Contactless payments: Number of merchants using SoftPoS solutions to grow nearly 500% in five years: Report

Technology for MSMEs: By eliminating the need for traditional hardware, retailers can leverage softPoS to save on the cost associated with traditional POS terminals.

softpos payments
The volume of contactless payments is also expected to jump from 195 billion in 2022 to 408 billion by 2027 globally. (Image: pixabay)

By Parvathy Pillai

Technology for MSMEs: Owing to the increasing use of contactless payments, the total number of merchants deploying software-only point of sale (softPoS) solutions will cross 34.5 million globally by 2027, up 475 per cent from 6 million in 2022, according to a whitepaper released by the market research firm Juniper Research on Monday. Moreover, the volume of contactless payments is also expected to jump from 195 billion in 2022 to 408 billion by 2027.

“Therefore, consumers will come to expect contactless acceptance as standard; forcing smaller merchants to adopt contactless-capable POS solutions. Merchants are anticipated to embrace soft POS, based on cost savings achievable from eliminating the need for additional hardware, as well as mobility advantages over contactless POS,” the whitepaper Traditional PoS vs Soft PoS noted.

The difference between a softPoS, a mobile Pos (mPoS), and an Android PoS machine is that a softPoS solution enables merchants to accept payments through an app on a smartphone without the need for any additional hardware. On the other hand, mPoS is a light, wireless payment device while Android PoS devices are akin to smartphones.

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“This (softPoS) will be profound for small-sum and mobile merchants that must accept contactless transactions, but lack the need for high-cost dedicated terminals. As such, the research recommends soft POS vendors must look to target micro and mobile merchants; designing solutions that meet their unique needs,” the whitepaper said.

By eliminating the need for traditional hardware, retailers can leverage softPoS to save on the cost associated with traditional POS terminals. “SoftPoS terminals are therefore comparatively cheaper than hardware-based POS, whilst also offering greater convenience due to their size and mobility.”

In India, the National Payments Corporation of India (NPCI) had last year tied up with SBI Payments and also Turkey’s global payment solutions company – PayCore for the launch of RuPay SoftPoS for millions of Indian merchants to accept contactless payments up to Rs 5,000 on their smartphones. Also, the digital payments network PayNearby had partnered with Visa and RBL Bank in August last year to launch softPoS and mPoS for retailers in its network. Among other players in the softPoS segment in India are Cashfree Payments, Infibeam, Mastercard, etc.

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