SoftPOS
What Is SoftPOS? Definition and How It Works
Definition
SoftPOS (Software Point of Sale) is a technology that enables a merchant to accept contactless card and digital wallet payments on a standard commercial off-the-shelf (COTS) device, typically a smartphone or tablet, using only software and the device's built-in NFC chip, without requiring dedicated payment terminal hardware. SoftPOS is also referred to as Tap on Phone or Tap to Pay.
How it works
SoftPOS transforms an NFC-enabled smartphone or tablet into a certified payment acceptance device. The merchant downloads a certified payment application, which handles contactless card reading, encryption of cardholder data, and communication with the payment processor. The consumer taps their contactless card or digital wallet to the merchant's device; the NFC chip reads the card data; the application processes the transaction and returns an authorisation response.
Security is governed by the PCI Security Standards Council's MPoC (Mobile Payments on Commercial Off-the-Shelf) standard, which defines how sensitive payment operations, including, optionally, PIN entry, can be performed securely on a consumer-grade device without tamper-proof hardware. Implementations relying solely on contactless tap (under the contactless floor limit) do not require PIN; those above the floor limit use PIN on Glass, where a PIN entry screen runs in a secured execution environment on the device.
From a transaction flow perspective, SoftPOS transactions are card-present EMV transactions and qualify for card-present interchange rates, a material cost advantage over card-not-present transactions for merchants that have historically processed mobile sales as CNP due to lack of a terminal. Authorisation, capture, and settlement follow standard EMV flow through the processor.
Distribution is via the app stores or mobile device management, enabling instant deployment: a new merchant can begin accepting payments within minutes of downloading the application, with no hardware procurement or configuration delay.
Why it matters
SoftPOS eliminates the hardware cost and deployment friction that has historically excluded micro-merchants, mobile service providers, and pop-up retailers from card acceptance. A tradesperson, market stallholder, or food truck operator who previously handled only cash can accept contactless payments with no upfront hardware investment.
For acquirers and payment facilitators, SoftPOS dramatically expands the addressable merchant market. The long tail of micro-merchants, businesses processing low volumes, has historically been unprofitable to serve given the cost of hardware provisioning and support. SoftPOS changes the economics: onboarding a micro-merchant is a software activation, not a hardware shipment.
For enterprise retailers, SoftPOS complements fixed terminal deployments: staff with SoftPOS-enabled devices can assist customers on the shop floor, reduce queue length at peak times, or accept payments at pop-up locations without additional hardware investment. Total cost of ownership of device deployments decreases when existing staff smartphones double as payment terminals.
With PXP
PXP offers SoftPOS through TAP+, turning a standard Android device into a contactless payment terminal with the same orchestration as its other channels. Talk to our team about how PXP can support your in-store and SoftPOS acceptance.
Frequently asked questions
Is SoftPOS secure for accepting card payments?
Yes. SoftPOS implementations must comply with PCI SSC's MPoC standard, which defines security requirements for card acceptance on consumer-grade hardware. The payment application runs sensitive operations in a secured execution environment, card data is encrypted before leaving the NFC layer, and the application is subject to regular security assessments. SoftPOS transactions carry the same EMV security profile as hardware terminal transactions.
What is the interchange rate for SoftPOS transactions?
SoftPOS transactions qualify as card-present EMV transactions and receive card-present interchange rates, which are typically significantly lower than card-not-present rates. For merchants who have historically accepted mobile payments via manual entry or card-not-present flows, migrating to SoftPOS can produce a material reduction in interchange costs.
What is the difference between SoftPOS and a traditional mPOS terminal?
A traditional mPOS (mobile point of sale) solution uses a hardware card reader, either a chip-and-PIN device or a magstripe reader, that connects to a smartphone via Bluetooth or the headphone jack. SoftPOS requires no additional hardware at all: it uses only the smartphone's built-in NFC chip. This eliminates hardware procurement, provisioning, and replacement costs entirely.
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