The Past, Present and Future of SoftPoS

  • Brad Hyett, CEO at phos

  • 24.03.2023 12:45 pm
  • #payments

SoftPoS, also known as "Tap to Pay" technology, has revolutionised the way businesses accept payments. Small businesses have traditionally relied on expensive hardware, such as chip and pin machines for transactions. However, SoftPoS enables businesses to process payments through the software on a mobile device, such as a smartphone or tablet, eliminating the need for physical hardware and increasing sales opportunities.

Larger businesses can also benefit from SoftPoS by increasing the number of acceptance points, which reduces queues and improves efficiency. SoftPoS is one of the most promising technological trends related to payments. In fact, Juniper Research predicts adoption to rise from 195 billion in 2022 to 408 billion by 2027, driven by the increasing use of contactless payments.

With the prominent rise of SoftPoS in recent years, the question remains, how did this all start, and what does the future hold for merchants and their customers?

SoftPoS in its Early Years

First launched in 2012, SoftPoS found humble success as an emerging technology before regulatory standards and controls were established in 2018. In its early days, it lacked certain features such as the ability to read pins and had limits on how much could be spent in any given transaction.

However, the introduction of SPoC and CPoC certifications by the PCI Security Council - which set out standards for payments on mobile devices - has seen SoftPoS uptake surge among merchants in recent years. It’s also improved functionality and led to a proliferation in use cases for the technology. 

The demand for contactless payment solutions has skyrocketed as a result of this and COVID-19's acceleration of digital innovation.

The Current State of SoftPoS 

Post-pandemic, this momentum has shown no sign of abating. The past year has seen SoftPoS’ popularity reach new heights with growing interest from Big Tech and established payment players. Tech giant Apple announced it would enable third-party SoftPoS providers to deploy their solutions on iPhone last February, marking a defining moment in its development journey.  

As SoftPoS was only available to deploy on Android up until 2022, we expect to see rapid uptake of SoftPoS on iPhone devices in the coming months. 

While SoftPoS solutions have traditionally been the domain of smaller businesses, as a relatively cheap and secure means of contactless payment acceptance, their growing ubiquity is catching the eye of bigger players too. The advantages of SoftPoS technology, for instance, are now acknowledged by major card schemes like VISA and Mastercard as a way to increase payment acceptance points worldwide.

Future Developments in SoftPoS

As we look to the future of technology, we need to consider the rise of SoftPoS orchestrators. That is, SoftPoS providers which choose to remain bank agnostic - in order to help legacy technology providers and financial institutions bring Tap to Pay solutions to market quickly and efficiently. 

This offers a significant competitive advantage that can assist companies of all sizes in growing and reaching more end users around the world.

Partnering with a SoftPoS orchestrator means that financial providers don’t have to create their own in-house payment solutions from scratch. This saves firms time, money and resources while getting to the same end goal faster. 

Businesses can instead spend their time focusing on other areas of product and customer service development as they can rely on the orchestrator's domain knowledge and expertise when it comes to deploying a SoftPoS solution. 

As the technology is based on a mobile device its use cases are plentiful for customer businesses. From taking orders and payments in a restaurant via a single app to the creation of ‘endless aisles’ in enterprise retail environments.  

With the number of SoftPoS orchestrators increasing, we expect to see continued interest from financial resellers, and direct from merchants alike, in the months ahead. 

Moving Ahead…

SoftPoS has overcome various regulatory obstacles and undergone significant changes in the past few years. The recent surge in technology and increased adoption of contactless and mobile payments has accelerated its adoption.

No matter the size of the business, SoftPoS has been praised for its ease of use and capacity to enhance the customer experience. The level of security that can be offered by this technology can surpass that of traditional payment terminals.

Further down the line, we can expect to see greater market consolidation and a rise in use cases as more tech giants enter the SoftPoS arena. The increased interest from financial technology providers and large merchants is clear proof point that SoftPos will not only continue to gain momentum but will also expand its global presence further and grow stronger in years to come.

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