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softPOS – The future of contactless payment; or payment all together.
What is softPOS?
Soft Point-of-Sale (POS) is not a type of hardware like you might be thinking. Instead, it is a new and revolutionary means that allow merchants to receive card payments directly on their mobile devices. Traditionally, merchants require a card machine or card reader to accept the various contactless payment methods. However, with the technological advancements that birthed softPOS, retailers are now able to accept such payments with just their smartphone. As such, this software POS solution completely wipes out the necessity for business owners to purchase and maintain additional devices or hardware terminals such as a tablet POS or a desktop POS.
How does softPOS work?
The softPOS solution relies on a technology known as Near Field Communication (NFC). Contrary to Wi-Fi and Bluetooth, NFC technology is based on proximity and the range is extremely limited. It also only allows two devices to communicate at any given time, which acts as a security measure to prevent hackers from accessing sensitive payment data.
Most mobile devices are equipped with NFC technologies, including smart wearables such as the Apple Watch or other fitness trackers. [1] softPOS is the latest innovation in POS technology, and refers to software that merchants can download on any NFC-enabled Android mobile device to turn it into a payment acceptance device. [2] With such applications, retailers and restaurant owners will be able to accept contactless payments on just their mobile phone, disregarding the need for a payment terminal. The Android devices will be able to facilitate the acceptance of payment from not only credit card and debit card but also from other mobile phones with tokenization. [3] Using applications to set up digital wallets, customers will be able to simply hover their Android phone close to the merchant’s mobile device to pay as the merchant’s phone now functions as a contactless payment terminal.
To ensure extra security, the software provider usually sets a limit on the amount a customer can pay in a single transaction without a passcode. Hence, in order for him to pay above the limit, he would be prompted for a pin entry by the merchant to verify his identify. Once he inputs the confirmation code, the transaction would then be allowed through and be considered complete.
Example of payment limit function by MeaPay
Why is softPOS so trendy?
For starters, the world of contactless payment has been forced to a steep accelerated growth due to the pandemic. Due to safety concerns, people are more willing to adopt such a form of payment in order to avoid coming in to contact with others by paying cash or tapping their cards or mobile phone on public surfaces.
However, beyond that, perhaps people are able to see the true value of such a system. To paint a clearer scenario, picture a café setting – where there are many customers and only one POS hardware system to process their orders and accept payment. In a world where softPOS is adopted, multiple staff would be able to accept orders from multiple customers at one go, reducing the issue of bottlenecking at the counter and distributing the workload more manageably.
Waitress taking order – featuring iMin’s D4 Desktop POS
Benefits of softPOS:
There are a plethora of other reasons that one should adopt a softPOS solution. On the business side, it can help owners save costs by forfeiting the need to buy and maintain an expensive hardware system. For new entrepreneurs and small start-ups, this seemingly meager cost saved could go a long way for them. This allows entry for new merchants into the electronic payment ecosystem where they otherwise would not be able to.
Not to mention, it can also save a lot of time by reducing the duration between the time of purchase and the time is taken for your staff to learn how to use the software, as compared to learning both the software and handling the hardware. You would also eliminate the need for an additional specialist or onboarding expert to guide you through installation processes, saving time and money. This also removes the problem of having hardware issues such as physical malfunctions and wear and tear; and software challenges such as old hardware being incompatible for software updates, warranting the need to purchase a brand new one.
This system also helps your customers enjoy a better checkout experience with you. By removing bottlenecking at the cashier – or simply improving it, customers will be able to have a frictionless card transaction or with your brand. As people are able to simply tap and go with their mobile wallets, it removes the time for awkward fiddling with wallets, cash, and change. Depending on the software, the softPOS could also allow you to manage loyalty rewards, e-receipts, accounting systems, and membership discounts all with your smart mobile phone. These attributes greatly enhance customer experience, leaving them with a good impression of your brand.
Limitations of softPOS:
Despite all the benefits that a softPOS solution can bring, there are still certain limitations that act as a barrier for merchants to adopt it. For many merchants, it is simply not feasible to solely adopt the approach because of users who are unable or unwilling to make cashless transactions. The older generation could pose a challenge to this idea as they may not be tech-savvy enough to trust or understand the way such transaction methods work and would much rather stick to the usual payment method they know – cash.
As the softPOS solution is compatible with only Android OS, for now, people who only use Apple Wallet may also find difficulties in making payments. However, Apple has recently announced its plans to introduce “Tap to Pay” on apple devices. [4] As such, this limitation may be irrelevant in just months to come.
Furthermore, by using a normal smart mobile phone, merchants would be unable to produce physical receipts to give to their customers. This may cause some customers dissatisfaction as some customers still prefer to receive paper receipts. To many, paper receipts are still a more practical means for archiving, accounting, returns, and refunds. [5]
Mobile POS printing receipt – featuring iMin’s M2 Pro
Mobile POS
People new to this may often confuse mobile POS (mPOS) and softPOS. A mPOS unit can be referred to as a smart mobile phone or tablet that has an external card reader machine attached to it. The dedicated card reader acts as the payment terminal that allows the device to accept cashless payments. Hence, the primary difference between a mPOS and softPOS solution would be the presence of an external device such as a card reader or printer that helps increase the mPOS’s functionality.
While both provide the benefits of mobility, the mPOS device can be attached with an external device that increases its functionality. For example, the iMin’s M2 is an elegant and flexible solution for your business needs. You will be able to have a printer, scanner, ordering device, and POS terminal all in one compact smartphone device.
Closing thoughts
Every business varies in terms of its goals and requirements. Despite the pros and cons of both solutions (having hardware or just softPOS), there is no such thing as “one solution fits all”. Ultimately, the decision to adopt which type of POS will depend heavily on your organization’s needs and business applications. We hope that this article has provided you with sufficient information for you to make a more informed choice. Interested to find out more? Click here.
References
[1]https://www.androidauthority.com/what-is-nfc-270730/
[4]https://www.apple.com/newsroom/2022/02/apple-unveils-contactless-payments-via-tap-to-pay-on-iphone/
[5]https://www.businesstimes.com.sg/consumer/paper-or-email-shoppers-clinging-to-printed-receipts
