{"id":24518,"date":"2025-06-10T06:41:15","date_gmt":"2025-06-10T11:41:15","guid":{"rendered":"https:\/\/reformingretail.com\/?p=24518"},"modified":"2025-06-10T14:16:36","modified_gmt":"2025-06-10T19:16:36","slug":"will-tariffs-finally-bring-softpos-to-market","status":"publish","type":"post","link":"https:\/\/reformingretail.com\/index.php\/2025\/06\/10\/will-tariffs-finally-bring-softpos-to-market\/","title":{"rendered":"Will Tariffs Finally Bring SoftPOS to Market?"},"content":{"rendered":"\n

We are major fans of SoftPOS<\/a>. <\/p>\n\n\n\n

Well, at least the theory<\/em> of SoftPOS. More on that in a bit.<\/p>\n\n\n\n

We find it completely absurd (and anachronistic) that for $100 consumers can acquire an Android tablet with virtually unlimited use cases (internet, bluetooth, native applications, phone, NFC communication, etc.) but merchants are stuck handing over $500 for a heavy, shitty, outdated piece of hardware with the single purpose of taking a card transaction.<\/p>\n\n\n\n

SoftPOS allows anyone to turn that $100 piece of hardware into a payment device, netting not only a $400 savings for the merchant, but also enabling the merchant to continue using all the other features on the device<\/em>.<\/p>\n\n\n\n

Want to surf the internet?<\/p>\n\n\n\n

Check.<\/p>\n\n\n\n

Need to make some calls?<\/p>\n\n\n\n

Check?<\/p>\n\n\n\n

And about a million other use cases that you can\u2019t pursue with that $500 brick sitting on the merchant\u2019s countertop?<\/p>\n\n\n\n

Check.<\/p>\n\n\n\n

The problem with SoftPOS has been cost.<\/p>\n\n\n\n

In our interviews with several SoftPOS providers, the monthly cost to use SoftPOS was often more<\/em> than the cost of buying the $500 piece of hardware.<\/p>\n\n\n\n

For example, the payments industry assumes the actuarial life of a merchant at 30 months.<\/p>\n\n\n\n

If the merchant pays $500 for a terminal, that\u2019s an implied cost of $16.67 per month.<\/p>\n\n\n\n

Many SoftPOS providers are charging MORE than this in their monthly minimums, and that\u2019s excluding the merchant\u2019s cost to procure the hardware itself.<\/p>\n\n\n\n

We understand that innovation isn\u2019t cheap, but in order to justify the same price (or higher) for the innovation you at least need to provide more value.<\/p>\n\n\n\n

So why has SoftPOS been so expensive?<\/p>\n\n\n\n

For starters, there\u2019s a long list of requirements.<\/p>\n\n\n\n

SoftPOS must be PCI compliant. PCI DSS certification takes three to six months and runs $50K-$75K annually. <\/p>\n\n\n\n

Then you need to undertake level 2 and level 3 certifications for EMV approvals<\/a>. <\/p>\n\n\n\n

The level 2 certifications with the card schemes are passed to the acquirer. The acquirer will then integrate and certify the integration with the card schemes as level 3. These certifications can take up to a year and cost $100K with each acquirer, as there\u2019s a whole bunch of \u201churry up and wait\u201d happening, but you need engineers on staff to wait around. <\/p>\n\n\n\n

Nearpay, a SoftPOS provider out of the Middle East, launched in the US earlier this year after completing their certifications. Founded in 2020 in Saudi Arabia, Nearpay powers EMEA operations for Dunkin, Pepsi, and Fedex.<\/p>\n\n\n\n

Dunkin uses Nearpay for tap-to-pay on their kiosks.<\/p>\n\n\n\n

Fedex uses Nearpay to embed payments in their couriers\u2019 phones to eliminate the need for a second payment device.<\/p>\n\n\n\n

Pepsi similarly uses Nearpay so their drivers can take payment in a single device during deliveries to retailers.<\/p>\n\n\n\n

To support these use cases, Nearpay built their SoftPOS solution to be embeddable in other applications; this means softwares can consume Nearpay\u2019s SoftPOS as an API or use the SDK.<\/p>\n\n\n\n

Under the API approach the partner builds their own UI integrated with Nearpay\u2019s backend. Nearpay offers a backend portal for admin purposes if needed and it\u2019s all white labeled. <\/p>\n\n\n\n

With the embedded SDK the software uses Nearpay\u2019s widget that lives within the software\u2019s application. For example, a POS could embed Nearpay\u2019s SDK so when it\u2019s time to pay the Nearpay widget activates and then the software has tap on glass or tap and PIN on glass. The SDK comes with a pre-built UI and is obviously white labeled as well.<\/p>\n\n\n\n

Nearpay invested time to natively support Java, Kotlin, JavaScript, and Swift programming languages and also abstracted their efforts to be compatible with popular development frameworks such as React Native, Ionic, and Flutter. <\/p>\n\n\n\n

\n

SoftPOS is the natural next step in the evolution of card payments. We’ve built a secure, agnostic solution that works across all card-present scenarios and gives our partners the flexibility to accept in-person payments on their terms. Whether embedded into an existing application or launched as a standalone app, our platform is developer-friendly, easy to implement, and designed to accelerate time to market. It delivers best-in-class performance for partners\u2014and seamless convenience for consumers.<\/p>\n\n\n\n

– Ali Mroueh, VP Revenue & Country Manager<\/p>\n<\/blockquote>\n\n\n\n

Regarding devices, we\u2019ve found it very common for SoftPOS providers to support only <\/em>Android devices. This is because the Apple SoftPOS certification process is a relative nightmare. Nearpay has similarly started with Android and Apple is on the roadmap.<\/p>\n\n\n\n

Nearpay does not yet support keyed transactions on their applications as it requires additional security considerations, but they do offer support for PIN on glass, which is common in other geographies as a security measure to ensure the card belongs to its rightful owner.<\/p>\n\n\n\n

Nearpay looks a lot like a gateway on paper, having gone through the certifications a gateway would typically undertake. To get to US market quickly, Nearpay initially certified to North American Bancard (now North), though they can certify to any processor in a matter of weeks if the math pencils. <\/p>\n\n\n\n

\u201cWe are acquirer agnostic, but obviously with the Level 3 certifications we must be judicious about how we spend our time.\u201d<\/p>\n\n\n\n

If you\u2019re not a software company and still see the need to avoid hocking pricey devices, Nearpay has an acquiring arm and deploys SoftPOS for their merchants. <\/p>\n\n\n\n

We\u2019ve seen a lot of use cases for SoftPOS as payments become more mobile, thanks to the proliferation of performant internet and wireless connectivity. Unless the merchant is using a very expensive, purpose-built device for mobile payments, they\u2019re keying in the card and eating the card not present rate, which can be 100 bps higher than the card present rate.<\/p>\n\n\n\n

SoftPOS changes this dynamic, allowing mobile merchants to arbitrage the cost of payments<\/p>\n\n\n\n

A further tailwind?<\/p>\n\n\n\n

Tariffs.<\/p>\n\n\n\n

Nobody knows where these will end, but payment devices are nearly exclusively made in China. It\u2019s possible that the overpriced terminal at $500 will shoot up to $1,500.<\/p>\n\n\n\n

At that point not using SoftPOS becomes criminal (then again, nobody sane will ever accuse merchants of being rational capital allocators). <\/p>\n\n\n\n

Over time, we expect the costs of SoftPOS to continue falling while the costs of payment devices will only rise. <\/p>\n\n\n\n

We wouldn\u2019t be surprised if SoftPOS was entirely free by 2030, candidly, as a mechanism to win payment volume.<\/p>\n","protected":false},"excerpt":{"rendered":"

We are major fans of SoftPOS.  Well, at least the theory of SoftPOS. More on that in a bit. We find it completely absurd (and anachronistic) that for $100 consumers can acquire an Android tablet with virtually unlimited use cases (internet, bluetooth, native applications, phone, NFC communication, etc.) but merchants are stuck handing over $500 […]<\/p>\n","protected":false},"author":1,"featured_media":24579,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"image","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[5,4],"tags":[],"class_list":["post-24518","post","type-post","status-publish","format-image","has-post-thumbnail","hentry","category-solutions","category-merchants","post_format-post-format-image"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/reformingretail.com\/wp-content\/uploads\/2025\/06\/nearpay-1.png?fit=266%2C51&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p81nA2-6ns","_links":{"self":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/24518","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/comments?post=24518"}],"version-history":[{"count":2,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/24518\/revisions"}],"predecessor-version":[{"id":24570,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/posts\/24518\/revisions\/24570"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media\/24579"}],"wp:attachment":[{"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/media?parent=24518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/categories?post=24518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/reformingretail.com\/index.php\/wp-json\/wp\/v2\/tags?post=24518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}