POS Machine vs. SoftPOS: Which Payment Solution Is Right for Your Business?

The choice between the traditional POS machine vs. SoftPOS apps is becoming increasingly easy for businesses.

SoftPOS scores big on security, mobility, scaling, and savings in upfront hardware costs. So, naturally, micro and small businesses are already leading SoftPOS adoption with more than 60% market share.

But a traditional POS machine still has some utility in specific industries like restaurants and large retail stores whose operations have a degree of complexity.

So, which option – a POS machine vs. SoftPOS – makes sense for your business?

What Is a POS Machine?

A POS (point-of-sale) machine is a special hardware device for securely accepting payments through cards or contactless payment methods. A POS machine is a solid piece of hardware that is familiar to both the staff at the counter and the customers.

Traditional POS machines come with a built-in card reader, a receipt printer, and a screen for accepting tap-to-pay payments. Businesses have to make an initial investment and also spend on regular maintenance and eventual replacement of the POS machine hardware.

For businesses that are operating with a single checkout counter and do not need to move around a lot, the investment in a POS machine makes sense.

What Is SoftPOS?

In the case of SoftPOS (software point-of-sale), an application is used to turn an NFC-enabled smartphone into a payment terminal.

For SoftPOS there is no need for any additional hardware like a card reader or a dongle. The businesses just have to download and install the SoftPOS app on their phones.

The zero upfront investment in the hardware and per-transaction pricing make SoftPOS a very appealing option. Especially for businesses that need to move from place to place or have to collect payments at the customer’s doorstep, SoftPOS makes accepting payments more efficient.

How Do POS Machines and SoftPOS Compare on Payment Methods?

When we check the POS machine vs. SoftPOS in terms of payment methods, they both support the major payment methods that the customers prefer.

POS Machine Payment Support: In case of card payments, traditional POS machines support cards with chip-and-pin and magnetic stripe swipe payment options. For contactless payments, POS machines let the customers pay with contactless cards and mobile wallets.

SoftPOS Payment Options: SoftPOS is built for contactless or tap payments using NFC. So, it is an excellent option for accepting payments with mobile wallets and contactless cards. If the payment requires PIN entry, then the modern SoftPOS apps use PIN on Glass technology, where the customers can enter their PIN directly on the phone’s touchscreen.

SoftPOS does not have any mechanism to process cards with magnetic stripes or cards that need to be dipped. This limitation is increasingly becoming irrelevant as customers are also making a marked shift toward contactless payments.

POS machine vs. SoftPOS Payment Methods: If your customers regularly use cards that have to be swiped or inserted (for example, in the case of the older adult demographic), then a POS machine is a good fit. Otherwise, a SoftPOS app gives more flexibility with options like an account-to-account transfer.

How Do POS Machines and SoftPOS Compare on Cost?

For most small business owners, the cost difference between a POS machine vs. SoftPOS apps can be a huge factor.

Cost of a Traditional POS Machine: When a business is using a POS machine, they have to make an upfront investment in buying the hardware. This can cost anywhere between $100 for the basic model to $800 for more advanced options. On top of it, there will be money to be spent on regular maintenance and replacement of the hardware in the future.

SoftPOS App Cost: When it comes to cost, SoftPOS needs zero investment in additional hardware, as the cost of the hardware is absorbed by the NFC-enabled smartphone that you already own. So, for small business owners and for merchants who want to operate multiple sales points, cost alone may make SoftPOS the most appealing option.

POS machine vs. SoftPOS cost: SoftPOS apps generally win over POS machines in terms of upfront costs.

Which Option Offers More Flexibility and Mobility?

In the debate between POS machines vs. SoftPOS, the SoftPOS apps outshine POS machines by a mile when the time comes to compare flexibility and mobility.

POS Machine: It’s true, your POS machine is not stuck in one place; we do have the handheld devices that we can carry around on the shop floor or take out to a pop-up. But a POS machine is still an extra piece of hardware that you need to carry, charge, and ensure is working properly every single time.

SoftPOS: When we ask the question, ‘Do I have my phone with me?’ The answer is almost always a yes. It is not something you have to remember to carry around but a natural part of your everyday life. So, with a SoftPOS, your POS terminal goes where you go.

POS machine vs. SoftPOS mobility & flexibility: As modern businesses need to be highly mobile, whether they want to set up a pop-up store at short notice or collect payment after a delivery, SoftPOS gives a genuine advantage.

How Do They Compare on Scalability for Growing Businesses?

Scalability is another area in the choice between a POS machine vs. SoftPOS where SoftPOS gives a genuine edge to businesses.

POS Machine: Every time you want to add a payment counter with a POS machine, you have to order the hardware, wait until it arrives, and configure it. There is also the hardware cost involved in adding every piece of new POS machine.

SoftPOS App: In the case of the SoftPOS app, scaling your payment infra happens in days rather than weeks. You can simply download the SoftPOS app on one more phone and get it added to your account. And if you are expecting a seasonal demand spike, then you just have to change your subscription plan. As there are no lock-ins, SoftPOS gives you the flexibility you need as your sales volume changes.

POS machine vs. SoftPOS scalability: SoftPOS gives a clear scaling advantage to businesses that are growing or have to manage seasonal sales fluctuations. There are definitely scenarios like a restaurant, which needs integrated hardware POS systems to coordinate between the customer service and the kitchen operations. But even such complex businesses can benefit from adding a SoftPOS to their POS ecosystem rather than replacing it.

How Does Security Compare Between POS Machines and SoftPOS?

When you are using a smartphone to accept payments like in the case of SoftPOS, questions about security are natural. Here is how security works for a POS machine vs. SoftPOS app.

Traditional POS Machine: The POS machine itself is a mini-safe where a large part of security comes from the tamper-resistant nature of the machine. It is very difficult to open or modify, and if someone tries to tamper with it, such efforts can be detected. So, the question that decides the security status of a POS machine is, "Is this piece of hardware built securely?"

SoftPOS security: Your phone is a normal consumer device that is used for multiple purposes, not just for accepting payments. So, the onus of security in case of a SoftPOS shifts to ‘Is the SoftPOS app I am using built securely (i.e., does it meet the industry compliance standards for security)?’ Currently, SoftPOS apps are secured with the PCI MPoC (Mobile Payments on Commercial Off-The-Shelf devices) standard with 192 security requirements, all of which have to be met by the SoftPOS provider.

POS machine vs. SoftPOS security: The bottom line is that both POS machines and SoftPOS apps can be genuinely secure, but they work in entirely different compliance categories.

Which Solution Is Right for Your Business Type?

The right SoftPOS app has benefits for businesses of all sizes and types.

Small and Medium Businesses: If you are a small business owner or a freelancer, then SoftPOS is the most cost-effective and operationally efficient choice for you. When your business does not need deep back-office features but has to stay on its feet (whether to deliver food or to set up a pop-up at short notice or needs to manage multiple staff accounts), then SoftPOS gives you a clear advantage.

Large Businesses and Entities with Complex Operations: For the longest time, traditional POS machines have been the default for businesses with complex needs - like intensive inventory management and coordination between multiple operations. In such cases, SoftPOS’s value lies not in becoming a replacement for the POS machine but in becoming an addition to the POS system. It can make it easier for the business to become more mobile and scalable while still relying on the hardware POS setup at the shopfront.

How Does BrandPOS Turn a Smartphone Into a POS Terminal?

BrandPOS is a true SoftPOS app that can turn your smartphone into a contactless payments terminal. There is no hardware to be bought. A merchant can download the BrandPOS app, register their business, complete the verification process online, and start accepting payments through their phone. The transactions are secured with industry-standard compliances for protecting the payment data.

If you add a new member to the sales team or want to set up a pop-up store, you just have to download the BrandPOS app on another phone. And you can manage multiple sales accounts through a single BrandPOS dashboard in real-time.

BrandPOS's approach removes a lot of barriers - of cost, of time, and of scaling for small businesses.