What's in this post?
SoftPOS, software-based point of sale, allows SMB merchants to accept contactless payments directly on a mobile device. It eliminates the cost of purchasing mobile payment terminals. It’s also easier to deploy, and merchants can more easily equip their employees to provide service anywhere customers want to pay. This disruptive technology represents a lucrative opportunity for ISVs and VARs who offer SoftPOS solutions to their SMB merchants who will recognize its advantages.
SoftPOS is getting more attention from small and medium-sized businesses, with good reason. Merchants are continually on the search for solutions that help them meet consumer demands, and they’re waking up to the role payments can play in improving customer experiences. Accepting consumers’ preferred payment method is fundamental to ensuring they don’t abandon their carts or complete their in-store purchases. For example, according to research by PYMNTS, as much as 70 percent of online shoppers say it influences where they shop. The research also shows that millennials and Gen Z consumers are five times more likely to abandon purchases than baby boomers. In-store, consumers are increasingly demanding contactless payments. PYMNTS reports Visa data that shows 80 percent of all in-person transactions around the world are now tap-to-pay.
So, ISVs and VARs face the challenge of helping SMB merchants accept the payment methods that consumers want to use while providing practical, budget-friendly technology. SoftPOS is a viable solution.
What Is SoftPOS?
Software-based point of sale (SoftPOS) allows merchants to accept contactless payments directly on a mobile device, like a tablet, smartphone, or handheld computer. It eliminates the need to invest in new devices to accept contactless payments, which is particularly helpful to cash-strapped SMBs.
SoftPOS works by using the mobile device’s near-field communication (NFC) to capture data from the customer’s contactless card or mobile wallet. The SoftPOS solution then initiates the transaction and sends an authorization or decline back to the merchant.
If you’ve looked into SoftPOS in the past, you need to look again. Today’s SoftPOS solutions are based on the PCI Mobile Payments on COTS (MPoC) standard, published in 2022. It builds on the previous SPoC and CPoC standards but makes tap-to-pay payments easier for developers to create and maintain. It also solves the problem of how to accept PIN entry securely on the same device that captures payment data. To get started, all merchants need to do is download the software and apply to accept payments. Once approved, they can begin accepting payments.
How Does SoftPOS Benefit SMB Retailers?
SoftPOS lowers the barrier to contactless payments for SMB merchants in several ways. It helps to level the playing field with larger competitors who enable consumers to use their mobile wallets and contactless payment cards. But the benefits extend far beyond meeting consumer expectations by offering these advantages:
- Lower Hardware Costs
Merchants who can use a tablet, smartphone, or handheld computer to accept contactless payments don’t have to purchase NFC-enabled mobile devices. Furthermore, they don’t need to buy and maintain peripherals like chargers, docks, and enclosures. In addition, PCI compliance is easier, since merchants using SoftPOS don’t have to track and update payment terminals.
- Decreased Deployment Friction
When SMBs don’t have to wait for payment devices from an OEM or key injection, they can begin accepting payments faster. The SoftPOS provider also handles compliance, updates, and new features, decreasing the burden on the merchant and their solutions providers.
- Support for Remote and Seasonal Sales Points
Merchants can accept contactless payments anywhere with any device that can communicate on a local network or 4G/5G connection. This allows SMB merchants to offer consumers the convenience of contactless payments outside and off-site. SoftPOS can enhance experiences at community events, farmers’ markets, lot sales, and food trucks, increasing customer satisfaction and even capturing more revenue from customers who aren’t carrying cash. - Easier Way to Achieve Staff Mobility
SMB merchants can use any mobile device that can run the SoftPOS application to line-bust or check out a customer in the aisles. Servers in restaurants can take payments at the table or even outside. Retailers can easily create new check-out lanes during the holidays or at other peak times. And they can accomplish it all without buying mobile payment terminals or devices. - A Complement for the Existing Payment Environment
SoftPOS enables SMB merchants to accept contactless payments, so it is a good complement to countertop terminals for contact payments. It’s also a reliable backup if a network disruption occurs. Merchants can continue to accept contactless payments with SoftPOS until the network connection is restored.
What’s the SoftPOS Outlook?
SoftPOS is growing, but the industry is far from wide-scale adoption is just beginning. Grand View Research predicts the SoftPOS market, estimated at $365 million in 2024, will grow at a 23.1 percent CAGR to reach $1.243 billion by 2030. Grand View says the lion’s share of that market is in North America.
This technology is available for VARs and ISVs to offer to SMB merchants now. Growth predictions driven by benefits, including lower costs, easier deployment, staff mobility, and a practical complement to traditional payment terminals. Expand your portfolio to equip SMB merchants with this game-changing technology now through a partnership with Datacap Systems. Contact us to learn more about the opportunity SoftPOS can create for your business.
