The mobile point-of-sale industry, estimated at $95.7 billion in 2015, has fallen short of meeting investors expectations regarding market penetration and revenue since its evolution, according to a new report from Timetric.

Most mPOS providers, including the biggest global player, Square, have yet to break even. As a result, the market is undergoing consolidation, with SumUp and Payleven merging earlier this year and Powa Technologies going bankrupt. Powa also turned out to be a disappointment for London's fintech community, potentially making fundraising more difficult for local startups, according to a press release about the report.

"This can mainly be attributed to the early launch of mPOS or the lack of a supporting ecosystem in terms of card penetration, card use and NFC deployment. The mPOS market is already seen as overcrowded, and it is becoming increasingly commoditized," Timetric's analyst Pooja Jha said in a statement.

Despite these issues, Timetric said the mPOS market still offers significant opportunity to expand electronic payment acceptance to small merchants, and also to enhance established merchants' payment systems. The market is expected to benefit from the EMV migration as this will likely initiate a new hardware cycle through which mPOS could gain more traction. The U.S. accounts for the majority of both global mPOS transaction value and number of active devices. As the EMV rollout in the U.S. has started, mPOS adoption is expected to rise further, according ot the report.

"MPOS offers multiple advantages over conventional POS in terms of both cost and functionality, and it could be a viable alternative for many merchants upgrading to EMV," Jha said. "The mPOS market is expected to move towards higher volume and lower margins, that will eventually erode, despite value-added services providing a potential source of additional revenue."