Saudi Arabia POS Terminal Market - Growth, Trends, COVID -19 Impact, and Forecasts (2022 - 2027)

Saudi Arabia POS Terminal Market is segmented by Mode of Payment Acceptance(Contact-based, Contactless ), by Type( Fixed Point-of-sale Systems, Mobile/Portable Point-of-sale Systems), by End-User Industry (Retail, Hospitality, Healthcare)

Market Snapshot

Saudi Arabia POS Terminal Market
Study Period: 2020-2027
Base Year: 2021
CAGR: 7.7 %

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Market Overview

The Saudi Arabia POS Terminal market is expected to grow at a CAGR of 7.7 % over the forecast period (2022 - 2027). The POS terminal industry has grown significantly in recent years, owing to its capacity to provide a higher return on investment and ease of use. POS systems, which permit transactions from the key component of organizations in areas such as retail, hospitality, transportation, and banking, have grown in popularity in enterprises of all sizes over the years.

  • When a credit or debit card is used to pay for anything, a traditional point-of-sale (POS) terminal scans the magnetic strip, determines if there is enough money to transmit to the retailer, and completes the transaction. The sale is recorded, and a receipt is printed, emailed, or texted to the customer.
  • The current trend is away from the traditional proprietary technology and toward software-based POS systems that can be installed on a tablet or mobile device. To remain ahead of the competition, POS terminal manufacturers are launching their versions of portable and mobile POS equipment.
  • Merchants now have a range of PoS terminals, depending on their needs. Businesses may quickly convert their existing smartphones into POS terminals with soft POS by installing simple software, reducing the need for additional hardware installation, or employing employees qualified to manage this software, which supports market development.
  • POS systems can be found at major retail establishments and restaurants where owners recognize that customers do not like waiting to pay for a product or meal. Consumers consider factors like Price, function, and user-friendliness for POS systems. Some high-profile data breaches have happened using POS terminals with out-of-date operating systems. This can be a challenge for the POS terminal market.
  • Because of the COVID-19 pandemic, there was an increased demand for contactless payments, necessitating the installation of POS terminals equipped with NFC, RFID, and other technologies capable of accepting payments via contactless chip cards or digital interface cards.

Scope of the Report

A point-of-sale (POS) terminal is a hardware system for processing card payments at retail locations. A point-of-sale (POS) system combines computer hardware and software that manages transactions while selling a product or service. Software to read magnetic strips of credit and debit cards is embedded in the hardware. It helps in storing, collecting, sharing, and reporting sales transaction data. It improves the shopping experience and speeds up the checkout process, resulting in increased consumer satisfaction. Inventory management, stock in hand, product availability, and price information are the primary data obtained from the systems.

Saudi Arabia POS Terminal Market is segmented by Mode of Payment Acceptance(Contact-based, Contactless ), by Type( Fixed Point-of-sale Systems, Mobile/Portable Point-of-sale Systems), by End-User Industry (Retail, Hospitality, Healthcare)

BY Mode of Payment Acceptance
Contact-based
Contactless
BY Type
Fixed Point-of-sale Systems
Mobile/Portable Point-of-sale Systems
By End-User Industry
Retail
Hospitality
Healthcare
Others

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Key Market Trends

Increased Payments from NFC-Compatible Smartphones and Smart Cards

  • NFC is a wireless data transmission technique allowing smartphones, computers, tablets, and other devices to share data. Contactless payments are made possible via NFC technology, which is used in mobile wallets such as Apple Pay and Android Pay, as well as contactless cards.
  • Payment credentials are exchanged when an NFC-enabled smartphone or a credit or debit card is tapped against a POS terminal. This boosts transactional efficiency.
  • Increased demand for NFC POS terminals is driven by the growing number of supermarkets, specialized retailers, and hypermarkets. Saudi Arabia is one of the leading nations with the biggest revenue share in the market for NFC POS terminals. The Saudi population's growing demand for NFC POS terminals drives the need for NFC-compatible smartphones for payment.
  • Furthermore, companies are also launching new products and making partnerships to drive the POS terminal market growth. For instance, in November 2021, Geidea transformed digital payments within the SME space by launching Phone POS technology. The ability to transform smartphones into point-of-sale terminals empowers businesses of all sizes to gain a foothold in the online economy. Launch of Phone POS, Geidea entered into strategic partnerships with global payment institutions, including Mastercard, Visa, and major Saudi player SABB Bank to scale the technology across the Saudi Arabia region.
  • According to a survey conducted by Worldpay, The share of cash in Saudi Arabia declined in POS as credit cards and mobile wallets are increasingly being promoted in the country. The survey predicts that cash will stop being the majority payment method in physical stores by 2025 as wallets like Saudi Telecom's STC Pay are expected to increase user count. The Saudi Central Bank spoke of a major increase in contactless payments by October 2021, with contactless payments adoption being around 94 percent.
Saudi Arabia POS Terminal Market

Retail Sector driving the growth of POS Terminal Market

  • The retail industry is one of the significant users of POS terminals. The segment is expected to hold a substantial share in Saudi Arabia. The retail segment is slowly picking up with the reopening of brick-and-mortar stores in different parts of the region.
  • The growing requirement for various POS systems with a strong and centralized system among large retailers, supermarkets, and department stores has fueled the retail sector's consistent rise in the POS terminal industry. Because of its consumer mapping application, the greater emphasis on customer behavior has resulted in increased POS implementation.
  • Due to substantial discounts and other services, a rising number of retail businesses throughout regions attract clients; however, customer retention becomes a key challenge for them to continue in the market. This rivalry raises the need for companies to change their business models to compete on pricing and find a balance between investing in new technology and revenue. As a result, the demand for client retention and increased competitiveness in the market drive the rise of POS terminals.
  • In July 2022, UnionPay International Middle East Branch (UPI) recently increased its acceptance in Saudi Arabia due to a collaboration agreement with Bank Albilad (BAB). Coverage of UnionPay card POS terminals in Saudi Arabia is now at 50 percent, while coverage of ATMs is around 68 percent.
  • The top players are localizing their retail sites and capturing their slice of the market across Saudi Arabia. The local players in the POS terminal market are capturing the growing demand by adopting partnerships to grow their network and increase customer acquisition.
Saudi Arabia POS Terminal Market

Competitive Landscape

The Saudi Arabia POS Terminal Market is moderately competitive, with a considerable number of regional players. The companies leverage strategic collaborative initiatives, acquisitions, and product launches to increase market share and profitability.

  • June 2022 - Geidea, one of the leading fintech companies in Saudi Arabia, announced that it had entered a strategic partnership with Nayifat, one of KSA's pioneers in the financing space. As part of the collaboration, Geidea will provide Nayifat's customers with a full suite of POS solutions. This will empower merchants to accept payments via numerous methods – including contactless cards and wearable devices through Geidea's POS terminals and Tap-on-Phone solutions.

Recent Development

  • March 2022 - Bank AlJazira, JCB partner, to launch service in Saudi Arabia. The partnership complements the role of Saudi Payments, and Saudi Payments aims to accelerate the transition to a cashless society, in line with the Saudi Central Bank's policy and the Financial Sector Development Program's (FSDP) expectations for fulfilling the goals of the Saudi 2030 vision.
  • March 2022 - Geidea partners with Natcom. Under this agreement, Geidea will provide its SoftPos solution to NATCOM – empowering the company to transform everyday Handheld Computers into merchant Point of Sale (POS) terminals. Complemented with the easy-to-use Geidea mobile app, NATCOM will also benefit from complete visibility of transactions history, sales progress, user management, and reporting.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definitions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHT

    1. 4.1 Market Overview

    2. 4.2 Market Sizing and Estimates of Saudi Arabia POS Terminals Market

    3. 4.3 Industry Value Chain Analysis

    4. 4.4 Industry Attractiveness - Porter's Five Force Analysis

      1. 4.4.1 Bargaining Power of Suppliers

      2. 4.4.2 Bargaining Power of Buyers

      3. 4.4.3 Threat of New Entrants

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

    5. 4.5 Assessment of COVID-19 Impact on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Increased Payments from NFC-Compatible Smartphones and Smart Cards

      2. 5.1.2 Retail Sector Adopting the NFC POS Solutions Considerably

      3. 5.1.3 Significant Rise in the Demand for Contactless and Mobile POS Terminals

    2. 5.2 Market Challenges

      1. 5.2.1 Problems With Transaction Limit Installation Costs

      2. 5.2.2 Security Concerns Due to the Usage of Sensitive Information

    3. 5.3 Market Opportunities

      1. 5.3.1 Rising Adoption of Contactless Payment

  6. 6. MARKET SEGMENTATION

    1. 6.1 BY Mode of Payment Acceptance

      1. 6.1.1 Contact-based

      2. 6.1.2 Contactless

    2. 6.2 BY Type

      1. 6.2.1 Fixed Point-of-sale Systems

      2. 6.2.2 Mobile/Portable Point-of-sale Systems

    3. 6.3 By End-User Industry

      1. 6.3.1 Retail

      2. 6.3.2 Hospitality

      3. 6.3.3 Healthcare

      4. 6.3.4 Others

  7. 7. Competitive Landscape

    1. 7.1 Company Profiles

      1. 7.1.1 geidea

      2. 7.1.2 NEC Saudi Arabia Ltd

      3. 7.1.3 Oracle

      4. 7.1.4 PAX Middle East

      5. 7.1.5 Saudi Payments

      6. 7.1.6 VeriFone, Inc.

      7. 7.1.7 Toshiba

      8. 7.1.8 ADWAA AL SHUGAA

      9. 7.1.9 Ingenico.(Worldline)

      10. 7.1.10 Panasonic Marketing Middle East & Africa FZE

    2. *List Not Exhaustive
  8. 8. Investment Analysis

  9. 9. Future Outlook of the Market

**Subject to Availability

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Frequently Asked Questions

The Saudi Arabia POS Terminal Market market is studied from 2020 - 2027.

The Saudi Arabia POS Terminal Market is growing at a CAGR of 7.7% over the next 5 years.

geidea, NEC Saudi Arabia Ltd, Oracle, PAX Middle East, Saudi Payments are the major companies operating in Saudi Arabia POS Terminal Market.

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