As digital payments technology evolves, software point-of-sale (SoftPOS) solutions are emerging as a transformative force in payments. With the potential to democratize payment acceptance, SoftPOS will revolutionize the way merchants – both small and large – conduct transactions.
A PYMNTS Intelligence report, “How SoftPOS Is Poised to Revolutionize Payments,” a collaboration with Discover Global Network, examines the implications of SoftPOS for various business sectors and the expected growth in adoption.
Unleashing merchant potential
SoftPOS technology allows merchants to accept contactless payments using just a smartphone or tablet, eliminating the need for expensive hardware typically associated with traditional POS systems. This is beneficial for small businesses and mobile suppliers such as food trucks and service providers, who can now operate without being tied to a fixed location. According to the report, 71% of merchants believe SoftPOS will replace traditional terminals, underscoring a strong consensus on the future of the technology.
In addition to its appeal to micro-merchants, SoftPOS also offers significant benefits to brick-and-mortar businesses. For example, traditional POS systems often lead to long wait times during peak hours, which can frustrate customers and lead to lost sales. Using SoftPOS, associates can accept payments directly from customers anywhere in the store, improving the shopping experience and reducing bottlenecks. This flexibility not only improves customer satisfaction, but also allows retailers to optimize staff deployment.
Solving age-old pain points
Traditional POS systems have pain points that can hinder business growth, including high costs, limited payment options, and poor data analytics capabilities. Setting up a traditional POS system often requires a significant investment, ranging from $3,000 to more than $10,000 per year for maintenance, a barrier that can deter small businesses. SoftPOS systems, on the other hand, require minimal upfront investment and offer cost-effective maintenance.
Additionally, traditional POS devices struggle to keep up with emerging payment methods, making it difficult for businesses to offer a wide range of payment options. However, SoftPOS is designed to enable various contactless and mobile payment methods, broadening customer choice and improving transaction security. A unified platform for real-time data analytics is another benefit of SoftPOS, allowing merchants to streamline their operations and make data-driven decisions.
Rising popularity and future growth
Consumers’ increasing preference for contactless payments is expected to fuel the explosive growth of SoftPOS technology. According to the report, the number of merchants using SoftPOS is expected to rise from six million in 2022 to 34.5 million in 2027 – an increase of 475%. This increase is closely linked to the overall increase in contactless payments, which are expected to more than double from 195 billion transactions in 2022 to 408 billion in 2027.
Technology companies like PayPal and Venmo are investing significantly in SoftPOS technology to better serve the estimated 130 million small to medium businesses (SMBs) worldwide that lack electronic payment options. As SoftPOS becomes mainstream, it has the potential to change the retail landscape by facilitating personalized and mobile payment experiences. This technology addresses long-standing challenges for merchants while aligning with evolving consumer trends, making SoftPOS a major disruptor in the payments industry.