Consumers consider reliability, convenience, and speed crucial factors when selecting a brand. Businesses can use these parameters to streamline payment processes by delivering speed and personalization. From the consumer’s point of view, mobile devices are already a reliable and convenient payment tool, all thanks to streamlined eCommerce, peer-to-peer transactions, and mobile wallet features. And now, this online payment trend is moving towards software point-of-sale (SoftPOS) technology to enable secure and contactless payment acceptance without needing additional hardware.

According to the Fortune Business Insights report, the global SoftPOS market is projected to reach $1.4571 billion by 2032. This shows how quickly businesses are shifting from traditional POS mechanisms to SoftPOS.

SoftPOS: A Growing Trend

The electronic POS system emerged between the late 1980s and early 1990s. It integrated sales tracking capabilities with inventory management. Back to today’s tech-driven ecosystem, thousands of advanced solutions are specifically designed to cater to industry-specific requirements. But what’s the key driver for this change? It’s changing consumer behavior and rapid tech innovations. There came a time when businesses started looking for efficient ways to process payments faster without hampering customer security and experience.

The SoftPOS, or software point of sale, is the latest advancement in the form of a smartphone application that enables businesses to accept payments without relying upon traditional payment methods (digital wallets, digital payments, contactless payments, etc.). Businesses can download the POS app on their devices and manage any transaction.

How Does SoftPOS Work?

The primary goal of launching SoftPOS was to facilitate the usage of COTS (commercial off-the-shelf), also known as “consumer devices for payments with a bank card.” These devices can be iPhones, Xiaomi, Samsung, or other recently launched smartphones. After downloading the software point-of-sale application, the smartphone will activate the NFC (Near Field Communication) antenna (an electromagnetic data exchange protocol) to accept transactions. Following are the steps involved throughout the whole process:

The seller displays the payment amount directly in the app
The consumer will fill in his/her bank card details on the smartphone for contactless payment.
The SoftPOS app will request the encrypted bank card details and send them to the server via a payment scheme.
The payment will be completed and sent to the seller’s and buyer’s banks. It will get authorized in seconds.

The following are the technologies involved in running the SoftPOS solution:

PIN on Glass (POG) allows customers to enter PIN directly on the merchant’s smartphone screen, ensuring security via PCI-compliant encryption.
Near Field Communication (NFC) enables contactless payments by securely reading card details when a customer taps a card or mobile wallet on the merchant’s device.
Payment Gateway Integration securely authorizes and settles transactions between the merchant, bank, and customer.
Tokenization replaces sensitive data with tokens, reducing data breach risks while ensuring secure payment processing.
Cloud-based processing involves processing transactions via a cloud server and eliminates the need to store data in the merchant’s device.

SoftPOS vs Traditional POS System

Aspects	SoftPOS	Traditional POS System
Description	A software-based application that turns smartphones or tablets into payment terminals.	A physical POS system that includes hardware like card readers, terminals, and registers.
Hardware Requirement	No additional hardware is required as it works on NFC-enabled devices.	It requires dedicated hardware, including a POS terminal and card reader.
Setup and Installation	It is quick and easy to set up and can be installed as an app.	It has a complex setup structure and requires hardware installation and configuration.
Cost	It is less costly and doesn’t require investing extra money in POS hardware.	It has higher upfront costs because of hardware purchase and maintenance.
Flexibility and Mobility	It is highly flexible and allows businesses to accept payments anywhere.	Limited to fixed locations or works with mobile POS units.
Security	Uses encryption and tokenization techniques for secure transactions.	Secure, but may require additional security measures for compliance.
Internet Dependency	It can work online and offline, depending on the provider.	Usually, it requires a stable internet connection for seamless transactions.
Suitability	Ideal for small businesses, pop-up stores, and service-based industries.	Suitable for retail stores, large enterprises, and restaurants with high transactional value.

4 Business Benefits of SoftPOS

Cost-effective Solution

SoftPOS helps reduce the transactional barrier related to card payments. Setting up traditional POS systems involves heavy upfront hardware, software, and maintenance costs. SoftPOS, however, requires only smartphones or tablets to set up payment terminals without additional hardware. This makes software point-of-sale applications an affordable solution for businesses.

Flexibility and Mobility Improvement

SoftPOS facilitates on-the-go payment acceptance, unlike traditional POS systems fixed to a specific location. It is a big-time benefit for mobile vendors, outdoor events, and QSRs, where a fixed payment terminal is not an option. SoftPOS facilitates real-time payment processing, which improves customer engagement as businesses provide more personalized shopping experiences.

Seamless Transactions Improve CX

SoftPOS streamlines payment processing to create a faster and more seamless transaction experience. It works on NFC-enabled mobile wallets and cards to complete transactions quickly, reducing wait time and offering businesses user-friendly interfaces and intuitive designs.

Enhanced Data Protection with Robust Security

Software point-of-sale apps comprise advanced security features to protect customer and business details. The tokenization technique replaces critical information with unique identifiers, also known as tokens and encryption technology protects payment details during transmission. This reduces the risk of data breaches and fraud, enabling customers to gain confidence in the brand.

Partnering with Tx for POS testing would enable you to stay ahead in the quickly transforming digital business landscape. We focus on delivering cutting-edge automated POS testing solutions to help you seamlessly set up the SoftPOS application. Our unparalleled expertise in point-of-sale software testing would help you deliver flawless payment experiences with:

Prover Expertise

We successfully automated POS testing for a global retailer and ensured seamless omnichannel transactions.

POS Modernization Success

We assisted a leading QSR brand in modernizing its POS systems, ensuring smooth digital transformation while reducing the software release cycle by 80%.

Comprehensive Testing

Our expertise covers functional, security, compliance, and performance testing across all POS systems, including SoftPOS and traditional POS.

Security and Compliance Management

We ensure your system adheres to PCI-DSS, EMV, and other industry standards to protect payment data and maintain compliance.

AI-driven Insights

Our AI-powered automation enhances accuracy, efficiency, and test coverage to accelerate time-to-market.

Summary

SoftPOS is upscaling payment processing by eliminating the need for traditional hardware-based POS systems. By turning smartphones into secure payment terminals, businesses gain flexibility, reduce costs, and enhance customer experience. Having helped global retailers and QSR brands modernize their POS systems, Tx ensures enterprises stay ahead in the evolving payment landscape. Whether functional, security, or compliance testing, Tx’s expertise helps businesses deliver flawless payment experiences in today’s fast-moving digital world. Contact our experts now to know how we can assist you with SoftPOS testing.

The post SoftPOS Over Traditional POS: Why Businesses Need to Make the Shift first appeared on TestingXperts.

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SoftPOS Over Traditional POS: Why Businesses Need to Make the Shift