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Yahoo
a day ago
- Business
- Yahoo
How European SaaS platforms can unlock €3bn in hardware revenue
Over the past few years, the convergence of software and payments has captured the imagination of the fintech and SaaS (Software as a Service) world. And rightly so—bundling payments with software platforms saves time, streamlines operations, and simplifies financial workflows for merchants of all sizes. It's a win-win: merchants benefit from greater ease and efficiency, while platforms unlock valuable new revenue streams. Yet, amid all the buzz around integrated payments, one piece of the puzzle remains significantly underexplored: hardware. Specifically, Point of Sale (POS) terminals—often treated as an after-thought rather than a strategic revenue stream—are quietly sitting on a €1bn+ opportunity. We tend to get caught up in the eCommerce world, but in Europe over 70% of card volume is still face to face and hardware is vital in a whole range of verticals from retail to transit, hospitality to construction. And for SaaS companies, it's an open door that remains largely untouched. Let's start with the numbers. There are roughly 23 million POS terminals across Europe. Around 70% of these are deployed by large enterprises, which usually purchase their terminals directly from manufacturers. But it's the small and medium-sized business (SMB) segment that holds the untapped value. According to recent SMB survey data conducted by PSE Consulting, 45% of European merchants—with peaks of over 60% in markets like the UK—are either already using or are highly likely to adopt payment services via a software platform. These smaller merchants typically lease their POS terminals for €20–22 per month, and this figure can fluctuate based on country and terminal type. Even with conservative assumptions, that translates into an annual hardware revenue pool of €800m to €1bn. Over the standard 3–4-year contract term, that becomes a €2–3bn opportunity—or around €700–800 per merchant. And that doesn't account for the circular potential of refurbished and redeployed terminals, which can further amplify returns. PSE Consulting's experience indicates that some Payment Service Providers (PSPs) already see 20–30% of their SMB revenue coming from terminals. So, the question is clear: if PSPs are capturing this margin, why aren't SaaS platforms doing the same? From a business standpoint, POS hardware can be extremely attractive. According to internal data from PSE Consulting, a typical terminal costs around €250 to purchase, while monthly lease rates deliver gross margins of up to 65%. Even after accounting for financing, repairs, logistics, and support, this remains a highly profitable revenue stream—especially considering that merchants often have more than one terminal. In the UK, for instance, the average is 1.6 terminals per merchant, further boosting revenue potential. Beyond the numbers, there are strategic advantages too. Unlike payment processing contracts—heavily regulated under PSD2 and often cancellable by merchants with minimal notice—hardware contracts can lock in customers for up to five years. That provides a level of stability and predictability rarely seen in modern SaaS. Many SaaS providers are already halfway there. If you're shipping physical hardware such as scanners, printers, or cash drawers, adding a payments terminal is a relatively small additional step. And for platforms with concentrated regional customer bases, warehousing and logistics are logistically feasible and economically efficient. The real power comes when SaaS platforms go beyond traditional POS. Some of the most exciting growth areas involve vertically tailored hardware bundles. Square, for example, offers a self-ordering kiosk for quick service restaurants at £35 per month, while SumUp provides all-in-one POS bundles—including screens, scanners, and drawers—for around £49 per month. SoftPOS—also known as Tap to Pay—is poised to further disrupt this space. Instead of relying on a traditional terminal, SoftPOS turns any NFC-enabled device into a payment terminal. Sainsbury's, for instance, has launched a Zebra device with SoftPOS functionality, enabling consumers to tap their cards to their self-scan 'gun' anywhere in the store, no check-out queue, no fuss. This evolution means that in the near future, SaaS platforms will be best positioned to offer flexible, software-led hardware bundles that traditional PSPs simply can't support at scale. The future of in-person payments is not just about taking card transactions—it's about owning the entire in-store device estate. For SaaS platforms and their investors, the question now is how to act. Here are five steps to unlock this hidden billion-euro market: Segment your customer base. Understand what types of hardware different verticals require. The more tailored the solution, the greater the value you can create—and charge for. Explore terminal sourcing. Talk to PSPs, hardware manufacturers, and local finance providers to understand your procurement and financing options. Aim to support both purchase and rental models. Understand the regulatory landscape. Make sure you are clear on security (PCI DSS) obligations, leasing contract structures, and any local rules on bundled services. Create bundled pricing packages. Develop flexible, transparent packages that combine hardware and payments processing. Make it easy for merchants to buy, upgrade, and scale. Train your sales teams. Ensure they can clearly articulate the value of bundled solutions—not just in cost savings, but in reliability, support, and tailored hardware experiences. In a world increasingly obsessed with digital transformation, it's easy to overlook the physical components that still matter. But for millions of merchants across Europe, hardware isn't optional—it's essential. For SaaS firms, that means a great opportunity to future diversify payments revenues and aid SaaS revenue retention —all while riding the continued momentum of embedded payments. Payment transactions may be going digital, but merchant needs are still very much physical. It's time for SaaS companies to stop ignoring the terminal—and start building a truly full-stack solution. Tom Hay is a Senior Manager at PSE Consulting "How European SaaS platforms can unlock €3bn in hardware revenue" was originally created and published by Electronic Payments International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Daily Record
07-05-2025
- Business
- Daily Record
'Cash rule' warning for UK tourists in Spain, France and Portugal amid power outage threats
Holidaymakers have been urged to ensure they are carrying physical cash Brits planning to travel to Spain, Portugal and France this summer have been warned to carry cash following last week's massive power outage on the Iberian peninsula. On Monday, April 28, the countries were hit with a widespread power cut that affected everything from metro lines to air travel. During the blackout people were unable to use their bank cards and cash machines, meaning they had no funds to pay for essential items. And amid the threat of further outages, European Union holidaymakers have now been warned to ensure they are keeping coins and banknotes on them during future holidays. Chris Jones, director of PSE Consulting, said: 'The widespread outages across Spain, Portugal and some parts of France earlier this week are a stark reminder of why cash remains essential. "As digital transactions dominate more aspects of daily life, we risk overlooking the fundamental resilience that physical money offers during periods of disruption, reports Birmingham Live. Join the Daily Record WhatsApp community! Get the latest news sent straight to your messages by joining our WhatsApp community today. You'll receive daily updates on breaking news as well as the top headlines across Scotland. No one will be able to see who is signed up and no one can send messages except the Daily Record team. All you have to do is click here if you're on mobile, select 'Join Community' and you're in! If you're on a desktop, simply scan the QR code above with your phone and click 'Join Community'. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don't like our community, you can check out any time you like. To leave our community click on the name at the top of your screen and choose 'exit group'. If you're curious, you can read our Privacy Notice. 'When systems fail — whether due to technical issues, cyberattacks, or power outages — access to cash ensures that people can still buy essential goods and services. In emergencies, cash becomes more than just a payment method; it is a vital safety net 'While cash usage continues to decline across Europe, events like this reinforce why maintaining robust access must remain a priority. This includes identifying and supporting critical services – such as supermarkets, petrol stations and pharmacies – to ensure they can continue accepting cash when digital systems are down. "Countries like Sweden and Norway have already recognised this, encouraging citizens to keep emergency cash and reinforcing cash acceptance in key parts of the economy. 'As we continue to move towards a more digital economy, policymakers and businesses must not lose sight of the need for balance. "Protecting access to cash isn't just about supporting vulnerable groups — it's about ensuring the whole economy can function when digital systems falter. "[This week's] outage is a clear reminder: in times of crisis, cash still counts.' While it had been considered the outage could have been caused by a cyber attack, the possibility was ruled out by officials. Extreme weather and variations in temperatures have been blamed for the sudden power disruptions, with officials attributing the outages to a "rare atmospheric phenomenon". Prof Jianzhong Wu, the head of the school of engineering at Cardiff University, told the Guardian blackouts 'can happen anywhere'. 'Despite today's high standards of reliability, low-probability but high-impact blackout events can still happen. "These networks are not designed to be completely blackout-free because achieving such a level of reliability would require investment far beyond what is economically feasible,' he said. Charmalee Jayamaha, a senior manager at the UK government-backed Energy Systems Catapult, said: 'No system can be 100% resilient,' so risks 'need to be balanced with our willingness to pay to reduce them'.
Irish Examiner
03-05-2025
- Business
- Irish Examiner
Why cash is still king: Ireland warned after Spain's digital payment blackout
One could only feel sorry for the flustered shopkeepers on the beachfront boardwalks along Spain's sunshine coasts this week, holding impromptu sales as their stock literally went into meltdown. The electricity power failure which swept the Iberian peninsula meant ice-cream shops had plenty of treats to sell, but a short window to sell them. With electronic payment options shut down by the power cut, customers without hard cash had no method to pay, even at knockdown prices. The Spanish experience has highlighted how Ireland is vulnerable to similar shortcomings. Contactless payments now make up almost nine out of every 10 card payments in shops, restaurants, and retail outlets. More than 1.5bn contactless payments were made in 2024, valued at €26.7bn, according to the Banking & Payments Federation Ireland's (BPFI) Payments Monitor. When electronic payments are unavailable, the old mantra of cash being king quickly becomes apparent. Chris Jones is managing director at PSE Consulting, a specialist business and technology payments system advisory company, and has advised on major payments infrastructure projects across Europe. "The widespread outages across Spain, Portugal, and some parts of France earlier this week are a stark reminder of why cash remains essential," he said. "As digital transactions dominate more aspects of daily life, we risk overlooking the fundamental resilience that physical money offers during periods of disruption. Passengers wait outside Atocha train station during a nationwide power outage in Madrid, Monday, April 28, 2025. (AP Photo/Manu Fernandez) 'When systems fail — whether due to technical issues, cyberattacks, or power outages — access to cash ensures that people can still buy essential goods and services. In emergencies, cash becomes more than just a payment method; it is a vital safety net.' There are now 1.07bn individual banknotes, with a value of €51.8bn, issued in circulation in Ireland since the introduction of the euro in 2002. There are 4.6bn individual coins - with a value of €800m - in circulation. A Central Bank of Ireland spokesperson said that while the use of cash in Ireland is declining, it plays a vital role for "financial inclusion, ensuring the financial services needs of some consumers are served. It is very clear there is a continued societal and economic demand by households and businesses to be able to use cash as a means of payment." The European Central Bank's 2022 study on payment attitudes of consumers in the euro area found that 64% of Irish respondents stated the option to pay by cash is either very important or fairly important. This was the joint highest in the euro area countries. Electronic and non-cash payments for shopping and household bills continued at pace in recent years. BPFI research found those aged over 55 are least confident in using any of the new banking and payment technologies. But that continued faith in cash makes them most resilient to electronic payment failures. More than half of all contactless payments are now made using mobile wallets such as Apple Pay or Google Pay, rather than cards, and younger cohorts are most reliant on phone and watch technology to make those payments. Most don't carry cash. Some don't have physical bank cards. The cause of the power outage in Spain and Portugal is still unclear. Cathal McSweeney, director of public and international affairs at Cork Chamber said the power outages are a stark reminder of the critical importance of energy security and resilience, 'particularly for a digitally driven economy like Ireland's. Ensuring a stable and future-proof electricity supply requires continued investment in generation and in our national grid.' An EirGrid spokesman said Ireland's State power transmission operator is continuing to 'closely monitor' outcomes of ongoing investigations into the Spanish and Portuguese incidents for "insights that may be of relevance to the operation of Ireland's power system to enhance ongoing measures designed to safeguard the resilience of the Irish electricity grid". Ireland had its own widespread power outage earlier this year, when 768,000 people were without electricity at the height of Storm Eowyn. Mobile communication was also cut off in many areas. What were once considered extreme weather events are now occurring with alarming regularity. Meanwhile cyber threats are a constant threat. Marks & Spencer saw its systems compromised over the Easter weekend by hackers while the HSE cyber attack in 2021 showed that hackers will target states too. Last October, then finance minister Jack Chambers published the National Payments Strategy noting the importance for 'appropriate system-wide contingency arrangements' to prepare for and manage disruptions to payment services. Banks and the fintech sector have prioritised and invested in the operational resilience of payment systems, the BPFI said. 'In the event of a widespread power outage in Ireland, as with many other types of vital services, some payment methods may be affected, but there are many variables involved depending on the particular scenario,' a BPFI spokesperson said. In preparing the National Payments Strategy, three submissions were received from public bodies specifically addressing resilience, with many more calling for enhanced resilience in the overall payments system, including through the use of cash for contingencies. The suggestions included that Ireland needs a national group on system-wide contingency arrangements for payment services. BPFI, representing over 125 banks and financial institutions, said it continues to work closely with the Department of Finance and the Central Bank to support key National Payments Strategy actions on resilience and crisis preparedness. Events in Spain and Portugal highlight the importance of personal preparation, and that keeping ready cash close at hand is now more important than ever. 'Events like this reinforce why maintaining robust access must remain a priority," said Mr Jones. "This includes identifying and supporting critical services – such as supermarkets, petrol stations, and pharmacies – to ensure they can continue accepting cash when digital systems are down. Countries like Sweden and Norway have already recognised this, encouraging citizens to keep emergency cash and reinforcing cash acceptance in key parts of the economy. 'As we continue to move towards a more digital economy, policymakers and businesses must not lose sight of the need for balance. Protecting access to cash isn't just about supporting vulnerable groups — it's about ensuring the whole economy can function when digital systems falter. The outage is a clear reminder: in times of crisis, cash still counts.'
