EXCLUSIVE: “Finally, a Hard Launch For softPOS?” – Victor Padee, Aevi in ‘The Paytech Magazine’

Retailer adoption of softPOS has increased dramatically since Apple introduced Tap to Pay in 2022. Victor Padee from leading in-person payment orchestrator Aevi believes softPOS is about to have its moment

E-commerce may be growing at twice the rate of in-person transactions, but make no mistake, physical shopping isn’t going anywhere. The way we pay in-store, however, is evolving fast.

Juniper Research put the total value of POS terminal transactions in 2024 at $17trillion. Total e-commerce transactions, on the other hand, were just $7trillion. But the way those in-person payments are physically executed might change dramatically over the next two years, driven by a solution that was originally conceived for micro and small merchants, pop-up shops and market stalls.

SoftPOS – allowing phones or tablets to be used as roaming POS devices – was a god-send for traders who couldn’t afford to invest in fancy wired-in checkouts or were trading at events and stands with limited or no means to connect to electricity and a static phone line. But now there’s evidence that much larger merchants see softPOS as solving a number of enterprise-sized problems, too. In fact, according to a report by Pyments Intelligence and Discover Global Network in 2023, 71 per cent of merchants already believed it wouldn’t be long before softPOS replaced traditional payment terminals.

That’s driven by their experience of mobile digital wallets. They are now the fastest-growing payment method in the world, accounting for approximately 30 per cent of global POS transaction value Already worth more than $10.8trillion, they are projected to account for approximately $19.6trillion in POS spending by 2027, according to The Global Payments Report by Worldpay.

Thrilling me softly

In the UK, industry group UK Finance said in 2024 that a third of adults were already using mobile contactless payments at least once a month. Lloyds Bank estimates that 87 per centof face-to-face payments in the UK are now made using contactless technology. Mastercard, meanwhile, forecasts that the global user base for digital wallets will grow to 5.2 billion by 2026. That’s more than 60 per cent of the world’s population.

Aevi, a specialist in-person payments orchestration, also believes softPOS is about to have its moment.

“Consumer behaviour has shifted. Where tapping a phone on another phone once felt unfamiliar, today it’s becoming the default. This change opens massive opportunities for merchants who are ready to embrace softPOS,” says Aevi’s Head of Global Business Development, Victor Padee. “The initial thinking behind softPOS was reducing hardware costs because micro-merchants didn’t have to buy a terminal. But the way we see it, it’s more about creating a flexible and scalable payment solution that enhances the customer experience and can help support high transaction volumes.

“Cloud infrastructure will be critical to enabling enterprises to deploy softPOS at scale without any significant upfront cost,” he adds. “And it could be seen as a great way to test a certain market or a certain use case. Or they could just use it as a queue-busting solution for busy times. Whatever reason they add the technology, I believe that it’s going to be a part of the future tech stack because softPOS NFC technology goes beyond the payment. Now it’s bleeding from the micro-merchant to the large merchant, it will definitely be utilised in different use cases.”

For larger enterprises, softPOS has a number of advantages. It’s easy to scale for one. A single softPOS app can be certified once and deployed across multiple mobile devices, making it appealing for platform providers such as couriers and taxi operators while acting as a queue-buster for bricks and mortar retailers at busy times. It’s cheap. According to a Kaiser Associates study, one out of three merchants quotes cost as a reason for not upgrading payments technology, especially when the cost of maintaining and upgrading terminals can be counted in the thousands.

“The initial thinking behind softPOS was reducing hardware costs because micro-merchants didn’t have to buy a terminal”

It’s always up to date. SoftPOS can effortlessly keep up with emerging payment methods. And, lastly, it offers a unified platform for data analytics. Although the technology had been around for a while, it wasn’t until 2022 when the PCI Security Standards Council brought softPOS within the PCI framework and Apple introduced Tap to Pay, allowing iPhones to be used as payment devices with softPOS systems, that the technology grew up.

In a report produced by Aevi the same year, it identified softPOS as ‘the next evolutionary step from smartPOS, giving enterprises the ability to move away from legacy systems’. The report added: “The hardware will not necessarily change with a combination of smartPOS type, BYOD (bring your own device), tablets, tills, etc… but the underlying software running them could and probably will in the future be softPOS… a client could target a softPOS-only strategy and roll that out on a myriad of managed and unmanaged devices.”

Based on its findings, Aevi took a strategic approach to building an orchestrated network of softPOS providers, selected according to UX, UI, flexibility, technology security and localisation. Through a single integration, customers now get access to multiple softPOS providers all over the globe.

It’s another example of how payment orchestrators are helping merchants reduce complexity and meet customer expectations.

“A truly connected omnichannel payment stack is the one that delivers a consistent experience to both merchants and customers, no matter the device, channel or payment method,” says Padee. “The foundation of this is seamless integration for a single API, which enables merchants to manage all of their payments or payment times in one place without juggling multiple systems. It’s all about a unified view of the customer data, which is crucial for personalisation and insight.”

For those who sell across borders, a unified view is increasingly challenging as payment preferences diverge. In APAC and LATAM, for example, alternative payment methods have seen huge growth in recent years while, in the US and Europe, it’s the card – in physical form or provisioned into a wallet – that’s dominant.

“Preferred payment methods vary by country. That creates complexity for merchants trying to deliver a consistent experience across borders,” says Padee. “They need to strike a careful balance between embracing the future and respecting these preferences. They must continue to support flexible payment processing options whilst also accommodating cash users or more traditional methods.

“Regulatory complexity adds another layer of difficulty. Within Europe, GDPR, PSD2, fees refunds, settlement times, exchange rates and relationship management are all part of handling cross-border payments.

“Merchants have to navigate a maze of rules while staying competitive. [So] we believe integrated payment solutions will become a standard as businesses seek to create a more cohesive experience across all touchpoints, blurring the line between physical and digital commerce.”

Adapting your payments stack in such an environment is often made harder, though, by vendor lock-in, where customers are tied down to hardware leases, preventing them from trialling or adopting new systems.

“It causes significant frustrations for those merchants who want to grow and adapt their businesses,” agrees Padee “Many solutions are extremely hard to implement or require costly customisation.”

As an orchestrator, Aevi allows businesses to switch providers quickly and adopt new technologies without major disruptions or losing current or historic insights and data.

“Having the ability to move your card acquiring process from one acquirer to another, without changing your hardware puts a lot of power back into merchants’ hands,” says Padee.

Combine that with the flexibility that a softPOS system offers and merchant payments could be radically transformed.

This article was published in The Paytech Magazine Issue 16, Page 24-25