The number of POS terminals is shrinking across several mature markets, most notably the UK and the Nordics, signaling a sustained downward trajectory for traditional devices. This decline is being propelled by a mix of macro-economic pressures, accelerated retail digitalization, and the growing adoption of alternatives such as SoftPOS. If this trend marks the beginning of the end for traditional POS terminals and a preview of what may unfold in the rest of Europe, key stakeholders (e.g., OEMs, PSPs) must urgently begin adapting their propositions for the future.
1. Number of Traditional POS Terminals in Circulation
(2024, in $ millions)
2. Key Drivers of the Decline of Traditional POS Terminals
(select observations from Flagship Advisory Partners; non-exhaustive)
- Physical Retail Contraction: A steady reduction in brick-and-mortar locations continues to shrink the addressable base of traditional POS hardware. In the UK, retail outlet counts fell by 5% between 2022 and 2024 as labor, rent, and operating costs rose.
- Digitalization of Physical Retail: Retailers are accelerating in-store digitalization. Fixed checkout counters are giving way to mobile checkout flows via customers’ own devices. In Sweden, 24% of surveyed Nordic retailers now use mobile-app self-scanning, eliminating the need for a fixed POS terminal hardware.
- Growing Use of SoftPOS: SoftPOS or ‘tap-to-pay’ continues to see increasing adoption. Uptake is scaling not only in small merchant use cases, but in large retail with SoftPOS enabled via ISVs. In Denmark, for example, SoftPOS powers 60% of Coop’s (large Danish retailer) self-checkout transactions.
- Tech Lifecycle & Replacement: Device strategies are evolving toward BYOD and Mobile Device Management (MDM) fleets. This marks a break from traditional POS-terminal lifecycles, with their long, hardware-centric refresh cycles. Retailers increasingly prefer multifunctional mobile devices that can be redeployed flexibly.
Implications for Industry Stakeholders
- POS Terminal OEMs: With demand for traditional POS terminals declining, OEMs must pivot from hardware-centric models to software-driven propositions, embrace SoftPOS, and invest in lifecycle management and DaaS propositions, while exploring adjacent segments (e.g., smart kiosks).
- Payment Providers: Payment providers with a POS-oriented proposition need to transition from a hardware-first strategy to a unified, software-led solutions with SoftPOS alongside hardware and offer vertically tailored unified commerce proposition that embeds digital-first forms (e.g., QR payments).
Please do not hesitate to contact Yuriy Kostenko at Yuriy@FlagshipAP.com with comments and questions.