As digital payment technology evolves, software point-of-sale (SoftPOS) solutions are emerging as a transformative force in payments. With the potential to democratize payment acceptance, SoftPOS is set to revolutionize how merchants — both small and large — conduct transactions.
A PYMNTS Intelligence report, “How SoftPOS Is Poised to Revolutionize Payments,” a collaboration with Discover Global Network, explores the implications of SoftPOS for various business sectors and the anticipated growth in adoption.
SoftPOS technology allows merchants to accept contactless payments using only a smartphone or tablet, eliminating the need for expensive hardware typically associated with traditional POS systems. This is advantageous for small businesses and mobile vendors like food trucks and service providers, who can now operate without being tethered to a fixed location. According to the report, 71% of merchants believe SoftPOS will replace traditional terminals, highlighting a strong consensus on the technology’s future.
Beyond its appeal for micro merchants, SoftPOS also provides significant advantages for brick-and-mortar businesses. For instance, traditional POS systems often lead to long wait times during peak hours, which can frustrate customers and result in lost sales. By using SoftPOS, staff can accept payments directly from customers anywhere in the store, enhancing the shopping experience and reducing bottlenecks. This flexibility not only improves customer satisfaction, but also allows retailers to optimize staff deployment.
Traditional POS systems come with pain points that can impede business growth, including high costs, limited payment options and poor data analytics capabilities. Setting up a traditional POS system often requires a hefty investment, ranging from $3,000 to more than $10,000 annually for maintenance, a barrier that can deter small businesses. In contrast, SoftPOS systems require minimal upfront investment and offer cost-effective maintenance.
Additionally, traditional POS devices struggle to keep pace with emerging payment methods, making it difficult for businesses to offer a wide array of payment options. SoftPOS, however, is designed to accommodate various contactless and mobile payment methods, broadening customer choices and improving transaction security. A unified platform for real-time data analytics is another advantage of SoftPOS, allowing merchants to streamline operations and make data-driven decisions.
Rising consumer preference for contactless payments is expected to fuel explosive growth in SoftPOS technology. According to the report, the number of merchants utilizing SoftPOS is projected to soar from six million in 2022 to 34.5 million by 2027 — an increase of 475%. This surge is closely tied to the overall rise in contactless payment volumes, which are anticipated to more than double from 195 billion transactions in 2022 to 408 billion by 2027.
Tech companies like PayPal and Venmo are making significant investments in SoftPOS technology to better serve the estimated 130 million small to medium-sized businesses (SMBs) worldwide that lack electronic payment capabilities. As SoftPOS gains mainstream adoption, it can change the retail landscape by facilitating personalized and mobile payment experiences. This technology tackles longstanding challenges for merchants while aligning with evolving consumer trends, making SoftPOS a significant disruptor in the payments industry.
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