Post Office Protocol is a commonly used messaging protocol. The most widely used implementation of this protocol is POP3.
POP3 is a retrieval protocol used to retrieve mail messages from a POP server. E-mail messages received by the POP server are delivered to a server mailbox. Messages reside there until an individual with a POP mail client retrieves them. The POP3 connector is one of those types of clients.

Because POP3 is a messaging protocol, it's designed for retrieval only, and it must work in conjunction with a protocol capable of sending the messages, such as SMTP. The SMTP is a standard protocol for mail transfer over the Internet. It defines how a message is formatted for delivery, and it also provides the delivery mechanism over connection-based protocols such as TCP/IP.

The Exchange server uses SMTP to send and receive mail. In addition, POP clients use the SMTP to send messages to SMTP hosts to route and deliver mail over the Internet.

So, what are the differences between POP and SMTP? POP3 protocol is only capable of retrieving mail from a POP3 host, and is therefore dependent upon SMTP protocols to deliver outbound messages. Therefore, if you had an NDR message generated when you were downloading, say, POP3 mail using the connector, the failure would be at the point where the message was trying to connect to the SMTP virtual server in Exchange.
The SMTP virtual server is responsible for, and will generate, the NDR.