By Brad Hyett, CEO at phos
Software Point of Sale (SoftPoS) technology has quickly gained the attention of growth-driven businesses by having the capability to transform any NFC-enabled device into a contactless payment terminal. Today, it stands poised to redefine payment acceptance. As the new year approaches and analysts and experts expect transaction values to skyrocket, the financial sector faces a pressing question: are legacy systems equipped to keep pace with this unprecedented shift?
While the technology promises remarkable potential for efficiency and growth, it also risks widening the gap between tech-forward organisations and those relying on outdated systems. This raises a critical question: are we ushering in a new era of payments innovation, or setting the stage for resistance against the rapid pace of technological change?
Why is traditional PayTech not sufficient anymore?
Businesses are keen to reduce their costs to be able to maximise profits. Traditional payment technology does not align with this goal because it requires highly specialised hardware that is not only expensive to install but also to maintain. Today’s consumers are rapidly adopting new payment methods and to keep up with these changing behaviours, firms need technology that can be updated quickly and costlessly.
It is also worth noting the importance of data privacy and security above all else. In fact, 94% of organisations believe that their customers wouldn’t even buy from them if their data was not properly protected. Conventional payment methods often don’t come with features like encryption and tokenisation, which exposes consumers to cybersecurity risks and can demotivate them from completing a purchase.
Finally, we can not ignore the fact that we live in a data-driven world. By using long-standing payment methods, firms are missing out on a wealth of information that can be used to generate consumer insights. Novel PayTech can plug this gap by generating information on consumer profiles, spending patterns, and geographic trends.
Is the new PayTech fit compatible with the existing business ecosystem?
SoftPoS systems can support a wide range of functions, including inventory management and customer loyalty programs. By doing so, it creates a seamless and efficient ecosystem for companies, enabling payment acceptance to complement and strengthen existing distribution channels. These capabilities are likely to push more vendors towards adopting the innovative technology.
Ultimately, the goal is to build a network of interconnected tools that not only enhance operations but also analyse and derive valuable insights from consumer data.
Will businesses be open to new payment technologies?
As leaders understand the full potential and benefits of novel PayTech like SoftPoS and major financial institutions adopt it, this payment technology will see exponential growth. It will mark a significant departure from traditional payment methods like pin-and-chip machines, and be influential in driving contactless payment adoption.
However, this transition is also likely to heighten tensions between early adopters and traditionalists as it widens the gap between the two. While pioneers will be able to streamline operations, reduce manual labour, and improve transaction speeds, conventionalists will struggle with slower transactions, higher error rates, and inefficient reconciliation processes.
What can be done to bridge the gap?
Since newer payment technologies like SoftPoS are undoubtedly better in the long run, the best way to reduce the disparity between traditional and modern vendors without compromising on growth will be education. Technology providers must take steps to inform establishments of the merits of payment innovations and teach them to use the technology. There are also advantages in sharing the stories of firms that have successfully onboarded technologies like SoftPoS, since they can motivate other enterprises to take the plunge. Finally, intuitive, user-friendly support guides will be immensely helpful for merchants who have taken the first step and are willing to embrace newer technologies.
Going forward, it’s essential for enterprises to acknowledge that consumers value seamless, hassle-free purchase experiences. Technologies like SoftPoS enable companies to meet these expectations efficiently and cost-effectively. This positions them for success in a rapidly digitising marketplace.
While novel payment technologies may initially seem to widen the gap, there is no doubt that, in the long term, it is a significant leap forward. It offers cost-effective growth opportunities for both tech-forward businesses and traditional firms. With more education and training, adopting this technology will become more straightforward, and in 2025 and beyond, merchants should seize the opportunity to embrace it and transform their ecosystems.
