SoftPOS: everything key players need to know about devices. (Chapter 2)

The power of NFC.

SoftPOS (Software Point of Sale) solutions transform a regular smartphone or tablet– known as a Commercial Off-The-Shelf (COTS) device – into a contactless payment terminal. These solutions utilize the device’s embedded Near Field Communication (NFC) capability. As the name indicates, it enables data transfer between two devices which are placed near to each other. As the technology behind contactless payments, NFC has soared in popularity over the past few years. In 2021, nearly all Android phones on the market have NFC functionality, enabling them to perform payments. NFC devices had the following functionalities:

• Contactless reader mode – which allows the device to accept SoftPOS payments from wearables, cards and mobiles.

• Contactless card emulation mode – which allows the device to behave as a contactless smartcard to make a payment.

• Contactless peer-to-peer – which allows the device to communicate with another NFC device.
  
  

Designing a device which can perform all of these functionalities well is difficult because the device needs to meet multiple different requirements. One of the reasons it is difficult is that NFC devices are being developed and certified for card emulation mode, which has different requirements to reader mode. For example, in reader mode, the device has to generate the radio frequency field used to communicate with the payment card or device. It can be very challenging for COTS devices to match the performance of a traditional POS, meaning OEMs are playing catch up to compete with traditional POS vendors.

Where to tap? 

As with traditional contactless payments, when making a SoftPOS payment the consumer must hold their card, smartphone or wearable near the antenna within the acceptance device. This enables the communication between the two devices. The antenna can be located either at the top, middle, or bottom of the rear side of the device, since it is ideally positioned for ‘card emulation’ mode to make mobile wallet payments. However, there is currently no standard spot for placements of antennas.

To help consumers find the antenna, some solutions show the contactless symbol on the screen of the device or on a sticker on the device which directs consumers where to place their card or device to make a payment.

A matter of centimeters = a big difference.

Similarly, read ranges differ between SoftPOS and traditional POS terminals. Four centimeters is the maximum distance range defined by EMVCo to be able to read a card or mobile wallet for a legacy terminal, which is Level 1 certified. This can drop to only two centimeters on a mobile device. 

These differences between legacy POS terminals and SoftPOS solutions could create confusion for consumers, who are now familiar with where to tap their card or device to make a payment. This could slow down the payment process and cause frustration during the customer’s purchase experience. It is fundamental that manufacturers design their devices with this in mind to make it simple for merchants to accept payments.

The compliance conundrum. 

As with all payment products, it is important that device manufacturers ensure their solution meets the relevant requirements to enable safe and secure transactions. For contactless payments, this means achieving Level 1 certification in line with the EMV® Contactless Communication Protocol Specification. Level 1 tests ensure that the contactless device can meet the analog and digital requirements like lower level electromagnetic field and communication protocols, including operating distance tests.

However, although Level 1 certification is important, the hoops you have to jump through to evaluate your device in line with the latest requirements differ between SoftPOS and traditional POS payments. Traditional POS payment terminals are certified in line with the EMV® Proximity Coupling Device (PCD) Level 1 requirements. This certification process does not currently apply to SoftPOS payments. Why? Because of the differences between COTS devices and payment terminals, the compliance process has not caught up yet – but this will soon change.

When you know. It is easy.

In lieu of the standards that govern traditional POS systems, COTS devices can seek approval with EMVCo’s TapToMobile Program. This evaluation process enables OEMs to test their device’s performance, interoperability, user experience and read range. The program is not a requirement for deployment, but it marks the onset of a standardized certification process for SoftPOS solutions.

By completing this evaluation, manufacturers can ensure that their solution meets the relevant EMVCo Level 1 requirements. Unlike the EMVCo Level 1 evaluation for ‘card emulation’ mode, this process is not mandatory for SoftPOS solutions, so merchants should be cautious about which device they select to implement their solutions on. If they are not, they could make themselves vulnerable to loss of revenue and reputational damage. Insecure and malfunctioning payment devices could create extensive problems for big companies that equip their staff with payment acceptance devices, as it could temporarily shut down operations across the world. Merchants should note that as SoftPOS payments utilize a merchant-owned device, they are responsible if payment transactions can’t be made, rather than it being the fault of acquiring banks or terminal suppliers.