The software POS is a revolutionary new technology which allows merchants to accept card payments directly on their phone or devices without the need for any additional software. Currently the existing software POS solutions work only with the Android OS.
Since plastic payment cards came around in the middle of last century, merchants have always had to have specialized hardware to accept payments. This hardware is generally referred to as Point of Sale (POS) terminals.
Initially cards were accepted through manual imprinters, which did not allow for real time approval. Later businesses moved to electronic authorizations and the first electronic credit card authorizations were done over the phone, and often took upward of 5 minutes. Merchants had the choice of imprinting their transactions or calling in for an authorization. Point of Sale terminals, allowing fast approval of the transactions emerged in 1979, and greatly reduced the time required to process a credit card.
In recent years new POS terminals appeared addressing two main issues – to reduce the requirements for special connections to the banks and expensive equipment and to increase the functionalities of the POS terminals.
To reach more merchants mobile POS terminals (mPOS) were developed. They connect to a mobile device and use it to communicate with the card platforms. mPOS terminals reduced the cost for the merchants and addressed the problem of having to have dedicated lines to connect to banks. Another trend in the POS terminals is to add additional functionalities and bring more value to merchants allowing them to run additional applications on the POS terminal.
In all the cases above, however, merchants always had to have additional hardware to accept payment cards.
no hardware - the software POS allows merchants to accept payments from contactless cards or from smart phones (from wallets like ApplePay, Android Pay, SamsungPay) without the need for additional hardware such as POS terminals or mPOS. Payments can be accepted on a smart phone or another device as long as it is NFC enabled.
any bank, any phone - the software POS is usually bank and phone agnostic – it can work with any bank and acquirer and on any NFC enabled Android phone or device.
multiple payment methods - certain software POS solutions, like phos, are also able to accept multiple payment methods – built on the various communication channels supported by the phone – for example, utilising the phone camera they can accept QR based payments from wallets like AliPay, WeChat, phyre, A1, VivaPay, etc.
value added services - since the software POS is based on the Android OS, it can allow integration of other business applications with the payment functionality. Phos leads the way with a market first loyalty and automated marking solution allowing SME merchants to benefit from a feature rich loyalty program without any upfront investment. In other words, the phone becomes the business hub of the merchant.
Standard POS solutions have hit a wall in their further development as micro, small and medium-sized merchants find them too expensive or inconvenient. The alternative for small merchants is to accept only cash, but dealing with cash is very expensive and not always secure.
The merchants who do use POS terminals see no additional value in them as they are expensive and inefficient.
The current retail payment infrastructure was developed 40 years ago, when there was no internet and no mobile phones. At the same time, even with the explosion in e-commerce, more than 85% of all consumer spending is still done in brick and mortar shops. Whilst e-commerce has pioneered and promoted technological development, the retail payment experience was left behind in the last century.
The software POS bridges the past with the future – it utilises the existing card payment infrastructure developed over decades and brings it to the 21st century. It makes this infrastructure available on the mobile phone and other devices that have become an integral part of our life and even more than that – our life seems to revolve around the mobile.
The software POS is a new development in the mobile payments market, suitable for any market with high penetration of contactless and mobile wallet payments.
It offers the unserved and underserved merchants a solution for accepting contactless payments, while SMEs can get a better alternative to traditional POS terminals.
In Europe alone, there are 50 million merchants and 17 million POS installed, i.e. there are about 35 million micro and small merchants who will benefit from the software POS. At the same time, the market fundamentals are very supportive for the … of the software POS as smartphone penetration is de facto 100% and there is 90% contactless card penetration.