Brad Hyett

By Brad Hyett, CEO of phos

As we enter a new year, retailers and merchants alike should be looking to future proof their payment offerings for customers. There has never been a better opportunity to adopt cutting-edge Software Point of Sale or ‘SoftPoS’ technology and innovate in response to the rapid growth of digital payments.

SoftPoS allows merchants to accept card payments directly on their phones or mobile devices without the need for any additional, specialised 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 total number of merchants deploying SoftPoS solutions will surpass 34.5 million globally by 2027; rising from 6 million in 2022 according to Juniper Research. The explosive growth of SoftPoS is being driven by Apple’s entrance into the space; enabling iOS users to access an affordable mobile POS solution on iPhone for the first time.

With SoftPoS solutions now readily available for both Android and iOS operating systems, how does SoftPoS orchestration create innovative partnerships to help Tap to Pay thrive?

How SoftPoS orchestration is deploying Tap to Pay for legacy technology providers

Partnering with an orchestration layer enables legacy technology providers and financial institutions to quickly bring ‘Tap to Pay’ solutions to market. In short, the ability to take secure payments between a traditional card or digital wallet and an NFC-enabled mobile device.

This is huge for legacy players as reliance on outdated payment technology such as chip and pin machines – and a lack of affordable alternatives – can greatly reduce the payment options they’re able to provide their customers – minimising potential revenue for these businesses.

With Tap to Pay, however, merchant customers benefit from a low-cost, easy-to-use system. This system is easy to maintain, with upgrades being managed by the SoftPoS orchestrator, allowing for the seamless integration of the latest payments innovation while continuing to meet regulatory changes and guidelines. This can all be done through a simple app download on a mobile device.

Not only does SoftPoS orchestration allow legacy technology providers to adapt to the ongoing demand for streamlined payment processing, but it can also support improved financial inclusion by providing access to low-cost, convenient and quick means of accepting digital payments.

The benefits of partnering with a SoftPoS orchestrator

New and innovative businesses that serve customers through a mobile application can simply enable Tap to Pay acceptance through their own solution using a SoftPoS orchestrator.

As well as offering this solution to customers, legacy providers can use the orchestrator’s technology stack and quickly benefit from their domain expertise instead of having to create their own in-house solution which can prove to be complicated, expensive and time consuming.

SoftPoS orchestrators can either launch a white label SoftPoS app or incorporate the technology into their existing solution to meet the rising demand for payment acceptance capabilities on mobile.

Once live, merchant customers of all sizes will benefit from the enhanced flexibility, seamless onboarding, increased access to sales data, and security that comes with a SoftPoS system.

Investment in SoftPoS and consolidation in the market

Looking at the macroeconomic picture, It’s an exciting time for SoftPoS development. What was still an emerging technology just a few years ago is now beginning to enter the mainstream thanks to recent consolidation in the market.

Earlier this year, Apple announced that it would allow third-party SoftPoS vendors to deploy their technology on iOS devices – a move that is really going to drive both the awareness and the adoption of SoftPoS. Not only is it a contributing factor to growing merchant acceptance of the technology but consumer understanding of it too. These two aligning factors will only drive more curiosity in the market in the months ahead.

Familiarity with the solution will also continue as more leading payment brands deploy ‘Tap to Pay’ solutions on iPhones. PayPal and Venmo have already announced their support for Apple’s new functionality giving merchants varied options to choose from.

For those SoftPoS vendors which decide to remain acquirer agnostic and are open to the idea of serving as an orchestration layer for legacy providers, there’s an opportunity to provide added value in this evolving market. Not only can these firms enable multi-channel distribution that can be used effectively by all types of businesses, but also promote the effectiveness of SoftPoS and its functions beyond a single acquirer – thus driving increased adoption and market penetration globally.

What’s next?

The market for SoftPoS is growing exponentially. SoftPoS orchestrators who were in early-entrant positions can establish themselves among the dominant players in the segment as more legacy providers begin to see the potential of this as yet untapped market.

The increased use of contactless payments among consumers will drive merchants to enable SoftPoS solutions to keep pace with changing payment behaviours. As the market embraces Tap to Pay functionality, it’s fair to say that contactless payment acceptance is no longer a nice to have but a must for businesses of all sizes in 2023.

Legacy technology providers and financial institutions that require assistance to deploy SoftPoS for their merchant customers, quickly and efficiently, should look to a global orchestrator to turn their payment visions into a reality.