WhiteSight

2023 Roundup: SoftPOS Takes the Stage for a Swipe-Free Serenade

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Tap to Pay and SoftPOS: Saving Lunch Breaks in 2023!

In a world where our smartphones know our coffee orders before we do, it’s high time our payments caught up with the speed of our emoji replies. Imagine having to wait at the checkout, wallet MIA, and the cashier’s giving you the look that says, “Move faster; my lunch break is slipping away.”

Fear not, for the fintech, banking, and commerce wizards have bestowed upon us the ‘Tap to Pay’ feature. The post-pandemic era saw contactless payments soar from a convenient option to the primary method of business. In response to the surging demand for more contactless solutions, a trend emerged in 2023 where key players across various industries introduced features like tap-to-pay and SoftPoS for consumers and merchants. Among the diverse approaches, Android and Apple devices stepped forward to make the payment acceptance process as easy as ordering pizza on a lazy Sunday.

Let’s quickly bring you up to date with some of the tech lingo:

Tap to Pay: Imagine you’re at a coffee shop, and instead of swiping your card or fumbling with cash, you just tap your smartphone or smartwatch on the card machine. That’s Tap to Pay. It’s like your phone or wearable turns into a magic wand that makes payments super quick and easy. This works thanks to NFC (Near Field Communication) technology, which lets devices communicate when they’re close together.

SoftPOS: Now, think about the other side of the counter. The barista doesn’t have a traditional bulky card machine; instead, they have an app on their phone or tablet that turns their device into a card reader. That’s SoftPOS (Software Point Of Sale). Sometimes it is also called tap-to-phone or tap-on-phone. It’s like turning their regular device into a mini cash register that can accept your tap-to-pay magic. 

Adding to the confusion, Apple has named its merchant payment acceptance feature on Apple devices ‘Tap to Pay on iPhone’. But what they mean is that by using  ‘Tap to Pay on iPhone’ merchants can start accepting payments in-store without needing any other hardware device. 

Tap to Pay and SoftPOS are like two sides of the same coin. While Tap to Pay transforms consumers’ devices (smartphones, smartwatches, tablets) into digital wallets, SoftPOS turns a merchant’s device (primarily smartphones) into a terminal to accept those tap payments. Together, they make transactions super smooth and modern, totally changing the game for small businesses and customers alike!

In this blog, we’re focusing on how merchants can now accept contactless payments directly through their smartphones, thanks to the emergence of SoftPOS technologies in 2023. 

Android and iOS Steer the Future of Payments

While notable POS operating systems, including Windows, Linux, Android, and iOS, have played pivotal roles in facilitating retail transactions, the landscape is witnessing a transformative shift with the surging popularity of tap-to-pay solutions. In recent times, Android and iOS operating systems have emerged as the most sought-after platforms to power SoftPOS applications. The intuitive interfaces, widespread adoption of smartphones running these operating systems, and seamless integration capabilities have positioned Android and iOS as frontrunners in catering to the escalating demand for contactless payment solutions. Android’s interoperability benefits and Apple’s state-of-the-art security have positioned them as the preferred software platforms for softPOS solutions.

Juniper Research predicts an impressive 475% growth in SoftPOS usage by 2027, with over 34.5 million merchants, a substantial increase from 6 million in 2022. 

This growth is fuelled by various benefits including:

  • Cost-Effectiveness: Instead of investing in specialised hardware, businesses can leverage their NFC-enabled smartphones or devices, significantly reducing upfront costs. 
  • Reduced Clutter and Flexibility: SoftPOS systems offer businesses the flexibility to break free from fixed checkout counters, transforming smartphones and tablets into POS terminals for transactions anywhere within the store. This not only reduces clutter and space requirements needed for bulky hardware components but also results in shorter queues and faster customer turnover.
  • Integration and Data Insights: SoftPOS seamlessly integrates with current accounting, inventory, CRM, and e-commerce software, eradicating manual entry, and minimising errors. Transaction data offers insights into customer behaviour, purchases, and inventory turnover, helping businesses make informed decisions.
  • Enhanced Security and Compliance: SoftPOS ensures enhanced security and compliance by employing robust EMV standards, featuring end-to-end encryption, tokenization, and biometric authentication. The system adheres to PA DSS certification, satisfying general PCI compliance requirements for POS systems, with no additional obligations for merchants using smartphones as POS devices.
  • Reconciliation: Robust processes enable reliable reconciliation and settlement services for efficient dispute management and timely compliance.

Among the incumbent banks, Natwest and J.P. Morgan brought Tap to Pay to Android and iPhone, respectively. Fintech players PayPal, Square, and Stripe entered the tap-to-pay arena, introducing the feature on Android platforms. Wix partnered with Stripe to introduce Tap to Pay on Android for US-based merchants. 

 

Get ready to bid farewell to the days of scrambling for loose change as the ‘tap to pay’ phenomenon has turned every transaction into a finger-snapping, hassle-free affair. Wallets are taking a backseat, and our trusty phones are leading the payment parade. So, here’s to a future where every purchase is just a tap away—2023, you’ve made payment magic happen, one tap at a time!

Authors

Senior Research Associate

Risav is a senior research associate at WhiteSight, where he spends his days navigating the complex fintech landscape and poring over market trends. When he's not decoding the world of fintech, you'll find this sports fanatic decoding the perfect curveball on the football field.

Senior Branding Associate

Kshitija is a senior branding associate at WhiteSight, crafting branding strategies and fintech content. When she's not conjuring up new ideas for the company, you can find her dabbling in new hobbies and documenting her experiences through writing and short films.

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