By Brad Hyett, CEO of phos
The pandemic accelerated innovation in the way we pay for products and services. As a result, we’ve seen payment technology evolve years before we expected it to. The growing demand for alternative payment methods and greater flexibility at the checkout is changing the payment landscape for both shoppers and sellers.
One of the technologies to watch out for is Software Point of Sale or ‘SoftPoS’. This new payments software is rapidly growing in popularity amongst SMEs and is set to address the issues behind the digitalisation of payments for small businesses.
SoftPoS might still be an emerging technology but, with the likes of Apple already moving into the space, it’s important we understand what it is and what benefits it brings for business owners worldwide.
What is SoftPoS?
SoftPoS allows merchants to accept card payments directly on their phones or mobile devices without the need for any additional hardware. This enables businesses to avoid the high costs of having to pay for expensive Point of Sale (POS) terminals i.e. card readers.
The ability to accept payments on mobile devices has come a long way and many SMEs can now run their business from their smartphone. Using near-field communication (NFC) technology, card payments can be accepted on any Android smartphone or tablet – devices readily available to the SME market.
With SoftPoS being based on Android OS, the integration of additional business applications serves to enhance the functionality of how payments are made.
With 5.32 billion unique mobile phone users in the world today, according to the latest data from GSMA Intelligence, mobiles have become an integral part of daily life. The fact a large majority of people have an Android or iPhone device has democratised access to technology, meaning even smaller retailers have everything they need to accept contactless payments in their pocket.
How does SoftPoS benefit SMEs?
SoftPoS offers a multitude of benefits for merchants and customers alike. The ability to transform commonly used devices into payment acceptance devices is revolutionary. For example, scalability is easy and requires little to no training for staff since almost everyone has access to a mobile phone.
As many sectors continue to recover from the impacts of the pandemic, not having to pay for additional hardware saves merchants money that can be put into other vital areas of their business.
Likewise, giving consumers more ways to pay for products and services will ensure SMEs don’t miss out on opportunities to close more sales, whilst creating a frictionless experience for their customers.
In short, SoftPoS enables businesses to reach more customers than ever before and keep them coming back with the ability to pay in a way that suits them.
Forward-thinking businesses have recognised this potential and are already leveraging the technology today. For instance, card giant Mastercard has enabled millions of underserved businesses across Europe to accept cashless payments using a SoftPoS solution.
According to the Global Findex 2021 database, two-thirds of adults worldwide now make or receive a digital payment, with the share in developing economies growing from 35% in 2014 to 57% in 2021.
Many countries shifted digital transformation projects up their priority list in response to the pandemic. The digital revolution of cashless alternatives has created new economic opportunities worldwide whilst bringing about greater financial inclusivity.
Emerging markets within the Middle East and North Africa (MENA) region have highlighted the growth of mobile-first propositions for businesses. With merchants in these developing markets typically relying on cash transactions, better access to mobile money services has served as a catalyst for the adoption of SoftPoS.
This momentum shows no signs of slowing down as technology giant Apple recently announced it would be enabling contactless payments on iPhone for the first time earlier this year. Its move into the space validates the market potential of SoftPoS worldwide and will increase adoption of the technology as contactless adoption surges in both mass and developing markets.
Historically, SoftPoS was not supported by iOS operating systems, but the recent turn of events highlights the growing demand and appetite for contactless payments on mobile.
The SoftPoS opportunity
We’re only just beginning to see the potential of SoftPoS and its capabilities globally. It’s been a couple of years since the pandemic first encouraged a surge in the adoption of mobile payments, yet consumers are continuing to favour contactless transactions in their everyday lives.
The demand for digital payments remains unchanged and the SoftPoS market will only grow as time goes on. What’s more, SMEs can get in on the ground floor of this new technology, harnessing it to meet these changing consumer expectations whilst gaining an edge over the competition.