Overview

The physical retail point-of-sale (POS) environment has experienced more disruption in the past two years than in the past 50 years since the modern-day general purpose revolving credit card was born. In the past two years, we have seen the introduction of Apple Pay and Android Pay, the steady rollout of EMV and NFC at in-store POS terminals, the launch of retailer apps that allow mobile checkout (e.g., IKEA), and the development of alternative networks such as Chase Pay and MCX (the latter launched a pilot and then abruptly canceled it). As the industry continues to evolve with new payment forms and networks, there are several critical trends retailers and financial institutions are facing that could affect how profitably they serve consumers. This report evaluates transaction activity in the physical retail POS market through 2020 and identifies the key factors effecting change. This report will also highlight individual product growth and share shifts at POS for cards (credit, debit, prepaid, and gift), cash, check, and mobile proximity payments. 

Key questions discussed in this report: 

  • What are the major trends in domestic retail POS payment transactions?
  • How are EMV and NFC merchant adoption affecting the in-store retail POS landscape?
  • How will cash and paper checks fare as card-based payment vehicles continue to grow in popularity?
  • Will traditional card-based payment options, including credit and debit, maintain current dollar volumes, or will nontraditional options such as prepaid cards and gift cards infringe on their share?
  • Will mobile proximity payments disrupt the current in-store POS payments ecosystem?
  • What factors influence consumer adoption and use of various payment options for in-store purchases?
  • How is the blurring of the lines between in-store POS and e-commerce affecting the retail market?

Companies Mentioned: American Express, Apple, Bank of America, CVS, Diners Club, Discover, Early Warning / clearXchange, Fandango, GasBuddy, Google, IKEA, Jamba Juice, JPMorgan Chase, Mastercard, MXC, Money20/20, Nordstrom, Papa John’s Pizza, Samsung, Starbucks, Target, Trader Joe’s, Visa, Walgreens, Walmart, Whole Foods

 

 

Methodology

Consumer

The consumer data in this report are based on information collected from Javelin online surveys that targeted respondents in representative proportions of gender, age, income, and ethnicity, compared with the overall U.S. population:

  • A random‐sample panel of 3,200 consumers in October 2015. The overall margin of sampling error is ±1.73 percentage points at the 95% confidence level.
  • A random‐sample panel of 3,000 consumers in September 2015. The overall margin of sampling error is ±1.79 percentage points at the 95% confidence level.
  • A random‐sample panel of 6,000 consumers in April/May 2015. The overall margin of sampling error is ±1.27 percentage points at the 95% confidence level.
  • A random-sample panel of 3,225 consumers collected online during July 2014. The overall margin of sampling error is +1.73 percentage points at the 95% confidence level.
  • A random-sample panel of 3,195 consumers collected online during July 2015. The overall margin of sampling error is +1.73 percentage points at the 95% confidence level.

Small Business

The consumer data in this report is based on information collected from several JAVELIN and Greenwich surveys that targeted businesses representative of U.S. businesses nationwide. The respondent profile was decision-makers or individuals who provide input on decisions regarding the payment products/services used by their company.

  • A random-sample panel of 250 businesses was collected online as a blind study without an identified sponsor during October 2013.
  • A random-sample panel of 250 businesses was collected online as a blind study without an identified sponsor during October 2014.
  • A random-sample panel of 1,000 businesses was collected online as a blind study without an identified sponsor during February 2016.

This report targets businesses with sales coverage from $100,000 to $10 million in annual revenue.

Micro business merchants ($100,000 to <$1 million), n=125 Small business merchants ($1 million to <$10 million), n=125