As SoftPOS solutions are increasing in popularity for both merchants and customers alike, you may have also wanted to take advantage of this technology. This guide will describe the technology in greater detail and provide the various stages of its implementation. The people to whom this guide is especially beneficial are:
Single merchants and SMEs would either want to replace the more traditional payment terminals with a SoftPOS solution or in conjunction with their other payment terminals.
Managers or owners of large SaaS platforms need the SoftPOS solution to complement their omnichannel capabilities.
Before SoftPOS
Payment terminals were the original method of accepting credit card payments. Originally, cards had to be swiped in order to process the transaction. After the silicon integrated circuit was invented, contact EMV payments emerged. This technology was the precursor foundation of the EMV-compliant POS terminals. Later down the line, improvements in NFC technology led to the appearance of contactless payments in the present day.
Point of Sale Systems in SoftPOS
In simple terms, SoftPOS is the software installed on an NFC-enabled device. The device then acts as a contactless payment terminal by utilizing the NFC circuit. Due to their ease of application, these handheld point-of-sale systems are becoming more widespread.
Advantages, Disadvantages, Trends
Hardware
The relatively simple hardware requirements are one of the most tempting characteristics of a SoftPOS solution. There is no need for specialized equipment or dongles. All that is required for contactless payments is simply a phone or tablet.
Account Limitations
Just like other NFC contactless payments, SoftPOS payments are also affected by contactless transaction limits. These are generally concerned with the transaction amount, frequency of payments, or deviations in behavior of either customer or merchant.
Aspects of SoftPOS Implementation
Acquiring Partnership
This phase is where the acquirer and its respective processor are selected. The acquiring bank should be capable of issuing merchant accounts and merchant background verification. Card-present processing and EMV certification of third-party devices should also be supported. Similar to payment gateway solutions, this is one of the first and most important phases to get right.
PIN Encryption
PIN functionality is unlocked on a device by first injecting it with an encryption key. This key allows the PIN to be safely transferred to the processor via encryption. PIN encryption is the way a key is injected and how a PIN is encrypted. The key injection is critical to the security of a SoftPOS solution, so it is important to be familiar with the injection process. The following part of the guide covers the key injection process in more detail.
Selecting an EMV Toolkit
Before a device can use the EMV protocol to process card-present transactions, the EMV kernel must first be certified by the processor. To do so, you must first select an EMV toolset. The choice depends on the processor, as some processors allow any toolkit, while some are more specific in their requirements.
Review Processor Specifications
During this phase, you must acquire the processor specifications and review them to ensure the functionality you want is fully supported. This phase usually also marks the beginning of code development.
Processor Integration
After the previous phase, you can finally begin the integration process. This is where most development work on integrating the gateway with the processor occurs. Bear in mind that any card brand requirement should also be implemented during this phase.
EMV Certification
This is the final phase in the process. You solidify the processor partnership by using the EMV toolkit to certify the EMV logic with the processor. The certification process should be completed in its entirety, as laid out by the test cases from the processor.
EMV Kernel
An EMV kernel is the software coordinating the devices connected to the terminal. For SoftPOS solutions, NFC access has been greatly standardized for the Android OS, meaning the development of the kernel can be left to a third party.
Attestation
Malware installed on devices that accept payments can lead to sensitive cardholder data, such as the PIN or card number, being stolen. This is why attestation logic is so important. It ensures that the device used for accepting payments is secure enough.
Android-based Terminals
Currently, SoftPOS solutions can only run on devices with Android OS. If you want to take advantage of SoftPOS solutions, then your equipment must also support the Android OS. However, that doesn’t mean your hardware options are limited. There are constantly more Android-based terminals appearing on the market. There is also software developed for these terminals that can be easily used for a SoftPOS app.
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