SoftPOS Market Trends

Growth Drivers

• Increasing digital payments and contactless adoption: The primary growth driver for the softPOS market is the accelerated shift of the market towards digital payments. As more and more consumers prefer cashless transactions, businesses are building interest in mobile POS solutions. In September 2023, Tidypay, a member of Visa's strategic partnership program, announced Tap to Phone technology that will allow micro and small businesses in Europe to accept payments on smartphones. The softPOS solution of this initiative becomes accessible to all sectors. With the rise of digital wallets and fintech services, the need for softPOS will be on the rise, helping small businesses and entrepreneurs in remote areas become more accessible to finance. 

• Micro and small business digitization: SoftPOS systems are being adopted by micro and small businesses to cut costs upfront and improve operational efficiency. This trend is reflected in the 61.2% softPOS market share projection for the segment. Using Android-based softPOS, PAX Global Technology Limited and NEC Corporation will launch softPOS solutions for small businesses in Asia Pacific in April 2024, strengthening support for the digital SME transformation. Small businesses can leverage low-cost high-impact technologies to grow their customer base and integrate into digital ecosystems with improved operational transparency and financial management. 

• Expansion of e-commerce and omnichannel retail: Demand for flexible payment solutions accelerates due to the rapid growth of e-commerce, making softPOS more attractive. Retailers are adopting SoftPOS to merge the online and offline channels. In October 2023, Worldline S.A. added omnichannel retail strategies to its softPOS services in Latin America. This expansion shows the expansion driven by e-commerce growth of the demand for versatile payment technologies. With online and brick-and-mortar retail merging increasingly these days, businesses are putting in place technology so that customers have a seamless, uninterrupted experience when they shop, which builds loyalty and sales volume. 

Challenges

• Security and compliance concerns: SoftPOS comes with sensitive financial data and hence the hurdle of making sure secure transactions and adhering to regulatory frameworks. Security of data breaches and fraud demands robust encryption, strict device management, and compliance with the PCI DSS (Payment Card Industry Data Security Standard). Small businesses and emerging softPOS markets, which are often the first adopters, may not have the resources to take the necessary high-level security measures. In addition, there are evolving regulatory requirements across regions, which increase complexity and require continuous updates and compliance monitoring. 

• Infrastructure limitations in emerging markets: However, the digital infrastructure and unreliable internet connectivity in emerging markets hinder the adoption of SoftPOS solutions at a fast pace. The payment process becomes a bottleneck for many small retailers working in rural and underdeveloped regions, as payment processing is not seamless and is not real-time.  Nevertheless, adoption rates remain inconsistent, and issues regarding hardware shortages, network instability, and so on are holding back softPOS market growth in less developed regions.