In a positive development, SoftPOS now enables merchants to accept contactless payments without dedicated equipment. Sellers no longer need a conventional terminal to collect funds. What is this innovative technology, and how does it work? What are its advantages? How is it implemented? In this article, we explain what SoftPOS is, how it functions in the payment process, and in what way businesses can benefit from it.

What’s in this article?

• What is SoftPOS?
  
• How SoftPOS works
  
• Differences between mPOS and SoftPOS
  
• Which businesses are a good fit for SoftPOS?
  
• Advantages of SoftPOS
  
• Disadvantages of SoftPOS
  
• What does SoftPOS cost?
  

What is SoftPOS?

Software point-of-sale, or SoftPOS, is a modern collection solution that turns smartphones and tablets into secure electronic payment terminals (EPTs). Merchants can accept contactless payments with an iOS or Android device via SoftPOS, also known as Tap to Pay, when using near-field communication (NFC) and a dedicated mobile app.

This software platform eliminates the constraints of traditional EPTs. Conventional equipment requires a card reader and inconvenient cables. SoftPOS accepts card or digital wallet transactions from anywhere—whether in line, at events, tableside, or at markets—simplifying the sales workflow and accelerating the checkout journey through greater flexibility.

How SoftPOS works

Using a mobile device for payments is as simple as downloading the SoftPOS software from a payment processor or bank. During the sale, the seller launches the application, enters the amount on the display, and then presents the unit to the client. The buyer taps the card, smartphone, or smartwatch on the merchant’s device and validates the charge.

For amounts greater than €50, the customer must also enter a PIN. The transaction is safeguarded in compliance with the Payment Card Industry Data Security Standard (PCI DSS), protecting users’ personal information. Upon request, the seller can send a receipt by email or text message.

Differences between mPOS and SoftPOS

Both SoftPOS and mPOS (mobile point-of-sale) use mobile devices to accept contactless payments. mPOS also requires a small physical card reader to function, making it a compact EPT.

SoftPOS, by contrast, works through just the hardware’s integrated features. It does not require an external reader to take secure transactions. It is important to note that the purpose of mPOS and SoftPOS offerings is to complement traditional EPTs, not replace them.

Merchants can take contactless transactions with a smartphone or tablet using Stripe Terminal’s Tap to Pay. Terminal enables businesses to offer various payment methods to their customers and to develop their own point-of-sale applications. In addition, Terminal unifies online and in-person fund management and directly integrates into Stripe’s infrastructure.

Which businesses are a good fit for SoftPOS?

SoftPOS is particularly beneficial for on-the-go professionals or vendors who accept payments seasonally, such as itinerant traders, food truck owners, drivers, delivery service providers, temporary event organizers, and associations. The technology is also applicable to businesses that want to get started but prefer to avoid the upfront costs of installing and maintaining a traditional EPT. Furthermore, sole proprietorships, independent contractors, artisans, and the self-employed appreciate SoftPOS’s versatility and low initial cost.

However, it is not limited to small and medium-sized businesses (SMEs). Retail stores that want to add a complementary payment service to their countertop EPTs value SoftPOS. It speeds up tableside support in restaurants. Merchants can also use a SoftPOS system when a traditional EPT malfunctions.

Advantages of SoftPOS

SoftPOS offers several upsides for both vendors and customers. As a settlement solution, it’s straightforward, efficient, secure, quick to set up, and inexpensive.

Maximum mobility and multiple collection points

SoftPOS lets you finalize a purchase anywhere—whether at events, private sales, shops, and pop-ups, in line, or in a store aisle. It simplifies the buyer payment process by, for example, allowing them to skip the line at the sales register after receiving a recommendation from an associate. The salesperson can also take payment on the spot. Staff benefits from multiple collection points and an accelerated, convenient checkout workflow.

Lower equipment costs and ease of use

This agile platform reduces the costs associated in buying and maintaining hardware. Straightforward to use, SoftPOS does not require any technical training since mobile apps are usually more intuitive.

Compatibility with contactless payment methods

One of the main advantages of SoftPOS is its compatibility across a wide range of payment methods. These include contactless cards (e.g., Visa, Mastercard, and Carte Blanche) and digital wallet platforms (e.g., Apple Pay, Google Pay, and Samsung Pay). The shopper benefits from a large number of options and can pay for orders placed through the most convenient approach.

Security

SoftPOS delivers a protected payment experience built on strict industry standards. Tokenization protects every purchase by replacing sensitive details with non-usable data, keeping card information shielded throughout the procedure. SoftPOS applications also use encryption and two-factor authentication for additional transaction security.

Enhanced customer experience

SoftPOS speeds transfers, reduces wait times, and modernizes the charge process from start to finish. Businesses can use this software solution to provide customers with a superior purchasing experience. It responds to rapid market changes and the expectations of younger demographics.

Disadvantages of SoftPOS

SoftPOS also has some minor disadvantages. For it to work, a mobile device must be charged and connected to the internet. Lack of a physical receipt could discourage shoppers from using this payment option. Additionally, some merchants might hesitate to adopt this method due to security concerns.

What does SoftPOS cost?

Most often, service providers charge a fixed or variable commission for each transaction. Since the fees vary by service provider, it’s a good idea to compare proposals before launching a SoftPOS system. Some providers require a monthly subscription or a charge to open an account.