SoftPOS: the phone as a card terminal

The customer holds a card, phone or watch against the merchant's device. The NFC antenna reads the card data, a certified payment app encrypts it and sends it to the acquirer for authorization, the same route a countertop terminal uses. Trust Payments names food trucks, pop-up shops, salons and shops with little counter space as typical users in its guide to SoftPOS.

Without a PIN pad, a payment has to stay within the card's contactless limit, which for the girocard is 50 euros per payment (see contactless payments). Above it, the card asks for a PIN. The PCI Security Standards Council's Mobile Payments on COTS (MPoC) standard covers that case: it combines the older CPoC standard for contactless acceptance on off-the-shelf phones and SPoC for PIN entry, so one device can take both the tap and the PIN.

Apple brought Tap to Pay on iPhone to Germany on June 25, 2024. Adyen, Commerz Globalpay, myPOS, Nexi, SumUp and Viva were the first providers, with Mollie, Payone, Revolut, Stripe and the Sparkassen-Finanzgruppe announced for later that year (NFCW). Apple does not process the payment. The provider's app does, and the provider sets the merchant's fee.

At launch the iPhone accepted Visa and Mastercard cards but not the girocard (heise, in German). S-Payment, the payments company of the savings banks, was the first provider to pass the technical approval of the Deutsche Kreditwirtschaft for girocard acceptance on Tap to Pay on iPhone, and its Sparkasse POS app carries the function for business customers (IT Finanzmagazin, in German).

A countertop terminal is a device the merchant usually rents, with a monthly fee and a contract term, as the overview of card terminals by the IHK Pfalz (in German) shows. With SoftPOS, acceptance is an app the merchant downloads after onboarding. The acquirer still carries the merchant risk and the chargebacks, as the merchant acquiring page explains, and a provider that signs up many small sellers under its own contract works as a payment facilitator.

The iPhone itself also opened up in the EU. Under commitments the European Commission made binding in July 2024, Apple gives third-party wallets free access to the iPhone's NFC chip in the EEA for ten years, and after the market test Apple added terms for SoftPOS-style use (Payments Industry Intelligence). The wallet side is on the Apple Pay in Germany page.

Finance Loop is the meeting place for people who build card acceptance in Germany: acquirers, payment institutions, the payment companies of the savings and cooperative banks, and the fintechs that write SoftPOS apps. It connects the finance, IT and AI communities in Germany, Austria and Switzerland, with events in Frankfurt, Munich, Berlin and Hamburg.

Visa is an event and network partner of Finance Loop. At Capital & Code in Frankfurt, where Finance Loop is a media partner, Mastercard, PayPal and Worldline speak with AllUnity on the future of payments.

SoftPOS (software point of sale) is a certified app that turns a phone or tablet with NFC into a card terminal. It reads contactless cards and wallets and sends the payment to the acquirer like a classic terminal. Apple's version is called Tap to Pay on iPhone, and Android phones run SoftPOS apps from payment providers.

Yes, through the Sparkasse POS app of S-Payment, which received the approval of the Deutsche Kreditwirtschaft for girocard acceptance. Most other providers started with Visa and Mastercard only.

The card data is encrypted inside the certified app before it leaves the phone, and the PCI MPoC standard sets the security rules for such apps. For Tap to Pay on iPhone, Apple says neither the device nor its servers store card numbers.

An mPOS setup pairs a phone with a small external card reader, usually over Bluetooth. SoftPOS needs no reader, because the phone's own NFC antenna reads the card.