In the past, accepting contactless card payments required a dedicated card machine or a card reader connected to a phone or tablet. However, thanks to technological advancements, a new solution called ‘softPOS’ has emerged, allowing you to accept contactless payments directly on your smartphone.
SoftPOS, which stands for ‘Software Point of Sale,’ is a software-based solution. It turns your smartphone into a complete contactless payment terminal, eliminating the requirement for extra hardware such as a card reader. This innovative approach enables merchants to accept payments conveniently and securely, offering a seamless payment experience to their customers. With UniPay’s softPOS solution, the payment process becomes more streamlined and accessible, empowering businesses to embrace the benefits of digital transactions without the hassle of traditional hardware-based systems.
SoftPOS is an innovative software solution that transforms an NFC-enabled mobile device into a contactless payment terminal, excluding needing an external card reader. With the SoftPOS solution, merchants can use a payment app on their smartphones or tablets to create a transaction and accept contactless payments by simply tapping a card or digital wallet on the back of the device.
This solution relies on Near-Field Communication (NFC), a wireless technology that operates within a short communication range. It enables secure communication between devices nearby. SoftPOS is specifically designed for smartphones, tablets, and other mobile touchscreen devices with NFC capabilities.
Different payment networks have their own names for SoftPOS. Mastercard refers to it as Tap On Phone, while Visa calls it Tap To Phone. Although SoftPOS is still a relatively new technology, it is gaining attention and can potentially revolutionize payment acceptance. While it has not become mainstream, the “tap on the phone” concept seems to be the more widely recognized and preferred term for this emerging technology.
How softPOS works
Almost all new smartphones use NFC technology and should, in theory, be ready to accept tap payments. But a certain setup is required.
For accepting softPOS payments, merchants need to have the following:
Android device (iOS is not compatible with softPOS)
A merchant account from a softPOS payment processor
Tap-on-phone app connected to this merchant account
Only a limited number of tap-on-phone applications are available in the UK, with notable examples being Viva Wallet POS and myPOS Glass, which are European companies. It’s important to note that these softPOS apps are compatible exclusively with Android devices and cannot be used on iPhones.
To accept contactless payments, your business must establish a connection with a credit card processor that facilitates the receipt of card transactions into your designated account. Creating an account for myPOS and Viva Wallet involves an online sign-up process and documentation submission. Additionally, unless you receive payouts through an online account provided by the payment platform, you will need to link a bank account.
As far as the registration process is complete, you gain the ability to proceed by downloading the Android app onto your NFC-enabled mobile device. The app’s software is specifically designed to securely process cards in accordance with stringent industry standards set by EMVCo and PCI. It utilizes one-off dynamic cryptograms for enhanced security.
To initiate a transaction, log into the app and enter the desired amount, ensuring its accuracy. Then cardholders should place their credit or debit cards and mobile wallets against the back of their phone. Speaking about mobile wallets, we keep in mind Apple Pay, Google Pay, and Samsung Pay. It is necessary to wait until the transaction is completed. If a PIN is required, the app will display a PIN pad for the customer’s convenience.
To process transactions securely over the internet, softPOS relies on the mobile connectivity of your smartphone, whether it be 3G, 4G, or WiFi. And it is worth noting. As a result, softPOS functionality is not available in offline scenarios.
iPhone incompatibility and lack of apps are issues
Despite the potential convenience and expectations of replacing traditional card machines, softPOS remains a relatively niche payment method. There are several reasons.
First, there is a limited availability of softPOS apps for merchants. Many global softPOS apps claim to be among the first, but these claims often lack credibility, especially when some apps have not even been launched. It creates a competitive landscape among providers vying to become the market leaders in softPOS.
Additionally, some apps mention that an iOS version is “coming soon.” However, it is essential to note that Apple’s developer documents state that “Core NFC doesn’t support payment-related Application IDs,” which means that softPOS functionality is currently restricted to Android devices. Because many smartphone users use iPhones, this poses a significant limitation.
While there has been speculation that Apple may develop its tap-on-phone solution to compete with Android, Apple’s plans remain unknown.
Furthermore, both consumers and merchants are accustomed to the idea of a dedicated card reader separate from the merchant’s personal smartphone. There is a level of trust required for customers to allow a stranger to handle their payment card, and this may still be a concern for some, although it could become less significant as softPOS gains more widespread acceptance.
Small businesses continue to opt for inexpensive card readers familiar to merchants and customers, which they use alongside their smartphones.
As the softPOS market evolves and addresses these challenges, it has the potential to become more mainstream and widely adopted by both businesses and consumers.