As digital payments continue to rise, new customer experiences are also emerging. The contactless payment experience seen online is rapidly becoming prevalent in the physical retail world. SoftPOS, a technology leading the way in the realm of physical retail payments, is poised to become a significant player. According to Juniper Research, global SoftPOS transaction values are projected to grow at a compound annual growth rate (CAGR) of at least 53% over the next five years, with the Mobile Point of Sale (mPOS) market, including SoftPOS, expected to reach $15 billion in Europe by 2027.
What is SoftPOS?
SoftPOS technology enables businesses to accept payments using a standard iOS or Android device. For the first time, a company can accept face-to-face card payments without needing to purchase any hardware (POS) related to payments. Currently, SoftPOS payments can only be made with contactless cards, Apple Pay, or Google Pay. Markets with high contactless penetration or mobile wallets are expected to achieve the most success.
Unlike previous mobile payment solutions (often referred to as mPOS), SoftPOS accepts payments on an “off-the-shelf” device. A standard phone or tablet with NFC capability can now receive card payments. In other words, businesses can conduct payment transactions without needing any physical POS hardware.
Key Benefits of SoftPOS for Businesses, Consumers, and Processors:
- Hardware Independence: Any NFC-capable device can accept payments, providing flexibility for businesses of all sizes. This device flexibility allows part-time entrepreneurs to operate comfortably without making a significant upfront investment.
- New Distribution Channels: Processors and other vendors can distribute their products through mobile app stores. There is no need to sell POS devices to connect to payment services. App store software distribution means more payment acceptance points that can scale according to demand.
- Speed to Go Live: With software-based payments, setting up a commercial business can be as seamless and paperless as possible. Establishing a business account can be completed in days or even less, as registration is entirely digital. Electronic KYC (Know Your Customer) allows businesses to start selling faster than ever before.
Despite being a relatively new technology, SoftPOS has achieved significant growth in 2023. It is expected to become mainstream for accepting payments and to become much more widespread in the coming years. However, as with any new technology, SoftPOS will likely face growing pains.