PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Future Gazing: The Evolution of SoftPOS

Christian Damour by Christian Damour
April 28, 2023
in Contactless, Featured Content, Industry Opinions
0
softPOS

Close-up of a woman sitting with his friend in cafe holding credit card and mobile phone for shopping online

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Consumers are used to tapping their card to make payments. The problem is, not all merchants can afford the onboarding and maintenance fees of legacy point of sale (POS) systems. This is a notable obstacle, especially because the pandemic accelerated digitalization, leading to a surge in contactless payments. The volume of these transactions is expected to expand rapidly from 195 billion in 2022 to 408 billion by 2027. Merchants across a host of verticals, including traditional retailers, public transport operators, the hospitality industry and more, must find a reliable, secure, yet affordable solution.

SoftPOS (Software Point of Sale) solutions transform a regular smartphone—also referred to as Commercial Off-The-Shelf (COTS) device—into a contactless payment terminal. This makes it easy and affordable for merchants to accept digital payments, opening up new markets and new customers. As a result, the number of merchants deploying SoftPOS solutions is predicted to grow by nearly 500% between 2022 and 2027. As merchants prepare to embrace the technology, let’s explore what the future of SoftPOS looks like.

Embracing the Opportunity

There are already 5.3 billion mobile phone users worldwide. These devices are now an essential part of daily life. Merchants can easily obtain a COTS device—or expand the use of the one they already own—and transform it into one that is able to accept digital payments. This allows them to bypass some of the costs that come with traditional POS systems.

It isn’t just small and medium-sized merchants that can use SoftPOS to enhance their digital payment networks. SoftPOS can also be used as an accompanying solution. For example, if a standard POS terminal fails, the SoftPOS solution can be used while waiting for a replacement.

Additionally, the flexibility of SoftPOS can greatly enhance the checkout experience. As COTS devices are relatively inexpensive, they can be issued to more staff, giving customers more options for where to pay. In retail, assistants can carry SoftPOS devices with them, allowing customers to pay for products on the shop floor. In hospitality, restaurant staff can use the devices already issued to digitally send orders to the central POS system to take payments. Likewise, within the transport industry, ticket collectors can collect fares on-board, eliminating the need for consumers to queue at ticket machines. By giving more options for where customers can pay, merchants can significantly reduce congestion around traditional checkouts by removing the need for all customers to pass through them.

In the future, SoftPOS could potentially also simplify the online and in-app payment experience. In this use case, it’s planned that the consumer would be able to simply tap their card on the back of their smartphone when they reach the checkout in their online payment journey. This could mean no more entering card details or storing them with retailers.

However, as more use cases for SoftPOS emerge, stakeholders must be mindful of some of the risks that still must be addressed.

Implications of Certification for SoftPOS

SoftPOS environments can make it difficult to secure payments as they frequently lack the hardware security features found in conventional POS devices. And with a new PCI SSC certification released in Nov. 2022, compliance is more important than ever.

Mobile payments on COTS (MPoC) is a new mobile standard relying on existing PCI standards to support the future evolution of mobile payments. This update means that COTS terminals will be able to support both PIN and PINless transactions, offline transactions, and manual card data entry. It also helps SoftPOS devices accept both contactless NFC transactions and transactions that utilize an external chip or magnetic stripe card reader.

This will also allow the components of SoftPOS solutions to be tested individually, before being tested together as the full solution. By standardizing approaches to security evaluation, this is making the certification process clearer and easier to manage, helping solution providers reduce both development costs and time to market while prioritizing security.

Looking Ahead

The number of merchants deploying SoftPOS solutions is expected to skyrocket, and use cases are expected to continue to develop as more major global tech companies prepare to enter the SoftPOS industry. To meet demand, compliance and certification should continue to be at the center of the conversation around this innovative approach to digital payments. Compliance with functional and security certification requirements is mandated by both international and domestic payment schemes. Meeting these needs is key to success, however, if these are accounted for in the initial design and development phase, manufacturers can ensure that they are not impacting time to market.

Meanwhile, cloud-based kernels are being developed specifically to meet the needs of the SoftPOS ecosystem. These can simplify payment device management, as the ability to make automatic updates removes the need to push new kernels to each device individually after every scheme update.

Tags: ContactlessCOTSMerchantsSoftPOStap to pay
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    cashless payments

    Exploring The Future of Cashless Payments

    June 8, 2023
    debit cards, Gen Z

    Debit Builds Consumer Loyalty Among Gen Z and Other Top Demographics

    June 7, 2023
    check fraud

    Check Fraud: The Threat is Real

    June 6, 2023
    smart banking

    Smart(er) Banking Requires More Than Just Tech

    June 5, 2023
    Google Wallet Expands Features

    Google Wallet Continues to Bet on Digital with Expanded Features

    June 2, 2023
    digital value

    How Embracing Digital Value Can Help Solve the B2C Payments Conundrum

    June 1, 2023
    instant payments, real-time payments, RTP

    Banks Developing Instant Payments Products in the U.S. Should Focus on Billers to Generate New Revenue Streams  

    May 31, 2023
    Digital Wallet Use Delivers on Convenience and Security

    Digital Wallet Use Delivers on Convenience and Security

    May 30, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result