Smartphones as PoS Terminals Fill Digital Gap But Face Challenges

COVID-19 has led to the speedy adoption of digital payment methods across India. However, many small merchants, local vendors and self-employed individuals find it difficult to afford a mobile PoS (point of sale). At the same time, it is important for them to have such a device to match different customer preferences for the mode of payment. A new form of PoS, called Soft PoS or Software PoS, aims to fill this gap by converting a smartphone or tablet into a terminal for digital payments. Hence, no additional hardware is needed to enable digital payments.

Counterpoint Research PoS evolution
Source: Counterpoint Research

Smartphone/tablet as Digital payment terminal

Soft POS solutions, like All Tap by Pine Labs, transform a smartphone or tablet into a payment terminal. Here are some of their basic characteristics:

  • These solutions are available for free only on Google Play Store.
  • They are compatible with smartphones embedded with NFC (near-field communication) chips.
  • Smartphone as a PoS terminal provides all digital payment options in one application, including debit/credit cards (across all four networks), wallet, BQR and UPI.
  • Based on the occupation, a transaction limit is set for the entrepreneur.
  • The onboarding procedure is user-friendly, and one SIM holder can have one account.
  • When changing the smartphone, the user needs to go through only the authentication step of onboarding.
  • To abide by the Reserve Bank of India (RBI) regulations, PIN-less transactions of only up to Rs 5,000 are allowed.
  • The solutions are cryptographically secured.
Counterpoint Research Smartphone as PoS Terminal
Source: Counterpoint Research

How secure are these solutions in terms of hardware?

Handling finances via cellular devices brings the security aspect under the scanner. Both hardware and software security of cellular devices have an important role in ensuring user data security and privacy. However, in H1 2020, only 4.18% of the smartphones in India were estimated to have secure hardware. This number is expected to reach 9% by the end of 2021. Further, it may be noted that this portion is mainly composed of smartphones from the premium segment. But since these solutions are targeted at those who can’t afford a PoS machine, it is more likely that smartphones with poor hardware security will be used with them.

Therefore, despite ensuring software security, which most brands claim to, the smartphones from non-premium price bands are not exactly the right fit for these digital payment solutions.

Challenges in implementing these solutions.

Apart from the above-mentioned concerns related to hardware, there are other challenges in transforming smartphones into PoS terminals:

  • These solutions only work with smartphones embedded with NFC, which is still a niche market in India.
  • Spreading awareness about these user-friendly solutions in all parts of a vast country like India can become challenging due to inadequate infrastructure.
  • A major segment of the target population for these solutions is composed of those who prefer cash transactions. Bringing about a behavioural change in them is not easy.
  • Cash transactions are often used to avoid taxes. But these solutions record all transactions undertaken through them.

Stronger Adoption of Digital Payment Ecosystem

Digitization in the financial segment brings a competitive edge to a country’s economy by amplifying the velocity with which the movement of money takes place. It also acts as a multiplier for other industries linked to it.

In India, over the last decade and especially after demonetization, innovations in payment modes have evolved, from the online payment mode to UPI apps. The lockdowns and social distancing triggered by COVID-19 have accelerated the shift to digital modes. Also, RuPay cards of the National Payments Corporation of India now allow offline transactions in areas with low internet connectivity.

Growing preference for digital payment modes like UPI, wallets, PoS and QR codes as against cash or debit/credit card transactions has put pressure on businesses and self-employed people to have PoS devices.


A small business or solo entrepreneur cannot always afford a PoS terminal. Besides, some may find it difficult to operate them. It is in these cases that the above-mentioned solutions come to the rescue. They transform a smartphone into a PoS terminal that provides a simpler and familiar user interface. With almost 40% penetration in India, smartphones are the best mode to promote digital payments. Further, these payment solutions do not require any additional investment.

However, the low penetration of smartphones with secure hardware in India means that users availing of these solutions may end up exposing confidential data to attacks. Therefore, apart from having a bigger market for NFC-enabled smartphones, it becomes important for smartphone manufacturers to improve hardware security to let users benefit from these solutions.

Related Posts

Arushi Chawla is a Research Analyst with Counterpoint Technology Market Research, based out of Gurgaon (near New Delhi). Currently, she is dedicated to primary research of emerging technology like mobile phone device, consumer IoT, and other technology-associated segments. She also has a keen interest in researching the impact of mobile phone technology and the digital payment ecosystem on the economy. Arushi holds a Post Graduate Degree in Economics from Amity School of Economics and is a graduate in Economics from Delhi University.

Term of Use and Privacy Policy

Counterpoint Technology Market Research Limited


In order to access Counterpoint Technology Market Research Limited (Company or We hereafter) Web sites, you may be asked to complete a registration form. You are required to provide contact information which is used to enhance the user experience and determine whether you are a paid subscriber or not.
Personal Information When you register on we ask you for personal information. We use this information to provide you with the best advice and highest-quality service as well as with offers that we think are relevant to you. We may also contact you regarding a Web site problem or other customer service-related issues. We do not sell, share or rent personal information about you collected on Company Web sites.

How to unsubscribe and Termination

You may request to terminate your account or unsubscribe to any email subscriptions or mailing lists at any time. In accessing and using this Website, User agrees to comply with all applicable laws and agrees not to take any action that would compromise the security or viability of this Website. The Company may terminate User’s access to this Website at any time for any reason. The terms hereunder regarding Accuracy of Information and Third Party Rights shall survive termination.

Website Content and Copyright

This Website is the property of Counterpoint and is protected by international copyright law and conventions. We grant users the right to access and use the Website, so long as such use is for internal information purposes, and User does not alter, copy, disseminate, redistribute or republish any content or feature of this Website. User acknowledges that access to and use of this Website is subject to these TERMS OF USE and any expanded access or use must be approved in writing by the Company.
– Passwords are for user’s individual use
– Passwords may not be shared with others
– Users may not store documents in shared folders.
– Users may not redistribute documents to non-users unless otherwise stated in their contract terms.

Changes or Updates to the Website

The Company reserves the right to change, update or discontinue any aspect of this Website at any time without notice. Your continued use of the Website after any such change constitutes your agreement to these TERMS OF USE, as modified.
Accuracy of Information: While the information contained on this Website has been obtained from sources believed to be reliable, We disclaims all warranties as to the accuracy, completeness or adequacy of such information. User assumes sole responsibility for the use it makes of this Website to achieve his/her intended results.

Third Party Links: This Website may contain links to other third party websites, which are provided as additional resources for the convenience of Users. We do not endorse, sponsor or accept any responsibility for these third party websites, User agrees to direct any concerns relating to these third party websites to the relevant website administrator.

Cookies and Tracking

We may monitor how you use our Web sites. It is used solely for purposes of enabling us to provide you with a personalized Web site experience.
This data may also be used in the aggregate, to identify appropriate product offerings and subscription plans.
Cookies may be set in order to identify you and determine your access privileges. Cookies are simply identifiers. You have the ability to delete cookie files from your hard disk drive.