The POS (Point-of-Sale) market has evolved greatly since the first POS systems were introduced back in the 1970s. The earliest systems, developed by IBM, had to connect to a mainframe to process transactions and were more akin to being a screen interface than a true POS system. Today, hardware-based POS systems come in a variety of shapes and sizes, whilst recent developments have seen the arrival of soft POS solutions; each designed to fit a specific use case.
A new study from Juniper Research has found the total number of merchants deploying soft P0S solutions will surpass 34.5 million globally by 2027; rising from 6 million in 2022. This growth will be driven by Apple’s entrance into the soft POS space; enabling iOS users to access an affordable mobile POS solution.
Soft P0S is a disruptive form of POS that eliminates the need for traditional hardware by turning a mobile device into a POS terminal; capable of accepting contactless payments via NFC. The uptake of soft POS represents the start of a fundamental shift in the POS landscape, with software-led payment processing solutions now becoming a viable option for retailers to choose. The current status of the soft POS market shall be considered, followed by an overview of the threat it poses to hardware-based POS solutions and forward analysis for future developments in the landscape.
1.2 Billion iOS Users Added to Soft POS Market
The research forecasts that Apple’s decision to enable third parties to develop soft P0S solutions leveraging iOS NFC capabilities will result in an influx of iOS-specific services; leading to innovative solutions for merchants. Furthermore, the research predicts Apple’s entry will provide 1.2 billion iOS users with soft POS capabilities; unlocking a previously untapped market.
Soft POS is the latest development from Apple within the payments space; building upon Apple Pay and Apple Pay Later. Soft POS vendors should leverage Apple’s payment ecosystem by developing innovative solutions such as integrated QR payment acceptance, using Apple Pay and Pay Later compatibility to attract a broader iOS user base.
Increasing Contactless Payment Adoption to Drive Soft P0S Uptake
The research anticipates soft P0S adoption being driven by the increasing use of contactless payments – with volumes expected to rise 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 P0S, based on cost savings achievable from eliminating the need for additional hardware, as well as mobility advantages over contactless POS.
This 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 P0S vendors must look to target micro and mobile merchants; designing solutions that meet their unique needs.