SoftPOS: Saving merchants from a customer chorus of huffs & tuts

If you’ve been following Tribe Payments for a while, you’ll know that we’re big fans of SoftPOS, so much so that we even wrote a report about it. Read it, it’s really good.

Why are we so evangelical about SoftPOS? Because humans can be fickle and impatient, and we’re especially impatient when we’re waiting in line to make a payment. Keep us waiting around too long and we’ll huff and tut, turn on our heels and wheels and head elsewhere.

The good news is, with today’s payment technology like contactless and SoftPOS, merchants can avoid a chorus of huffs and tuts, and drastically slash the amount of time it takes to serve a customer. 

SoftPOS allows businesses to accept contactless payments anywhere through a smartphone or other handheld device – whether at an in-store checkout, in a taxi, or at a delivery drop-off. By simply downloading an app, businesses can turn their mobile devices into fully functional payment terminals. This shift offers significant benefits for both merchants and customers, making transactions smoother, faster, and more secure. This mobility is particularly beneficial for gig workers, event vendors, and service professionals who need a portable payment solution. 

Happy days. But first, let’s dig into why keeping customers waiting is a really bad idea.

Contactless payment is crushing queue times

The whole reason why contactless payment was brought in was to speed up transaction times, particularly in high volume, low value purchase locations like fast food, cafes and coffee shops, buses, trains and other busy in-person payment points. But just how fast are contactless transactions?

Contactless payment uses radio frequency identification (RFID), near-field communication (NFC), or quick response (QR) codes to process transactions. From the moment you tap or wave your card over a contactless POS terminal, the entire transaction – from initiation, authorisation and completion – takes just a few seconds. 

Typically, using contactless takes half the time it takes to insert a card into a POS terminal and complete a PIN entry transaction – Mastercard has reported that contactless transactions are 63% faster than using cash, and 53% faster than using a traditional credit card. It’s a no-brainer that shaving so much time off payments with contactless helps merchants to serve more customers and speed up those queues, which in turn leads to more sales, more profits, and happier customers. 

Some simple maths shows just how much merchants could benefit. Let’s say a PIN entry transaction takes 15 seconds, from the customer pulling out the card, inserting it into the POS terminal, entering their PIN and waiting for the transaction to complete. Now, let’s say a contactless transaction takes three seconds, from the customer pulling out their card or phone and tapping or waving at the POS terminal.

How many contactless versus PIN transactions could a merchant do in 60 minutes (or 3,600 seconds)?

> Contactless transactions per hour:

    3600 / 3 = 1,200

> PIN transactions per hour:

   3600 / 15 = 240

> Increase in transactions with contactless versus PIN:

   1,200 - 240 = 960

So, that’s nearly a thousand more transactions in one hour. Imagine what that could do for a merchant’s bottom line. Now imagine how many more transactions a merchant could take if instead of waiting at a fixed countertop POS terminal, the merchant had employees roaming the shop floor with mobile SoftPOS devices in hand?

However, the beauty and benefits of SoftPOS go way beyond just reducing wait times. Its flexibility allows merchants to strategically deploy staff throughout their stores, especially during peak periods. By having employees roaming the shop floor, they can meet customers where they are, and prevent queues and crowds from building up at fixed POS terminal locations in the first place, and ease the flow of customers to give them a more enjoyable experience in-store.

Speed without sacrificing security

And even better, the speed of contactless doesn’t come at the cost of security. When contactless was first rolled out, a number of media stories touted fears of shady-looking fraudsters sidling up to in-store POS terminals with jamming or intercepting gadgets that would steal customers’ data during a contactless transaction. Forgetting the fact that anyone acting in such a suspiciously implausible way would be noticed immediately, contactless payment comes with several security safeguards to prevent data being stolen.

Contactless cards use the same technology as chip and PIN cards, meaning your data is encrypted and your details are kept safe during a transaction. 

NFC-enabled devices or cards must be held within a few centimetres of the POS terminal for the transaction to work, which means any fraudster hovering nearby would have to be invisible and incredibly fast to intercept any data.

And if a customer is using Apple Pay or Google Pay on their smartphone to make payments, they’re protected by another layer of security. Whenever they make a payment in this way, Apple or Google will create a token of their cardholder data and encrypt it, and pay with that token instead of their actual card details. And as many smartphones are protected by passcodes or biometric scans of faces or fingerprints, that’s another protection layer.

Then there’s the fact that many banks will set limits on the number of contactless transactions allowed in 24 hours before asking for PIN verification. And SoftPOS providers also come with PCI DSS compliance, taking the burden of PCI auditing away from merchants.

Why SoftPOS is set to change the payments game

Wherever you look, contactless payment is taking over, and that means SoftPOS is set to surge over the next few years. Almost four out of ten payments in the UK last year were made using contactless methods, with 85% of people now using it on a regular basis.

With Android-enabled POS solutions, merchants get access to a wide range of vetted and secure third-party apps to help them run their businesses, including apps from processors, ISOs, ISVs, gateways, and developers. This means merchants have an ecosystem that allows for more options, and connects them to value-added services like inventory management, cashflow management, business intelligence and data analytics insights. 

As the demand for contactless payments continues to grow, SoftPOS adoption will only accelerate, shaping the future of commerce. 

That’s why Tribe Payments has launched our very own SoftPOS Tap on Phone solution, enabling Android smartphones to accept contactless payments, helping merchants to eliminate the upfront investment associated with physical POS terminals, and the associated running costs and ongoing expenses. Whether for small businesses or large enterprises, this innovative technology is guaranteed to reduce the amount of huffs and tuts directed at merchants.

Want to know more? Get in touch with us to find how SoftPOS can supercharge your payment acceptance capabilities. And don’t forget to read our SoftPOS report.