2019 Worldpay POS Channel KPI Study: ISV Sales, Margins Are Growing

The results of the 2019 Worldpay POS Channel KPI Study suggest it’s a good time to be an ISV providing point of sale (POS) applications.

The sales and margin data revealed in the 2019 Worldpay POS Channel KPI (key performance indicators) Study suggest it’s a good time to be an ISV providing point of sale (POS) applications.

Worldpay surveyed its partners as well as partners of channel distributor BlueStar. Of the 162 respondents to the survey, more than half are ISVs or ISV/reseller hybrid businesses developing POS applications.

KPIs Show Sales are Increasing

Worldpay’s data from past surveys and respondents’ projections for 2019 indicate a steady increase in sales:

  2016 2019
Flat 9.5% 5.9%
1-4 percent growth 38.1% 11.8%
5-19 percent growth 33.4% 56.9%
20+ percent growth 28.6% 31.4%

Notably, the number of ISVs specifically reporting 40+ percent growth increased from 9.5 percent in 2017 to 27.4 percent last year.

The Worldpay study report indicates that the businesses with the most optimistic outlook for 2019 have and ISV/VAR hybrid model — one that includes both developing POS applications and reselling POS hardware or other solutions. Among those businesses responding to the survey, only 11.1 percent expect growth less than 5 percent this year, 66.7 percent anticipate growth from 5 to 19 percent, and 22.3 are expecting growth at a rate of 20 percent or more.

Are Margins Increasing or Decreasing?

Worldpay’s survey indicates that not only are sales growing for POS ISVs, but profits are also increasing.

  2016 2018 2019 (projected)
Loss 14.2% 3.3% 3.3%
Broke Even 14.2% 23.3% 6.7%
1-4 percent  0% 6.7% 13.3%
5-9 percent  14.2% 16.7% 10%
10-14 percent 0% 3.3% 20%
15-19 percent 14.2% 16.7% 13.3%
20-24 percent 7.1% 6.7% 0%
25-29 percent 7.1% 0% 10%
30-39 percent 21.4% 6.7% 6.7%
40-49 percent 0% 10% 6.7%
50-59 percent 7.1% 6.7% 6.7%
60+ percent 0% 0% 3.3%

Worldpay notes that each year of its survey, about one-fourth of POS ISVs report that they’re operating at a loss or they break even.

Percentage Offering Software as a Service

According to the Worldpay study, 100 percent of the POS ISVs surveyed have established recurring revenue streams, and 43.3 percent of them categorize their businesses as “completely transitioned.”

Of the remaining ISV survey respondents, 26.7 percent are “mostly transitioned,” 10 percent are “halfway transitioned,” and 20 percent are “partially” or “barely” transitioned.

Worldpay points out that their historical survey data shows, for the most part, that ISVs stopped resisting the move to cloud POS in 2017. In 2016, nearly one-third of POS ISVs hadn’t begun the transition to the Software as a Service recurring revenue model, although this year’s survey shows that all have.

How Does Your Business Compare to Your Peers’ and Competitors’?

The Worldpay study polled ISVs on other topics, such as how they recruit and compensate employees, the average revenue per employee, and R&D and marketing spending. They also asked about primary market, which appears to be shifting this year from broader categories of “hospitality,” “retail,” and “grocery,” to favor niches like beer distributors, car washes, dry cleaners, family entertainment, lawn and garden, retail pharmacy and salons.

The information included in the report can help you gauge how your business is faring compared to your competitors and peers, and the KPIs referenced in the report are also valuable metrics to track as you work toward your business goals.

You can read the full report and access all findings here

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Mike Monocello
The former owner of a software development company and having more than a decade of experience writing for B2B IT solution providers, Mike is co-founder of DevPro Journal.