The Future of Retail Payments in India: How Zoho Payments’ Hardware Launch Signals Bigger Trends

Zoho’s recent foray into payments hardware — launching an all-in-one POS terminal, smart POS devices, static QR and soundboxes under the Zoho Payments brand name — is larger than a new product launch. It’s a harbinger that Indian retail payments are heading into a new age: one where software platforms already resident in firms are powering downstream into physical payments, marrying point-of-sale hardware, payments rails and back-office finance tooling. Zoho made the announcement in October 2025 and was widely covered by the Indian media.

It’s noteworthy, here’s why — for merchants, competition, regulators and the future of India’s everyday payments.

1) From cloud software to end-to-end commerce stacks

Zoho built its reputation on business software — accounting, payroll, CRM — and added payments capabilities (Zoho Payments) and regulatory approvals last year. Now, by introducing POS hardware that connects to its finance and inventory apps, Zoho is completing the merchant stack: sales → payments → accounting → reconciliation in one ecosystem. This reduces integration friction for small and medium-sized enterprises (SMBs) that cope with numerous vendors today and offers Zoho stickiness through cross-selling. Close device-app sync, billing, receipts and remote management are the very features that SMBs demand and are highlighted on Zoho’s product pages.

2) Offline + online convergence — UPI and cards under one roof

India’s payments story has been UPI-led for person-to-person and in many merchant use cases, but cards, NFC, and other rails still exist for high-value transactions and B2B flows. Zoho POS terminals accept EMV cards, UPI QR (static and dynamic) and contactless, reflecting the true-world reality that merchants need multi-rail acceptance under one terminal. This convergence — a hardware to perform UPI, card networks and digital receipts and blast data into accounts — is how merchants will simplify and accelerate digital adoption in retail outside cities.

3) The ecosystem play: messaging, payments, and marketplaces

One strategic subtlety of interest is the plan of Zoho to integrate its messaging platform Arattai with Zoho Pay and the new devices. Bundling communications with payments opens interesting use cases: invoices and payment requests inside chat threads, QR ordering via a message, or marketplace settlements that use both chat and payments for coordination. Integration like this turns a payments device into a node in a larger workflow platform — a trend we’ll see more of as software vendors try to own more of the merchant journey.

4) Domestic capability and regulatory confidence

Zoho’s hardware initiative comes after it has obtained the critical regulatory approvals (payment aggregator / payment gateway registrations) and partnered with Indian infrastructure players. That regulatory runway — along with PCI-DSS on devices — makes a difference for B2B and enterprise merchants needing auditable, secure payment flows. It also fits in a broader “homegrown infrastructure” effort: local players building end-to-end stacks (hardware + software + rails) to compete on price, integration and local compliance.

5) What this means for competition and incumbents

Device market is saturated: payments fintechs, specialist hardware companies and aggregators like Paytm and Razorpay have been present in POS and QR. Zoho has three advantages that could reframe competition:

• Installed base: Zoho has millions of businesses across the globe already running finance and ops software; getting some of them onto its POS is far less expensive than acquiring merchants cold.
• Benefit of integration: Real-time syncing to accounting, inventory and payroll nixes reconciliation pain — a big selling point for merchants.
• Pricing & service: Zoho’s enterprise heritage may enable it to offer device financing, subscription packages and managed services that attract SMBs.

For incumbent players, Zoho raises the bar on product integration; for manufacturers, it is a threat that software firms will own the merchant relationship more and more, rather than just the devices.

6) Merchant economics and data-driven operations

Beyond acceptance, modern POS hardware is all about merchant intelligence: what’s selling, basket analysis, faster settlement options (T+1 or on-demand), inventory triggers and auto-disbursement for marketplaces. Zoho’s context of faster settlements and payouts is the new battleground — not just how you take money but how fast and predictably merchants can use it. Fast, predictable cash flow matters to small business and can be a differentiator.

7) Hands-on issues and what to watch out for

No launch without risk. Some pressing challenges:

• Distribution & service: hardware requires logistics, on-site support and warranties — new responsibilities for a software-first business.
• Device certification and security: periodic PCI, RBI and NPCI conformity audits are necessary. Zoho appears prepared on these frontiers but must continue to invest.
• Merchant switching costs: while integrated stacks reduce friction, merchants are generally on preferred aggregators anyway; Zoho needs clear ROI to cause them to switch.

8) Broader trends reflected in this launch

Zoho’s move summarizes some of India’s broader retail payment macro trends:

• Platform consolidation: vendors are moving away from one-off tools to end-to-end commerce platforms.
• Single experience for end-to-end merchant: acceptance → settlement → accounting → analytics within a single flow.
• Localisation and regulatory compliance: local players are developing compliant, India-native stacks rather than relying solely on foreign vendors.
• Payment as a feature in workflows: payments are becoming embedded inside messaging, CRM and marketplaces — not simply appended as a gateway.

Conclusion –

The arrival of Zoho Payments’ hardware does more than add yet another POS to the market; it represents a strategic turning point that will reshape the future of India retail payments. With software vendors having deep SMB relationships venturing into hardware and payment rails, merchants will have smoother operations, faster settlements and more rewarding data — but will be forced to make trade-offs around vendor lock-in and service quality. For regulators and incumbents, the shift highlights the need to strike a balance among security, competition, and innovation.

If you operate a retail business or consult with SMBs, the takeaway is practical: anticipate more integrated products that minimize reconciliation work and provide greater operating insights. For investors and startups, keep an eye on platforms that can really marry device economics, payments expertise and software integration — those companies will be the ones defining the next decade of commerce in India.