# Does SoftPOS signal the end of payment hardware as we know it? Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-07-26 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: Revolutionising Payments: The Rise of SoftPOS Technology Meta Description: Learn how SoftPOS technology is transforming the payments space and providing merchants with new opportunities for growth and customer satisfaction. URL: https://financedigest.com/does-softpos-signal-the-end-of-payment-hardware-as-we-know-ithtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/soft-payments-1736815538316-compressed.jpg) ![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/simon-buchwaldt-nissen-450x473-1736815538468-compressed.jpg) _By_ **_Simon Buchwaldt-Nissen,_** _Head of Strategy & Transformation, Product & Engineering –_ [_Nets_](https://www.nets.eu/) _Merchant Services_ There’s no doubt that SoftPOS technology is disrupting the payments space. While change won’t happen overnight, we can be sure it’s certainly coming. It can provide merchants of all sizes with the ability to accept contactless payments without a traditional card reader, solving multiple challenges and creating new opportunities for growth. Contactless technology is used in [80% of in-store card payments today](https://www.nets.eu/Media-and-press/news/Pages/8-out-of-10-card-payments-now-contactless-in-the-Nordics.aspx) and Juniper Research predicts that the number of smartphones used for contactless SoftPOS payments will grow from 3.2 million in 2021 to nearly 24 million by 2026. This practice of turning a smart device into a payment product is fuelled by the app economy, and as [big brands](https://www.financedigest.com/big-brands-set-to-miss-plastic-sustainability-targets.html "Big brands set to miss plastic sustainability targets") introduce, expand and support this technology on their smartphones, we can expect to see it proliferate further. So, what is so attractive about turning a smartphone into a [payment acceptance](https://www.financedigest.com/why-ev-charging-stations-need-to-accept-open-cashless-payments.html "Why EV Charging Stations Need to Accept Open Cashless Payments ") device, and what are the risks? Let’s start by looking at the [customer experience](https://www.financedigest.com/improving-customer-experience-and-profits-with-embedded-payments.html "Improving customer experience and profits with embedded payments"). **Browse everywhere, pay anywhere** Customers can benefit from a streamlined shopping [experience with SoftPOS payments](https://www.financedigest.com/how-netflix-justeat-and-uber-raised-the-bar-for-the-payments-experience.html "How Netflix, JustEat and Uber raised the bar for the payments experience"). Instead of having to find available [cash registers](https://www.financedigest.com/disruptive-thought-process-to-keep-the-cash-registers-ringing-for-neurostimulation-devices-market.html "Disruptive Thought-Process To Keep The Cash Registers Ringing For Neurostimulation Devices Market") and queue at specific “Points of Sale” (POS), SoftPOS has the potential to change the store setup entirely. These new [experiences will be based around consumer](https://www.financedigest.com/what-vrps-should-do-to-improve-the-experiences-of-open-banking-consumers.html "What VRPs should do to improve the experiences of Open Banking consumers") ‘Points of Interaction’, unbound by tethered payment points. Merchants can take a payment anywhere in the store, removing customer friction and presenting significant potential to boost transaction volumes. Accepting consumer payments anywhere, via an inexpensive mobile device, presents a valuable chance for [retail assistants to upsell to customers](https://www.financedigest.com/cracking-the-code-of-customers-future-value-in-retail.html "Cracking the code of customers’ future value in retail"). By freeing staff from the traditional POS, they can instead interact more with customers throughout the store, providing a more personal and bespoke experience and [boosting conversion rates](https://www.financedigest.com/workspace-says-utilisation-rates-boosted-by-post-lockdown-return-to-office.html "Workspace says utilisation rates boosted by post-lockdown return to office"). The customer can then [pay for their products](https://www.financedigest.com/four-innovative-ways-to-pay-for-products-online.html "Four Innovative Ways to Pay for Products Online") on the shop assistant’s mobile device, reducing churn that can occur with checkout queues. **Ever-expanding use cases for SoftPOS** The flexibility of [smart devices](https://www.financedigest.com/smart-home-devices-market-is-expected-to-grow-at-a-healthy-cagr-of-over-18-during-the-study-forecast-period-2021-2031.html "Smart Home Devices Market is expected to grow at a healthy CAGR of over 18% during the study forecast period 2021-2031") also allows for other functionalities to be embedded. In restaurants, SoftPOS devices not only enable payments to be taken more quickly by the waiting staff (instead of waiting for [card payment terminals](https://www.financedigest.com/visa-has-terminated-global-debit-card-agreements-with-ftx.html "Visa has terminated global debit card agreements with FTX") to be freed up from other paying guests), but the technology can also integrate with other applications such as booking calendars, inventory and staff management, food and drink orders, and more. This integrated approach enables more [efficient management](https://www.financedigest.com/iforces-route-genie-to-drive-efficient-carrier-management-for-freestylextreme.html "IFORCE’S ROUTE GENIE TO DRIVE EFFICIENT CARRIER MANAGEMENT FOR FREESTYLEXTREME") and facilitates an enhanced experience for the customer. The technology could also be a game-changer for small and micro-businesses. Turning a device that most people already carry with them everywhere into a payment acceptance terminal means, for example, that hairdressers on home visits can accept card payments easily. Healthcare practitioners, taxi drivers, market traders, electricians, plumbers and thousands more [trades stand to benefit](https://www.financedigest.com/inflation-trade-nestle-reaps-benefits-from-higher-prices.html "Inflation trade? Nestle reaps benefits from higher prices") from access to low-cost card payment acceptance. For merchants of all sizes, the cost of SoftPOS [technology can be much lower than with dedicated payment](https://www.financedigest.com/from-the-experts-5-payment-technology-trends-to-look-out-for-in-2016.html "FROM THE EXPERTS: 5 PAYMENT TECHNOLOGY TRENDS TO LOOK OUT FOR IN 2016") hardware. A consumer “off the shelf” device is considerably cheaper and setup can be relatively quick, simply requiring an [app download](https://www.financedigest.com/40000-downloads-of-e-money-app-devere-vault-by-end-of-2017.html "40,000+ downloads of e-money app deVere Vault by end of 2017") and authorisation from the merchant’s bank to get started. SoftPOS [technology can also boost financial](https://www.financedigest.com/shakedown-on-horizon-for-financial-technology-world.html "Shakedown on horizon for financial technology world") inclusion. In countries where digital [payment acceptance is not yet ubiquitous, the ability to turn existing smart devices into payment acceptance devices reduces barriers to payment and enables strong](https://www.financedigest.com/the-late-payments-toolkit-how-to-keep-the-cash-flow-strong.html "THE LATE PAYMENTS TOOLKIT – HOW TO KEEP THE CASH-FLOW STRONG") economic growth. **Risks and adoption hurdles** While SoftPOS [technology offers great opportunity](https://www.financedigest.com/computer-assisted-anesthesia-systems-market-industry-analysis-opportunities-technology-demand-top-players-and-growth-forecast-2027.html "Computer Assisted Anesthesia Systems Market Industry Analysis, Opportunities, Technology, Demand, Top Players and Growth Forecast 2027"), it may not be the right choice for everyone. In fact, the ‘traditional’ payment terminal might be the smart choice for high-throughput retailers like supermarkets, where customers are buying in volume and have a very clear journey through the store, [ending at the payment](https://www.financedigest.com/the-end-of-payments-as-we-know-it.html "The end of payments as we know it") point. Existing payment terminals can operate at greater speed and benefit from high levels of [consumer familiarity and trust](https://www.financedigest.com/trusting-in-trust-marks-enhancing-consumer-trust-in-your-ecommerce-business.html "Trusting in trust marks: enhancing consumer trust in your ecommerce business "). The challenge for SoftPOS adoption is that smartphones are not immediately recognised as legitimate payment terminals. Not everyone may feel comfortable about tapping their payment card or smartphone against another person’s smartphone, rather than the trusted payment terminal they are familiar with. And in circumstances where a PIN is required, even more people may have concerns and questions about entering this number into a stranger’s smartphone. For example, if you key in your PIN, could lingering fingerprints on the phone screen indicate what your code is? It is an unlikely scenario but potential [solutions to alleviate this concern are being explored](https://www.financedigest.com/exploring-the-key-features-of-bnpl-solutions.html "Exploring the key features of BNPL solutions"), such as ‘revolving keypads’, where the numbers randomly change place every time. But this highlights the significant [challenge SoftPOS technologies face](https://www.financedigest.com/under-saved-and-underprepared-women-face-challenges-saving-for-retirement.html "UNDER-SAVED AND UNDERPREPARED: WOMEN FACE CHALLENGES SAVING FOR RETIREMENT") in achieving widespread adoption. The [digital readiness](https://www.financedigest.com/an-analysis-of-vc-investment-in-the-defence-sector-and-the-mods-readiness-to-exploit-digital-opportunities.html "An analysis of VC investment in the Defence sector and the MOD’s readiness to exploit digital opportunities") of a market is also a key consideration. In digitally-advanced societies like the Nordics – where 80% of payments are now contactless – [consumers are primed to use this technology](https://www.nets.eu/Media-and-press/news/Pages/Nets-launches-Softpay-together-with-Softpay-turning-the-mobile-phone-into-a-contactless-payment-terminal.aspx) as they are used to making digital payments. However, other regions which are less [digitally advanced](https://www.financedigest.com/digital-dissertation-to-drive-the-advanced-wound-dressing-market.html "Digital dissertation to drive the Advanced Wound Dressing Market") may be less disposed to this technology and take years to adapt their behaviour. [Payments are on a never-ending journey to provide a seamless experience for customers](https://www.financedigest.com/2019-year-customers-take-control-payments.html "2019: The year customers take control of payments"), while remaining highly-secure. Surely it is too early for a swan song for payment terminal hardware, but we’re likely to see a [world very soon where ‘hard’ and ‘soft’ payment](https://www.financedigest.com/around-the-world-in-mobile-payments.html "Around the world in mobile payments") acceptance devices coexist in harmony, delivering for different use cases and enabling more seamless experiences in store. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---