The Evolution of SoftPoS in 2023
By Brad Hyett, CEO of phos
Contactless payments and digital wallets have surged in popularity in recent years. Part of this stems from the digital boom that occurred during COVID-19 but it’s also thanks to the ease of use that contactless offers customers. This has helped accelerate Software Point of Sale or ‘SoftPoS’ adoption amongst SMEs and enterprise retailers, with a total of 6 million merchants taking advantage of the technology in 2022 according to Juniper Research.
SoftPoS or ‘Tap to Pay’ technology – is a software solution that allows vendors to turn their phones or mobile devices into contactless payment points. This has made life for small businesses easier, as they no longer have to fork out large sums of money for traditional Point of Sale (POS) terminals, i.e. card readers, or ‘make do’ with outdated payment software.
In light of Apple’s announcement to allow third-party SoftPoS providers to deploy their technology on iPhone last year, adoption is expected to increase further. By 2027, it’s forecast that there will be up to 34.5 million merchants by 2027 – nearly a 500% increase from today. With more payment giants like Paypal and Venmo announcing they will support contactless transactions through their iOS apps in the months ahead, what else is in store for SoftPoS in 2023?
Apple’s role in market consolidation within SoftPoS
Apple’s move to integrate the technology with iOS devices will expand SoftPoS’ usability across mobile operating systems – significantly boosting the size of the addressable market for vendors. For the first time, Apple users will be able to offer Tap-to-Pay solutions which have traditionally been limited to Android devices only.
This will ultimately bring greater awareness and adoption of SoftPoS as we see increased familiarity with Tap-to-Pay solutions among businesses and consumers alike – as they’re no longer bound by the constraints of the type of phone they use.
While the SoftPoS on iPhone rollout currently only applies to the US market, it’s fair to assume this will expand internationally at some point – aiding the normalisation of ‘Tap to Pay’ solutions en masse in the months and years ahead.
The next wave of solopreneurs
The events of the last year will also continue to have a ripple effect over the next 12 months. For example, we’ve seen the tech industry undergo mass layoffs due to a challenging economic environment and rising global inflation.
With large numbers of highly skilled talent out of work, the phenomenon of solo entrepreneurship is likely to see an uplift – as it did during the pandemic – over the next 12 months. Born in a digital-native environment, individuals from this released workforce can now set up their own businesses and run them on mobile devices, as opposed to legacy infrastructures.
This could prove another sizable opportunity for SoftPoS vendors in the coming year, as we predict to see more small businesses sprout as a result of ongoing redundancies.
The growing importance of SoftPoS orchestration
As the market rapidly develops, so too does the choice and ease of onboarding. Financial institutions and retail technology providers can now use a SoftPoS orchestrator to help them deploy Tap-to-Pay solutions quickly and easily for their merchant customers, instead of having to create their own mobile solutions. This saves them time and money – both crucial resources for any business and especially in a challenging economy.
Partnering with a SoftPoS orchestrator is a cost-effective way of providing mobile payment solutions without having to worry about waiting on new software and security updates. With an orchestrator, this is done automatically – making this a much lighter lift with no requirement for technological know-how.
As SoftPos orchestrators are acquirer agnostic, this means they can help businesses provide a SoftPos solution to their own retail customers, regardless of the existing acquirer that they’re already using.
An additional benefit here is that a wider pool of merchants are able to benefit from the technology – growing the overall size of the SoftPoS market. Orchestrators, then, have the ability to drive wider adoption of the technology globally, reaching a bigger audience of end users and advancing the mobile payments industry in emerging markets across the world.
The increased popularity of digital and contactless payment options has driven exponential growth in the SoftPoS market in recent years. The next 12 months will see the technology enter the mainstream, as Apple starts to allow more third-party SoftPoS providers to deploy their solutions on iPhones.
The timing coincides with several emerging opportunities for the technology, including a potential uptick in the number of solopreneurs and mobile-first businesses. This combination of factors will see more financial institutions and legacy technology players work with SoftPoS orchestrators to bring Tap-to-Pay solutions to market in 2023 if they want to stay ahead of the competition and keep up with ever evolving customer demands.
How to identify the signs that your IT department need restructuring
Eric Lefebvre, Chief Technology Officer at Sovos
For firms to execute transformations and meet their overall vision, it is crucial that their CIOs are able to recognise the signs that their department is in need of some internal change. In the current economic climate, CIOs working to fulfil their organisation’s priorities and meet business goals might hesitate to acknowledge that their IT department needs restructuring, never mind be able to identify the signs.
However, these problems rarely fix themselves and organisational restructuring requires conviction and determination from leadership for it to occur successfully. So, what are some of the key signs that CIOs should look out for?
Struggling to keep up with industry demands
CIOs unsurprisingly are working in an extremely demanding environment at the moment. Meeting these evolving demands is crucial for companies. When demands are not met and not handled properly, this can have a lasting impact on organisational goals and objectives, and even impact the way in which transformations are put into effect.
Depending on the organisation’s structure, the way in which being unable to keep up with demands manifests itself can differ. Despite double digit reductions across the industry, the search for talent across the tech world continues, project costs continue to rise as the cost of labour has increased and schedules have been disrupted by significant attrition. Many companies will also find business costs, such as that of third-party software, are higher than planned and technology debt continues to pile up faster than it can be sunset.
Whilst leadership teams might dedicate their department’s attention on the factors discussed above, they may find that their team will fall short when it comes to timely deliverables and helping maintain your organisation’s tech stack and guide its business transformations. Looking beyond the immediate problems of high costs and considering an internal reshuffle may be the solution for many IT departments.
Internal conflict within the team
Organisational designs with underlying issues can cause constant friction, especially when they go unacknowledged. An IT department that lives in conflict will certainly be reflected in results and less than successful tech transformations. CIOs will find that by adopting an organisational design which works through staffing issues, will better innovate, especially if they can all work together.
Department leads should have a strong understanding of their team’s work environment and guide them through any long-term or potential problems. When an individual is working in a demanding or complex industry, working well with your team shouldn’t be the main impediment to innovation. By acting quickly to eliminate internal conflict, CIOs can better lead and ensure their team’s focus is entirely on producing more optimal outcomes.
Delays are commonplace
When a large amount of your team’s time is spent setting objectives, budgets and timelines for the projects they are working on, it is vital that they are met. When delays are coming from the IT department, they will inevitably hinder the development of any business transformation, especially if it prompts teams to spend excessive amounts of time rearranging budgets and timelines and therefore hindering innovation.
IT departments are a crucial aspect in many different parts of a company’s transformations, so remaining on track when it comes to timelines and innovation is critical to operational plans. If delays have become commonplace in an IT team, and external factors are impacting projects, CIOs should look at restructuring an IT department to solve these issues.
The strongest team relationships do not happen by accident and are the result of good planning, strong leadership and a motivated team. CIOs can ensure this by providing vision and long-term strategy with clear goals and objectives to produce high levels of quality output.
When internal issues are noticed in an IT department, and are noticeably impacting team morale or productivity, this should indicate the need for departmental restructuring. Be that due to an inability to meet market demands, issues with productivity and meeting deadlines or internal conflict, these issues all risk a department’s functionality and an organisation’s ability to achieve its goals. In short, don’t overlook the warning signs!
Top banking trends of 2023 and global outlook of banking and fintech for the year ahead
Author: Professor Marco Mongiello, Pro Vice-Chancellor, The University of Law Business School
You’d be forgiven for assuming that the global outlook for banking and fintech will be dominated by the usual suspects:
Artificial Intelligence – AI plays an increasingly prominent role in banking and fintech by enabling personalised services, fraud detection, predictive analytics, use of chatbots and robo-advisors.
Blockchain and Cryptocurrency – the secure, decentralised and swift system for financial transactions that blockchain has brought to the fore a few years ago, is now becoming ubiquitous. An increasing number of transactions are recorded through blockchains technology, primarily in the cryptocurrency market.
Digital Banking and fintech – accelerated by COVID-19 pandemic, the adoption of digital banking is a trend that will persist as customers have become accustomed to the convenience and efficiency of digital banking. Moreover, fintech enables access to financial services for previously underserved populations in developing countries or less affluent social groups in more affluent societies. This includes mobile banking services, peer-to-peer lending platforms, and microfinance solutions.
Open Banking – another global trend is the use of open APIs (Application Programming Interfaces) that allow third-party developers to build apps to facilitate customers’ access to financial data and services from banks.
Nonetheless, the challenges posed by these rapid changes are reminders that banking, an industry that by its very nature needs to be conservative, risk averse and solid, wobbles on the unchartered grounds of fast and turbulent innovation, where entrepreneurship instead thrives. The underlying rationales of banking and fast digital innovation are not incompatible but do need solid operations and thought-through decision-making to avoid causing catastrophic collapses.
The recent examples of Silicon Valley Bank, Silvergate, FTX and Wirecard are stark reminders that digital entrepreneurship applied to banking doesn’t just bring to customers the visible transformation of valuable new services, but also dents (perhaps as an unexpected consequence) the rationale itself of the role of banks in the global economy. Moreover, the central banks’ ability to contain the effects of single banks’ defaults is no longer a certainty, as experienced just over a decade ago and more recently. The markets’ sentiments are hardly reassured by the commitments of even the most coveted players, such as the European Central Bank, the Federal Reserve, and the President of the United States himself.
Regulators are lagging behind and their attempts to catch up may cause further seismic shocks to the global banking system. For example, another trend that is emerging is one of artificial intelligence decision-centres (i.e., decentralised offices of banks which take autonomous decisions on behalf of investors) outside the most stringent regulatory environments, enabling banks to operate globally more efficiently and more competitively. And we can expect that regulators will close the gap either abruptly, as it is currently happening in China, where private banks are subject to an escalation of regulatory and monitoring restrictions, or more gradually as it is happening in Europe and in the US.
The questions we face, as individual or trade customers of our high street banks, as direct investors or clients of managed funds, are whether banking will become more user-friendly yet, for our daily use but riskier, too, or is it simply becoming more efficient, transparent and also safer.
I’m afraid that the answer is by no means an obvious one. Therefore, caution, level-headed decision- making and critical thinking have never been as important as these days. Whether you are looking after your family savings or growing your pension reserve, the imperative is that you keep updated about the providers of the financial services you rely upon as well as about the general regulations that apply to your financial transactions. This is where, for example, you need to be familiar with your rights in case of cyber fraud, as well as learning how to minimise the risk of becoming a victim thereof. Also, taking additional steps to evaluate the credibility, solidity and reliability of the online provider of that app that was recommended by a trusted friend, may prove a very good move.
Similarly, whether you are the CFO of a medium or large company, or are a sole trader wrestling with your own business’s finances, you need to reflect on what you really want from your bank in the first place. That is before you started to be swayed by the whirlpool of offers of ‘opportunities’ to multiply your financial investments. Chances are that your initial approach to your bank was dictated by either a need for financing your working capital, as per your budget and strategic plans, or to find a safe place for your temporarily idle liquidity. Perhaps you were also after some basic treasury services such as swift payments and debt collection. Maybe some other financial services closely related to your business operations, e.g. factoring. The advice is to give very careful consideration to services that are more remote from your business, because the trend for the next years is that more and more of those will be offered to you. But many new services will disappoint those who, sadly, cannot afford financial mishaps as they look to run and grow their business.
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