Digitizing contactless payment acceptance

20 - 04 - 2021

Use cases and Market news By Houssem Assadi


Digitizing contactless payment acceptance: a key ingredient for renewing the in-store shopping experience

SoftPos (Software POS) technology has been gaining momentum since 2020 and is subject of numerous initiatives and pilots around the world. This technology is supported by the card industry via the PCI organisation – which has published a dedicated specification – and by the major payment networks such as Visa and Mastercard.

The promise of this new technology was stated as follows from the outset: it will now be possible to turn any NFC-enabled Android smartphone into a contactless payment acceptance terminal. This is a great opportunity to equip the tens of millions of micro and small merchants around the world who currently lack easy-to-use and affordable electronic payment acceptance solutions. This challenge of equipping small merchants has been for example highlighted by Mastercard since April 2020.

Dejamobile is engaged with the first acquiring customers who have adopted its ReadyToTap™ Payment for Merchants solution , certified by Visa and Mastercard, to conduct pilots. In particular, the pilot with Crédit Agricole aims to test the solution with independent merchants, in a BYOD (“Bring Your Own Device”) approach: the merchant can download the “Encaiss’Phone” application on their own compatible Android smartphone and start accepting contactless payments immediately.

However, we believe that SoftPos technology is not limited to the small merchant segment and the BYOD use case. This is because the technology brings new properties, namely ubiquity and extreme flexibility, to the contactless payment acceptance feature. Before the emergence of this technology, the acceptance of contactless payments was constrained by the use of a dedicated device – the POS terminal – which had to be physically integrated within a cash register environment. Now, with the SoftPos technology, contactless payment acceptance can be deployed without any hardware constraint everywhere in physical shops, at the traditional checkout line, on the professional tablet in the hands of the sales staff or into the “Self Checkout” kiosks, to name a few options among many.

This new technology makes new in-store use cases possible, in line with the trends observed in the retail sector recently:

    • The emergence of new formats and new channels:
      • Smaller proximity shops (vs. the “Hypermarket” format) and new formats for larger shops, with a trend towards the creation of autonomous universes (departments) within those large supermarkets having each their own shopping and checkout experiences.
      • The development of Drive and Click&Collect practices more generally.
    • The emergence of “connected shops” and automated check-out kiosks to make the checkout process smoother and faster. According to a study conducted by 451 Research for Adyen, “7 out of 10 consumers have chosen to leave a shop and abandon their purchases to avoid waiting in line, which equates to $370 billion in lost revenue annually”.
    • Certain types of retailers (luxury goods, consumer electronics, etc.) are focusing their value proposition on the support provided by an advisor/salesperson in store in order to help consumers make their choices; the final objective being the maximization of the conversion rate.

There is a common factor in these developments and use cases, namely the implementation of a seamless and always secure payment experience for consumers and merchants.

According to the 451 Research study for Adyen quoted above, “In the last six months, one in two consumers have not been able to use their preferred payment method in-store, forcing them to abandon their purchase“. This illustrates the importance of introducing consumers’ preferred payment methods, and contactless is now one of them, into all physical stores and into all shopping journeys within these stores.

In this context, the digitization of contactless payment acceptance, thanks to the “SoftPos” technology, represents an appropriate response. In its purely software form, contactless payment acceptance can be deployed on multiple form factors as varied as a smartphone, a tablet, a professional handheld terminal or a self-checkout kiosk.

For a more in-depth look at these different topics, we invite you to read the white paper published by Dejamobile in December 2020 on this topic.


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