The Shift Toward Soft POS: How Tap-to-Pay Technology Is Redefining Retail and Field Commerce

Introduction

The payments industry is undergoing a major transformation as Soft POS (also known as “Tap-to-Pay on mobile”) moves from a niche experiment to a mainstream acceptance method across retail, service, and field-based businesses.

Soft POS allows merchants to accept contactless card payments using a standard smartphone, no dedicated payment terminal, dongle, or hardware required. As contactless adoption accelerates globally and merchants seek lightweight, flexible solutions, Soft POS is emerging as a viable alternative to traditional POS hardware.

The implications are significant. Soft POS reduces hardware costs, expands acceptance capabilities, and opens new opportunities for small merchants, mobile businesses, and even enterprise retailers looking to support distributed teams.

This article explores why Soft POS adoption is accelerating, how the technology works, and what it means for merchants, ISOs, and payment providers.

1. What Is Soft POS?

Soft POS is a software-based payment acceptance solution that turns a merchant’s smartphone or tablet into a secure, certified payment terminal.Merchants download a compliant app, onboard their account, and instantly accept:

• Contactless credit cards

• Contactless debit cards

• Mobile wallets (Apple Pay, Google Pay, Samsung Pay)

• Wearables

  
  

Soft POS relies on NFC technology embedded in most modern smartphones. With proper certification, the device meets PCI and card-network requirements for secure contactless acceptance.

Soft POS is not a replacement for all hardware, but it is already reshaping the economics of payments.

2. Why Soft POS Adoption Is Accelerating

A. Lower Hardware Costs

Traditional POS terminals cost hundreds of dollars per unit.Soft POS requires no hardware beyond a smartphone.

This is especially beneficial for:

• Small retailers

• Seasonal sellers

• Service providers

• Delivery operations

• Field technicians

The total cost of ownership drops dramatically.

B. Faster Merchant Onboarding

Merchants can activate acceptance capabilities in minutes, not days or weeks.This is ideal for:

• Gig workers

• Pop-up shops

• New ecommerce brands launching in-person activations

• High-velocity onboarding models

  
  

Faster onboarding means faster revenue.

C. Support for Distributed or Mobile Teams

Large enterprises are adopting Soft POS for:

• Curbside pickup

• Queue busting

• In-aisle checkout

• Delivery agents

• Event staff

  
  

It reduces bottlenecks and improves customer experience.

D. Global Regulation and Contactless Growth

Contactless transactions now represent a majority of card-present volume in many regions.Soft POS aligns perfectly with consumer expectations for tap-to-pay everywhere.

3. How Soft POS Works Behind the Scenes

The technology behind Soft POS must meet strict security requirements. Key components include:

A. NFC Reader Emulation

The app uses the phone’s NFC chip to communicate with the customer’s card or wallet.

B. PCI Compliance (CPOC / MPoC)

The PCI Council now supports software-based contactless acceptance under frameworks like:

• CPOC (Contactless Payments on COTS Devices)

• MPoC (Mobile Payments on COTS Devices)

  
  

Soft POS providers must meet these standards.

C. Encryption and Secure Execution

Sensitive data is encrypted immediately and never stored.

D. Tokenization

Most Soft POS transactions use network tokenization, enabling:

• Higher security

• Fewer declines

• Better approval rates

  
  

E. Acquirer-Level Certification

The processor must certify that the Soft POS app meets all card network rules for:

• Visa Tap to Phone

• Mastercard Tap on Phone

• Amex and Discover equivalents

  
  

The result is a secure method of card acceptance without specialized hardware.

4. Use Cases Where Soft POS Outperforms Hardware

A. Field Service and Delivery Businesses

Technicians, delivery drivers, and mobile workers can accept payments without returning to a terminal.

B. Pop-Up Retail and Events

Brands launching experiential activations avoid purchasing multiple terminals for short-term use.

C. Multi-Location Chains

Retailers can add “burst capacity” during peak times without buying additional checkout stations.

D. Restaurants and Hospitality

Soft POS enables:

• Tableside payments

• Outdoor patio payments

• Line busting during rush periods

  
  

E. Emerging Market Merchants

In many countries, smartphone penetration is far higher than POS terminal penetration.Soft POS unlocks acceptance for millions of small merchants.

5. Soft POS Limitations Merchants Should Understand

While Soft POS offers compelling advantages, it is not perfect for every scenario.

A. No Magstripe or Chip Insert

Soft POS supports only contactless payments. Merchants with high EMV chip-insert volume may still require hardware terminals.

B. Device Compatibility Variability

Not all Android devices support NFC Tap-to-Pay.iOS Soft POS is improving rapidly, but still has ecosystem restrictions.

C. High-Throughput Environments May Prefer Hardware

For high-volume grocery or big-box retail, dedicated terminals remain more efficient.

D. Environmental Constraints

Cold temperatures, wet conditions, or heavily gloved staff can reduce tap reliability.

E. Some Industries Require Stronger Hardware

Examples:

• Unattended retail

• Vending

• Fuel

• ATM-like environments

  
  

Soft POS is best positioned as a complement, not a universal replacement.

6. The Business Model Impact for ISOs and Providers

Soft POS introduces important shifts in how payment providers monetize acceptance.

A. Lower Upfront Costs but Higher Margin on Software

ISOs and PayFacs can package Soft POS as a subscription add-on instead of selling hardware.

B. Faster Sales Cycles

Merchants can begin processing immediately, reducing churn before activation.

C. New Merchant Segments

Soft POS appeals to micro-merchants and field-based businesses traditionally expensive to onboard.

D. Embedded Payments Opportunities

ISVs can bundle Soft POS into their mobile apps, turning industry-specific tools into acceptance platforms.

Soft POS does not eliminate hardware revenue, but it creates a more diversified, subscription-focused revenue model.

7. The Future of Soft POS

Several trends suggest Soft POS will continue scaling rapidly over the next five years:

A. Full iOS Support

As Apple expands Tap to Pay availability globally, merchant adoption will rise.

B. MPoC Standardization

Uniform PCI standards will make certification easier for providers and more stable for merchants.

C. Deeper Integration Into Industry Apps

Vertical SaaS providers will increasingly embed Soft POS into:

• Delivery apps

• Booking platforms

• Field service solutions

• Retail mobile apps

  
  

D. Multi-Acquirer Support

Soft POS apps will begin offering routing logic similar to orchestration platforms.

E. Convergence with QR, A2A, and Wallet Payments

Soft POS devices may become terminals for:

• Account-to-account payments

• Open banking

• Regional wallets

• Real-time payment rails

  
  

Soft POS is likely to become a universally accepted layer.

Conclusion

Soft POS represents one of the most important shifts in card-present payments since the introduction of EMV. By removing hardware barriers and enabling fast, flexible acceptance on standard smartphones, Soft POS expands payment capabilities for merchants of all sizes.

For ecommerce brands exploring physical retail, for field-based service providers accepting payments on the go, and for retailers seeking scalable in-store solutions, Soft POS offers a modern alternative to traditional POS hardware.

At Tailored Commerce Group, we help merchants, ISVs, and payment providers evaluate Soft POS solutions, integrate mobile acceptance capabilities, and modernize their payment infrastructure for a more flexible future.