconductors, displays, batteries, secure chips, sensors, specialized plastics, and logistics networks across multiple geographic locations. Volatility in the geopolitical landscape, export controls, disruptions in shipping, and fluctuations in the costs of raw materials result in shortages and prolonged delivery. In May 2025, advanced chips caused lead-time uncertainty for electronics manufacturers, and the procurement of some specialized components exceeded 20 weeks. Over the next three to five years, the volatility of the supply chain will encourage regional production, inventory buffering, component standardization, and dual sourcing. While these strategies will improve resilience, they may increase final prices for banks, merchants, and consumers.
• Compliance and Interoperability: Hardware vendors need to clear different certification, privacy, accessibility, cybersecurity, payment networks, and data localization requirements for different countries. Devices also need to work with multiple banks, wallets, card networks, OSs, and legacy devices. In July 2025, several regions reported financial services firms performing advanced operational resilience and authentication transactions preparation. This creates more work for technology vendors on certification. Fragmented standards will impact international business growth and increase engineering and product certification costs for the next 3-5 years. Vendors with a modular approach, open APIs, automation, and compliance management will be best positioned to tackle regional challenges.

Growth in smart finance hardware will be driven by demand from end users, merchants, and financial services firms for faster, secure, and interconnected transactions. There will be more demand from both developed and emerging markets due to improving technology, emergence of new regulators, sustainability, and manufacturing efficiencies. The need for innovation will come from cyber threat, supply chain overhead, and standards fragments. The firms that will win will have secure products and services that are cost effective with low energy usage. The next three to five years will show the greatest difference between firms based on the speed they innovate, sourcing, partnerships, and the ability to serve the needs of the various individual markets and regions at a high level of performance.

List of Smart Finance Hardware Market Companies

Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies smart finance hardware market companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the smart finance hardware market companies profiled in this report include-

• Diebold Nixdorf
• NCR Corporation
• Miles Technologies
• Intel Corporation
• Microchip Technology
• IMS Evolve
• Incorporated

Smart Finance Hardware Market by Segment

The study includes a forecast for the global smart finance hardware market by type, application, and region.

Smart Finance Hardware Market by Type [Value ($B) from 2019 to 2035]:

• Modules
• Sensors
• Others

Smart Finance Hardware Market by Application [Value ($B) from 2019 to 2035]:

• Bank & Financial Institutions
• Independent ATM Deployer

Smart Finance Hardware Market by Region [Value ($B) from 2019 to 2035]:

• North America
• Europe
• Asia Pacific
• The Rest of the World

Country Wise Outlook for the Smart Finance Hardware Market

The activities of participants in the smart finance hardware market are caused by the upgrades in payment networks, the prototyping of digital currencies, and government-sponsored initiatives. From 2025 to 2027, suppliers will focus on the acceptance of cash, cash infrastructure, and payment devices that are manufactured locally. Lucintel's recent analysis shows that these factors will be instrumental to the competitive landscape.

• United States: Visa and Mastercard continued to implement tokenized, contactless acceptance, and by January of 2025, more than 1,000 institutions signed on to use the FedNow Service offered by the Federal Reserve. Each of these efforts supports the eventual need to replace old terminals and create demand for secure, network-connected hardware for acceptance over the next three to five years.
• China: The People's Bank of China continued to implement e-CNY hardware wallets, including wearables and card-based wallets, and UnionPay increased the hardware acceptance infrastructure for transactions, both merchant-based and cross-border. By December of 2025, more than 10 billion e-CNY wallets were deployed, increasing the demand for hardware POS, identity, and secure elements.
• Germany: The preparatory work of the Bundesbank and the ECB on the digital euro, coupled with the work of Diebold Nixdorf on automated teller systems and self-service systems, continued in 2025. The digitization of the euro and the modernization of cash services will influence the replacement of hardware terminals, authentication systems, and ATMs through 2030.
• India: The Reserve Bank of India showed UPI handling 18.3 billion transactions in March 2025. Domestic manufacturers and fintech firms deployed QR, Soundboxes, and micro-ATMs. It is pushing firms to build low cost connected devices and will likely cause mass connectivity of hardware to small merchants over the next 3-5 years.
• Japan: METI kept its cashless payment policy in favor of a national cashless ratio of 39.3% for 2023 (published June 2024), with government programs to continue through 2025. Expanding contactless acceptance and terminal upgrades will sustain payments hardware investment for interoperability.

Features of the Global Smart Finance Hardware Market

• Market Size Estimates: smart finance hardware market size estimation in terms of value ($B).
• Trend and Forecast Analysis: Market trends (2019 to 2026) and forecast (2027 to 2035) by various segments and regions.
• Segmentation Analysis: smart finance hardware market size by type, application, and region in terms of value ($B).
• Regional Analysis: smart finance hardware market breakdown by North America, Europe, Asia Pacific, and Rest of the World.
• Growth Opportunities: Analysis of growth opportunities in different type, application, and regions for the smart finance hardware market.
• Strategic Analysis: This includes M&A, new product development, and competitive landscape of the smart finance hardware market.

Analysis of competitive intensity of the industry based on Porter's Five Forces model.

If you are looking to expand your business in this or adjacent markets, then contact us. We have done hundreds of strategic consulting projects in market entry, opportunity screening, due diligence, supply chain analysis, M & A, and more.

This report answers following 11 key questions:

• Q.1. What are some of the most promising, high-growth opportunities for the smart finance hardware market by type (modules, sensors, and others), application (bank & financial institutions and independent ATM deployer), and region (North America, Europe, Asia Pacific, and the Rest of the World)?
• Q.2. Which segments will grow at a faster pace and why?
• Q.3. Which region will grow at a faster pace and why?
• Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
• Q.5. What are the business risks and competitive threats in this market?
• Q.6. What are the emerging trends in this market and the reasons behind them?
• Q.7. What are some of the changing demands of customers in the market?
• Q.8. What are the new developments in the market? Which companies are leading these developments?
• Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
• Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
• Q.11. What M&A activity has occurred in the last 8 years and what has its impact been on the industry?