Will SoftPOS Set the Stage for the Next Phase in the Digital Payments Revolution?

How about the convenience of using your mobile phone as a digital payment terminal? This marks the next phase of digital payments in the form of SoftPOS. Short for Software Point-of-Sale, SoftPOS effectively enables retail merchants to run their business from any location without investing in expensive payment hardware. With smartphones equipped with near-field communication (NFC), they can accept online payments from any contactless credit card or digital wallet.

Why is SoftPOS a major “game-changer” for small-time merchants? It offers them the flexibility of receiving contactless payments from customers without the restriction of any fixed or wired payment device. This is why 71% of retail merchants believe SoftPOS will replace “traditional” POS terminals shortly. Similarly, Juniper Research predicts that by 2027, the number of merchants using SoftPOS will jump to 34.5 million from 6 million in 2022.

Though at a nascent stage, SoftPOS is regarded as the next phase of digital payments. Let’s see why.

What is SoftPOS?

Also referred to as “Tap on Phone” or “Tap on Mobile,” SoftPOS is essentially an easy-to-download mobile app that converts the mobile phone into a POS device. How is it revolutionary? It enables merchants to eliminate any additional hardware such as a credit card machine or any physical POS device.

Besides receiving payments, SoftPOS also allows merchants to:

How does SoftPOS work? As a software application, SoftPOS leverages the capability of wireless data transfer (or NFC). Here’s its 2-step process:

1. Retail merchants need to first download the SoftPOS application on their mobile or smartphone.
2. Customers need to tap their contactless payment cards on the merchant’s SoftPOS app to initiate the payment.

What’s driving this innovation? By this year, there will be an estimated 1.6 billion NFC-enabled devices. As more retailers go mobile and remote, they cannot grow their business through “fixed” POS devices. SoftPOS offers them the right alternative to accept payments from any location.

Benefits of SoftPOS

At the foremost, SoftPOS offers a cost-effective mode of payment for millions of small-to-medium businesses (SMBs) around the globe. Additionally, SoftPOS addresses some of the common pain points for retail merchants with traditional payment systems. Some of these pain points include:

On the other hand, SoftPOS offers a host of benefits for merchants including:

• Ease of use: As a mobile app, SoftPOS is easy to understand and install for business owners. All that they need to do is to download and install the application and operate it immediately as a point-of-sale device.
• No hardware costs: Besides their smartphone, retail merchants do not need any additional hardware devices like card readers or POS terminals. Additionally, they don’t incur any maintenance or Internet connection costs. Retail merchants operating in remote areas (or areas with poor Internet connectivity) can benefit from this functionality.
• Financial inclusion: The SoftPOS system enables the financial inclusion of small-time merchants in the payment landscape. For example, food truck operators in remote locations can use this system to streamline their payment process. It also enables them to be competitive and resourceful in the fast-evolving business landscape.
• Secure transactions: Designed for contactless payments, SoftPOS provides the same level of security as any traditional POS device. For instance, sensitive customer information is protected through end-to-end data encryption and tokenization. Biometric-based customer authentication methods like fingerprint recognition also enhance SoftPOS security.

Who can use SoftPOS?

In effect, the SoftPOS technology levels the “playing field” for SMBs who do not have the infrastructure to accept contactless payments. This includes a host of SMBs like ride-sharing drivers, food truck operators, and “mom-and-shop” retail shops. In a competitive market, brick-and-mortar stores can counter the rising popularity of eCommerce with this innovative payment system.

Apart from SMBs, larger enterprises and retailers can also leverage the benefits of SoftPOS to improve their customer experience (CX). For instance, they can initiate a contactless payment even when their Internet connectivity is disrupted temporarily – thus ensuring that their customers are not inconvenienced in any scenario.

Similarly, large retailers have to deal with long customer queues (during discount sales and holiday seasons) in their brick-and-mortar stores. In such circumstances, SoftPOS enables them to cut down customer wait times and speed up their checkout & payment process.

Additionally, restaurants can use SoftPOS to enable:

Conclusion

With its mobile-based payment system, SoftPOS is all set to transform the next phase of digital payments. Currently supported on Android phones, SoftPOS is expected to make its way into Apple iOS devices shortly. As smartphone penetration continues to increase, micro and small-time merchants can exploit this technology to increase their business reach.

At Verinite, we believe in the power of innovative digital payment solutions and how it is transforming the global retail business. Our technology solutions focus on the domain of credit cards, lending, and payments. We work across the financial industry including banking, fintech, and third-party payment processors.

If you want to know more about SoftPOS, get in touch with us now.