• Brad Hyett, CEO at phos


• 20.02.2023 11:30 am
#payments

In recent years, customers have embraced the ease of use and convenience that contactless payments can offer them. There’s been, a surge in the use of digital wallets both during and post-pandemic which has greatly increased demand for contactless technology. As a result, Software Point of Sale or “SoftPoS” is set to take the business world by storm this year, with up to 6 million merchants already leveraging the technology over the last year alone. 

SoftPoS, sometimes known as ‘Tap to Pay’ technology, enables vendors to transform phones and other mobile devices into contactless payment points. This gives smaller businesses, which don’t have the deep pockets of bigger retailers, the opportunity to save costs on traditional POS terminals i.e. expensive chip and pin machines. 

SoftPoS adoption is expected to reach new heights this year following Apple’s decision to allow third-party providers to deploy their technology on iPhones in 2022. It’s predicted that by 2027, we’ll see five times the number of merchants, reaching up to 34.5 million according to Juniper Research. As we see more payment giants championing the need for contactless acceptance in the coming year, here’s what we can expect to see for SoftPoS in 2023.

iPhone integration and its role in SoftPoS adoption

Apple’s move to integrate the technology with iPhone devices will expand SoftPoS’ usability across mobile operating systems - significantly boosting the size of the addressable market for vendors. For the first time, Apple users will be able to offer Tap-to-Pay solutions which have traditionally been limited to Android devices only. 

This will ultimately bring greater awareness and adoption of SoftPoS as we see increased familiarity with Tap-to-Pay solutions among businesses and consumers alike - as they’re no longer bound by the constraints of the type of phone they use.

While the SoftPoS on iPhone rollout currently only applies to the US market, it’s fair to assume this will expand internationally at some point - aiding the normalisation of ‘Tap to Pay’ solutions en masse in the months and years ahead.

The new age of solopreneurship

The events of the last year will also continue to have a ripple effect over the next 12 months. For example, we’ve seen the tech industry undergo mass layoffs due to a challenging economic environment and rising global inflation.

With large numbers of highly skilled talent out of work, the phenomenon of solo entrepreneurship is likely to see an uplift - as it did during the pandemic - over the next 12 months. Born in a digital-native environment, individuals from this released workforce can now set up their own businesses and run them on mobile devices, as opposed to legacy infrastructures.

This could prove another sizable opportunity for SoftPoS vendors in the coming year, as we predict to see more small businesses sprout as a result of ongoing redundancies.

SoftPoS orchestration is becoming increasingly more important

As the market rapidly develops, so too does the choice and ease of onboarding. Financial institutions and retail technology providers can now use a SoftPoS orchestrator to help them deploy Tap-to-Pay solutions quickly and easily for their merchant customers, instead of having to create their own mobile solutions. This saves them time and money - both crucial resources for any business and especially in a challenging economy.

Partnering with a SoftPoS orchestrator is a cost-effective way of providing mobile payment solutions without having to worry about waiting on new software and security updates. With an orchestrator, this is done automatically - making this a much lighter lift with no requirement for technological know-how.  

As SoftPoS orchestrators are acquirer agnostic, this means they can help businesses provide a SoftPoS solution to their own retail customers, regardless of the existing acquirer that they’re already using. 

An additional benefit here is that a wider pool of merchants are able to benefit from the technology - growing the overall size of the SoftPoS market. Orchestrators, then, have the ability to drive wider adoption of the technology globally, reaching a bigger audience of end users and advancing the mobile payments industry in emerging markets across the world.

The endless possibilities of SoftPoS

The SoftPoS market has expanded rapidly in recent years, as digital and contactless payments have become increasingly popular among merchants and consumers alike. Following Apple’s recent announcement, we can expect to see the technology enter the mainstream in 2o23 and propel the landscape into the future - with third-party providers no longer bound to Android devices alone. 

Furthermore, the rise of mobile-first businesses provides further opportunity for the mass adoption of softpos, Meanwhile financial institutions and legacy technology providers have the opportunity to leverage ‘Tap to Pay’ software to stay ahead of the competition and keep up with ever evolving customer needs.