The digital form of Point of Sale (POS) systems is called Digital POS. There is also a software-only subtype called Virtual POS. After the use of Mobile POS (mPOS) and Virtual POS became widespread, the term digital POS came to refer to these two products.
So will physical POS terminals transform into digital POS?
This is inevitable. My prediction is that within the next 10 years we will no longer see physical POS devices in stores. We are heading toward an era in which payment systems integrated with digital POS become part of our daily lives, and the concept of a cash register all but disappears.
SoftPOS
Since this article was first published, one of the most important developments in the digital POS space has been SoftPOS. SoftPOS allows an NFC-enabled smartphone or tablet to turn into a POS that accepts contactless cards without needing any additional hardware. The cardholder makes a payment by tapping their card or phone against the merchant's phone.
Types of digital POS
- Virtual POS: A software-only POS that accepts payments made over the internet.
- mPOS: A mobile POS that works with a small card reader connected to a phone.
- SoftPOS: A POS in which the phone itself is used as the card reader.
- Android POS: Smart POS devices that can run the merchant's other applications alongside the payment application.
Benefits
Digital POS solutions lower the cost of accepting cards, especially for small businesses and businesses without a fixed point of sale. The setup process is short, and a business can start accepting payments using its own device.
Security
In solutions such as SoftPOS, security is provided through PCI-compliant software and additional server-side controls. For transactions that require PIN entry, the PIN is captured securely on the phone and encrypted.
