SoftPOS technology is turning ordinary smartphones into payment terminals. For UK small businesses, that means lower costs, faster setup, and one less piece of hardware to worry about.
Imagine accepting a contactless card payment with nothing but the phone already in your pocket. No card reader. No dock. No waiting three to five business days for hardware to arrive. Just a tap, a confirmation, and the money is on its way to you.
This is not a concept being tested in a lab somewhere. It is happening right now, on high streets and market stalls and construction sites across the United Kingdom. The technology is called softPOS, and it is quietly dismantling one of the oldest assumptions in retail: that taking card payments requires a dedicated piece of hardware.
SoftPOS stands for software point-of-sale. In plain terms, it is an application that transforms a standard Android smartphone or tablet into a fully functional, contactless payment terminal. The customer taps their card, phone, or wearable against your device, and the NFC (near-field communication) chip built into your handset does the rest.
No dongle. No Bluetooth pairing. No monthly rental on a terminal you barely use in the quiet months.
The underlying technology has existed for years, but two things changed to make it viable at scale. First, Visa and Mastercard updated their security frameworks to certify softPOS solutions as compliant with their standards. Second, in 2022 Apple opened its NFC chip to third-party developers, and Google followed suit on Android, which already had a more open ecosystem. That combination unlocked the market. Adoption accelerated fast.
Globally, the softPOS market was valued at approximately $12 billion in 2023 and is projected to grow at a compound annual rate of over 20% through 2030, according to Grand View Research. The UK, with its exceptionally high rate of contactless card usage (over 90% of all card transactions in 2023 were contactless, per UK Finance), is one of the most natural environments in the world for this technology to thrive.
Let us be direct about money, because that is almost always what matters most to a small business owner.
A traditional card machine in the UK typically costs between £15 and £50 per month to rent, or upwards of £150 to £300 to purchase outright. Add transaction fees of 1.5% to 2.5% on top, and you begin to see why many micro-businesses and sole traders either avoid card payments entirely or begrudgingly accept them as a cost of doing business.
SoftPOS changes that maths considerably. Solutions like Teya Go allow you to start accepting payments on your existing Android smartphone with no hardware cost whatsoever. You are simply downloading an application and connecting it to your merchant account. The transaction fees remain, but the fixed overhead associated with terminal rental largely disappears.
For a market trader who takes £3,000 a month in card payments and currently rents a terminal at £25 per month, eliminating that rental fee saves £300 per year before accounting for any setup costs. It is not transformative on its own, but compounded across a business with multiple payment touchpoints, it adds up.
The businesses moving fastest towards tap-to-phone solutions tend to share a common characteristic: they operate in environments where a fixed or even portable card terminal is a nuisance rather than a convenience.
Consider a mobile hairdresser visiting clients at home. A plumber finishing a job at 7pm. A food vendor at a festival. A personal trainer collecting payment poolside. For all of these people, carrying a separate card reader alongside their phone has always felt slightly absurd. SoftPOS removes that friction entirely.
But adoption is not limited to micro-businesses. Larger retailers are piloting softPOS for queue-busting, allowing shop floor staff to take payments anywhere in the store rather than directing customers to a fixed till point. Hospitality businesses are using it for tableside payments without investing in expensive handheld terminals. Delivery drivers are using it for cash-on-delivery alternatives.
In the Netherlands and Sweden, softPOS has already achieved meaningful market penetration among SMEs. The UK is approximately 18 to 24 months behind those markets in adoption, which means the window to gain a competitive advantage by moving early is still open.
This is the right question to ask. When hardware terminals were the standard, the physical device itself was part of the security architecture. Removing that device raises legitimate concerns.
The reassuring answer is that the major card schemes have addressed this rigorously. Visa's Tap to Phone programme and Mastercard's Cloud-Based Acceptance framework both require softPOS solutions to meet PCI-DSS standards, the same standard that governs traditional terminals. Sensitive card data is encrypted at the point of capture and never stored on the device itself. The processing happens in a secure cloud environment.
The Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) in the UK have both been broadly supportive of softPOS innovation, viewing it as a mechanism to increase payment acceptance among small merchants and reduce financial exclusion. Neither body has flagged systemic security concerns with certified solutions.
The practical caveat: not all softPOS applications are created equal. You should verify that any solution you use carries the relevant certification from Visa, Mastercard, or both. Reputable providers such as Teya will have this documentation readily available.
Honesty requires acknowledging what softPOS cannot yet do.
First, chip-and-PIN transactions are not supported on most softPOS implementations. You can accept contactless payments up to the standard limits (currently £100 per transaction in the UK, as set following the 2021 increase from £45), but anything requiring a PIN entry or a chip dip still needs dedicated hardware. For businesses with a significant proportion of higher-value or older customers who prefer chip-and-PIN, this is a genuine limitation.
Second, Android is the primary platform. Apple only opened its NFC chip in specific, limited ways, and while Apple's own Tap to Pay on iPhone exists for certain payment providers in the US and select other markets, the UK rollout has been slower. If your business runs on iPhones, your softPOS options remain more restricted as of mid-2025.
Third, a smartphone is a smartphone. It can run low on battery. It can receive a call mid-transaction. It does not have the focused reliability of a device built exclusively for payment processing. These are manageable challenges, not dealbreakers, but they are worth factoring into your decision.
The payment landscape in the UK is shifting in a direction that favours flexibility and lower barriers to entry. SoftPOS is part of a broader movement, alongside open banking payments, digital wallets, and account-to-account transfers, that is progressively reducing the dominance of traditional payment hardware.
For small and medium-sized businesses, the practical implications are these:
You can start accepting card payments today, without ordering hardware. If you have an Android smartphone and a legitimate business, a softPOS solution can be operational within the hour. That is a genuinely remarkable change from the world of five years ago.
Your cost structure can become more variable and less fixed. Moving away from terminal rental means your payment costs scale more naturally with your revenue. In lean months, you pay less. In busy months, you pay more. That alignment is healthy for cash flow.
You gain flexibility to take payments anywhere. Events, pop-ups, client sites, deliveries, home visits. Wherever your business takes you, payment acceptance can follow without any additional equipment.
You should still evaluate whether a dedicated terminal makes sense alongside a softPOS solution. For businesses with a fixed premises, high transaction volumes, or a need for chip-and-PIN acceptance, a hybrid approach, using softPOS for mobile scenarios and a traditional or smart terminal for the counter, is often the most pragmatic answer.
Tap-to-phone is not just a cost-saving tool. It is a signal of where the entire payments industry is heading: towards software-defined infrastructure, away from hardware dependency, and towards a world where the barrier between a business idea and the ability to get paid for it is as low as it can possibly be.
The UK already leads Europe in contactless adoption. It has a sophisticated regulatory environment that is generally supportive of payment innovation. And it has a large, underserved population of micro-businesses and sole traders who have historically been poorly catered to by the traditional banking and payments establishment.
SoftPOS addresses a real gap. The technology is mature, the certification frameworks are in place, and the commercial case is clear. If you have not yet explored whether tap-to-phone makes sense for your business, the question is becoming harder to avoid.
Klipy UK helps small and medium-sized businesses navigate payment technology decisions. If you are weighing up softPOS against traditional terminals, our cost comparison tools and independent guidance are a good place to start.
Sources
Disclaimer
The views and information shared in this post are for educational and informational purposes only and do not constitute financial, legal, or professional advice. While every effort is made to ensure accuracy, Klipy UK Limited accepts no liability for decisions made based on this content. Payment processing rates, regulations, and product features referenced are subject to change. Klipy UK is an authorised seller of Teya payment solutions. Where third-party sources are cited, links are provided for reference; Klipy UK does not endorse or guarantee the accuracy of external content. For personalised guidance on your business payment needs, please contact us directly at editor@klipy.uk.
Found this helpful? Share with your network:
This content is published by Klipy UK, a Teya-authorised reseller of payment solutions. The views expressed are for informational purposes only and do not constitute financial advice. All content is the intellectual property of Klipy UK. Reproduction without permission is prohibited.
See exactly how much you could save. Upload your statement or enter your monthly turnover-instant results, no obligation.
Try Calculator