Your Smartphone Is Now A Point-Of-Sale Terminal

Earlier in my career I designed and coded Point-Of-Sale (POS) systems for British retail companies. If you bought your groceries in Tesco or electronic devices in Dixons in the 90s then I probably wrote the code that processed your credit card.

I wrote about this experience last month in Planet Mainframe where I was celebrating the long life of the COBOL programming language – now 65 years old. I can’t really remember how to code using it now, but many companies are still using COBOL and they often need help with the maintenance of old systems.

I was thinking about this earlier work experience when I saw a case study on the IBA Group website for tapXphone – this allows any NFC-enabled smartphone to function as a POS terminal. Most smartphones have had this feature for several years now, so unless you still have a very old phone your device can already function as a POS terminal.

The use of cash is a steep decline now. This causes particular problems for small companies that don’t want to pay the cost associated with developing and managing POS terminals. Even companies that have traditionally paid for POS systems have realized that they don’t need to – this infrastructure is freely available in the marketplace.

Look at the UK for a good example. Only 1 in 5 payments are made using cash. This is even lower in Denmark where it is more like 1 in 10 payments made using cash. In this environment it starts becoming common for some businesses to go cash-free.

There is a societal argument that governments need to maintain access to cash. Many low income families rely on cash and so there is still an important role for cash – ATM networks are still needed. However, for companies looking at most transactions there is a strong move away from cash to the use of cards, phones, and contactless payments.

So it is clear that services like tapXphone will become more important than ever before. Companies need to offer this flexibility for payments. This may apply to an entire rail system allowing flexible contactless payments or it could apply to a small store that wants to offer flexible payment services without needing to pay expensive fees for a POS.

This information from Shopify shows exactly how much POS systems still cost. You might need to make an initial payment of up to $2,000 as an installation cost and then up to $1,000 just to use the device. For a small business, $3,000 is a lot of cash – especially when this service can be available at a much lower cost, or free.

This is just one more example of the development of platform technologies and how this is enabling innovation in small businesses. Back in the 90s you needed an entire software development team building POS software. Now you can buy and rent terminals for a relatively small amount of cash, but in the emerging business environment a company using a POS platform to accept payments will probably pay nothing for the POS device itself.

Your smartphone may be all you need to accept payments for your business. Take a look at the tapXphone case study and information here.

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