Bit by bit, economies are reopening.
But business as usual will be anything but traditional – even with face-to-face commerce – due to the great digital shift we’re seeing now, and will continue to see after the pandemic. The days of consumers at the local coffee shop or retailer queuing up the register, inserting cards and punching in PINs are likely in the rearview mirror.
The rise of contactless payments is being driven by, and in turn is also driving a pivot away from, hardware – specifically the dedicated terminals at checkout – and toward SoftPOS.
At a high level, SoftPOS – short for software point of sale – lets merchants take contactless payments across their own mobile devices and tablets.
In an interview with Karen Webster, Mary Kay Bowman, head of global seller product and solutions at Visa, said that contactless payments offer consumers peace of mind – and also trim costs and boost revenues for merchants, especially those in emerging markets. That allows flexibility in not just how merchants take transactions, but where – across cards and digital wallets. SoftPOS marks a sea change from the hardware-bound, hard-wired nature of checkout, and from dedicated POS terminals registered and linked to dongles.
Conventional wisdom might hold that the pivot toward SoftPOS has been swift amid the seismic move toward tap to pay, NFC, QR codes and digital wallets.
But as Bowman noted, “it’s like anything else when people describe it as an ‘overnight sensation.’ It’s just that generally people – and especially us [at Visa] – have been working on it over [many, many] nights.”
“Anytime you have less hardware, payments are more mobile,” said Bowman, adding that SoftPOS also has the advantage of being automatically updated, which means merchants don’t have to scramble to update systems and possibly interrupt business momentum in the process.
There is the urgency to take contactless payments on the spot, and even on the go – and it shows up in the data.
As Visa noted in a recent “Back to Business” study that surveyed more than 2,000 SMBs and 4,500 consumers globally, as many as 63 percent of consumers would switch to a new business that installed contactless payment options – and for half of consumers, contactless payments are among the most important safety measures SMBs can embrace.
And the SMBs, perhaps not surprisingly, have taken notice. Bowman noted to Webster that in just the past year, there has been a marked increase on the part of merchants to deploy Visa’s Tap-to-Phone solutions. In terms of volume, Visa has doubled the number of tap-to-phone agreements in place, in 16 markets at present.
Visa has also partnered with governments in more than 50 countries to raise contactless transaction limits. In the wake of those actions – and through the Visa Easy Payments Service, which allows transactions to be processed with the need for CVMs (or PINs or signatures), the payments giant has seen an additional 29 million transactions on a weekly basis across Europe.
The growing availability of SoftPOS, said Bowman, has helped level the playing field for merchants vying to grab a piece of the great digital shift, even as standards are being worked out. Visa said late last month that it has added to its investment in MagicCube, which offers a software trusted execution environment platform (recognized by EMVCo) and enables transacting via PIN on Glass.
Leveling The Playing Field
“If you think about the most established businesses, they’ve done a good job pivoting for their customers during an unusual time,” Bowman told Webster.
But increasingly, SMBs, such as restaurants, have added new features like pickup and remote ordering. And retailers across any range of settings are finding value in offering buy online, pickup in store (BOPIS) offerings. All of these new functionalities require that business owners think differently about their checkout processes. And for consumers, there’s a sense of control over the POS as they pick and choose the payment options with which they are most comfortable.
With a nod toward the several programs targeting small businesses globally, said Bowman, and a push to make mobile point of sale a traditional and trusted way of transacting, “there are some interesting things happening in underserved markets, where banking services for small or mobile sellers have not been accessible.”
SMBs (and even microbusinesses) are getting creative about how (and where) they engage with customers and quell anxieties about physical interactions.
That reimaging is particularly evident in the services industry as businesses open up, noted Bowman – where, say, home remodeling firms or salons now leverage seamless electronic payments (rather than relying on cash or checks) to accelerate cash flow, taking payments at different points of interaction (rather than just at the end of the sale).
SoftPOS, she said, “allows sellers to think about their customers and change their checkout flows in the physical world … it allows merchants, large and small, to reimagine workloads and commerce flows within their particular environments.”