Cloud POS Market

Market Overview

The global cloud POS market size was valued at USD 3,987 million in 2022 and is anticipated to reach USD 5,786 million in 2023. It is projected to reach USD 30,205 million by 2031, growing at a CAGR of 24.7% during the forecast period (2022–2030).

POS, or point of sale, generally refers to the location of purchase, such as a cashier's kiosk or a restaurant's hostess desk (or side table). Numerous businesses have realized the value and advantages of employing mobile devices as contemporary cash registers, which is one of the reasons cloud-based sales point (POS) systems significantly impact the retail industry. This results in an antiquated legacy system with specialized POS registration equipment and a significant economic revolution in many situations. These are rapidly being supplanted in corporate settings by a smartphone or mobile phone that uses sophisticated POS software.

Among the main factors propelling the market expansion is the improvement of workplace productivity, efficiency, and dynamic decision-making abilities of companies and businesses. Additionally, cloud POS systems save businesses money on operational and functional expenses, fueling the market's expansion during the projected period.

Market Dynamics

Drivers

1) Improving Workplace Efficiency, Productivity, and Dynamic Decision-Making Ability of Organizations and Businesses

A dependable Point of Sale (POS) system is essential for retailers to increase sales, track inventory, and provide top-notch customer service. On the other hand, non-tech savvy business owners could struggle to choose which POS system to invest in. The popularity of web-based and cloud-based point of sale systems has increased recently, demonstrating that they are a competitive alternative for small and medium-sized businesses. A Software as Service (SaaS) that can be accessed from the internet from any location and on any device can be used to deploy cloud-based POS.

Due to cloud POS systems, employees and managers can track and manage their company's sales data in real-time. Additionally, unlike traditional on-premises POS systems, which require users to utilize connected devices at a particular fixed place or connect to a local network, cloud-based POS solutions may be used from anywhere. Cloud POS systems give management and decision-makers flexibility and the opportunity to dynamically modify prices in response to consumer needs and other market competitors. Additionally, modern payment methods like contactless and NFC are available with cloud-based POS systems. Cloud POS systems increase sales effectiveness and aid in real-time customer data analysis, giving businesses more opportunities to cater their offerings to market needs.

2) Low Operational and Functional Costs of Cloud POS Solutions

The foundation of cloud-based POS solutions is the idea of easy scaling up and down; services can be added or removed at any time by the company depending on their and customers' requirements. Firms only pay for the services they utilize, saving money on the fail-safe mechanisms and conditions for future-proofing that traditional on-premises POS demands. Additionally, the solutions provider will take care of the maintenance and upkeep of cloud-based POS solutions, so business owners won't need to worry about these POS systems operating constantly.

Since the vendors and solution providers handle the maintenance, performance, and upkeep of cloud-based POS systems, businesses can operate with a smaller IT team internally, saving on the training and payroll expenses associated with maintaining a full-size IT department as required by the on-premises based POS solutions.

Restraint

1) Lesser Flexibility and Customizations than On-Premises Solutions

Customizations to the cloud POS systems are not possible with SaaS because of its deployment model. Larger businesses may want to use on-premises POS systems that can be readily customized to their brand and marketing needs. However, this consideration may not be a barrier for many small and medium stores with little to no time or money to tailor the POS colors and style.

Cloud POS solutions are designed to suit most types of projects as universal solutions. It is quite likely that the program requires certain unique features that will not be part of the offered clouds POS package. This affects the growth of the cloud POS market. In addition, cloud POS solutions, once integrated into a business organization, changing vendors can turn out to be even more expensive as employees may be needed to train for the new solution, making choices in the cloud POS solutions market very limited.

Opportunities

1) Growing Implementation of Cloud-Based Systems in Small and Medium-Sized Enterprises

Owners of small and medium-sized businesses are adopting the technology because cloud-based POS systems are simpler to set up and manage. Compared to most on-premises workstations, cloud-based POS systems need less equipment and rely less on complex networks. The advantages of cloud-based card payments and analytics offered by these POS systems may be utilized by business owners with just one machine deployed.

Regional Analysis

The global cloud POS market share is primarily studied across regions such as North America, Asia-Pacific, Europe, and LAMEA.

North America holds the largest market share and is estimated to grow at a CAGR of 24.1% during the forecast period. This is attributed to the increasing sales of IT hardware, digital hardware, POS systems, cloud subscriptions, mPOS agreements, futuristic handheld devices, tablets, and payment terminals in North America. The point-of-sale (POS) business in this region will undergo substantial changes due to the rising demand for new touch-screen technology integrated with cloud-based POS software.

Asia-Pacific is the fastest-growing region. Several Asia-Pacific countries, including India, China, and South Korea, have adopted cloud computing technology. The growing adoption will enhance the demand for cloud-based POS systems that slow down performance by storing data in a secure environment. Cloud technology also eliminates the difficulty of establishing on-premise data storage hardware. As small and medium enterprises face budget and spatial challenges, cloud technology helps store data efficiently without needing to build and expand quality servers. The growing implementation of cloud-based POS programs by restaurant owners and retailers in the Asia-Pacific will also boost the market growth.

Europe is the second-largest region in the cloud PCOS market. It is projected to reach USD 6,520 million, growing at a CAGR of 24.7% during the forecast period. The advent of the cashless economy with the launch of the mobile wallet in Europe would contribute to the growth of the regional cloud POS market.

Segmental Analysis

The cloud POS market share is segmented by component, services, application, and organization size. 

• On the Basis of Components

Based on components, the global market is segmented into Solutions and Services.

The Solution segment is the highest shareholder in the market and is estimated to grow at a CAGR of 24.8% during the forecast period. Numerous businesses have realized the value and advantages of employing mobile devices as contemporary cash registers, which is one of the reasons cloud POS systems significantly impact the retail industry. This results in an antiquated legacy system with specialized POS registration equipment and a significant economic revolution in many situations. Additionally, they are increasingly being supplanted in corporate settings through a smartphone that uses sophisticated POS software.

Services are the fastest-growing segment. Features such as enhanced flexibility, environmental adaptability, and ongoing functionality encourage end-users to adopt cloud POS in their business vertical. Another factor contributing to the demand for cloud POS is the low operating costs. The decline in non-cash transactions facilitates the growth of digital payments. This has a direct impact on the development of the POS market. Consequently, the market is also expected to have great opportunities during the forecast period. In addition, the advancements in cloud computing technologies provide ample market growth opportunities.

• On the Basis of Services

Based on services, the global market is segmented into Implementation & Integration, Training & Consulting, and Support & Maintenance.

The Implementation & Integration segment is the highest shareholder in the market and is estimated to grow at a CAGR of 25.5% during the forecast period. The need to adopt cloud POS is increasing due to the increasing number of e-commerce transactions worldwide. In countries such as India, consumers choose to pay after receiving products in a prepaid payment mode. This increases the need for mPOS terminals that can accept card payments. As a result, several eCommerce companies use mPOS terminals. Therefore, increasing e-commerce transactions worldwide exacerbates the need for cloud POS terminals.

The Support & Maintenance segment is the fastest growing. Developers in the cloud POS market offer custom-specific software solutions that are customized based on the performance of their business and provide time-bound support and maintenance. These factors are boosting the growth of the market. Cloud-based payment services are gaining traction, enabling technology developers to continue updating software as they progress toward business. These founders designed terminals compatible with EMV technology due to the influx of contact cards in the industry. Such features provide ample opportunities for this market.

Training & Consulting is the third-largest segment. Factors such as increased emphasis on business process performance, global e-commerce trade, and the increase in non-cash transactions exacerbate the rate of automatic transformation in industries such as shopping, entertainment, hospitality, and others. In the sales sector, the increase in automation is dominated by POS systems. With expanded benefits such as low cost, low data protection, customization, and downtime, the demand for POS is expected to grow in various end-user industries.

• On the Basis of Services

Based on applications, the global market is segmented into Retail & Consumer Goods, Media & Entertainment, Transport & Logistics, Travel & Hospitality, and Healthcare.

The Retail & Consumer Goods segment is the highest shareholder in the market and is estimated to grow at a CAGR of 23% during the forecast period. Digital transformation in retail and consumer goods has been gaining momentum, and the manufacturers are focusing on increasing their IT spending. According to Fujitsu, the Global Retail Digital Transformation Survey, about 39.8% of organizations increased their ICT budgets by 37.8%, which means that communication, networking, and cloud technologies, are gaining rapid demand throughout. In addition, the advancements in SaaS and cloud computing technologies are providing ample opportunities for the growth of the cloud POS market.

Travel & Hospitality cloud POS helps in payment processing, inventory management, customer management, and reporting. These features help maintain all the records and can be accessed later for a better customer experience. These factors are boosting the growth of the cloud POS market. Factors such as the increasing emphasis on business process efficiency, global trade, and rising revenue have exacerbated the rate of automatic change in industries such as tourism and hospitality. In addition, the adoption of cloud POS globally and competition among SMEs provide opportunities for the market.

• On the Basis of Organization Size

Based on organization size, the global market is segmented into SMEs and Large Enterprises.

The SMEs are the highest shareholder in the market and are estimated to grow at a CAGR of 24.5% during the forecast period. The software allows businesses to process and distribute data across different departments to improve customer experience and retention. In addition, competition among SMEs across regions and the latest developments in cloud technologies have provided great opportunities for market growth.

Large Enterprises are growing swiftly. The primary factor driving the market is the development of technology in cloud computing. Large businesses choose to use their services in the cloud. Therefore, the large industry has been developing POS systems using cloud computing. In addition, the technological advancements in IoT & cloud platforms and enhanced user experience provide market growth opportunities.

Recent Developments

• June 2022 - Oracle and Vodafone, the largest pan-European and African technology communications company, announced a strategic partnership to modernize the operator's European IT infrastructure and accelerate its transition to the cloud.
• June 2022 - Water and electric utilities adopted Oracle cloud solutions to get up and run faster, automate data management, and boost customer service.