Voice of the Industry

Leveraging tap-to-pay technology for safe contactless payments

Monday 8 July 2024 09:20 CET | Editor: Irina Ionescu | Voice of the industry

Gabriel Lucas, Director at Redbridge Debt and Treasury Advisory, tackles the future of tap-to-pay payments and their multiple uses for streamlining digitalisation, enhanced security, and financial inclusion.


Over the past decade, the payments landscape has undergone significant transformation, with tap-to-pay technology standing out as a pivotal innovation. Leveraging Near-Field Communication (NFC), tap-to-pay enables consumers to complete transactions by simply tapping their card or NFC-enabled mobile device near a terminal, thus eliminating the need for a PIN. This advancement has substantially increased consumer convenience. The COVID-19 pandemic further accelerated the demand for contactless payments due to hygiene concerns, leading to over 100 markets witnessing a more than 50% increase in the share of in-person transactions that were contactless between the first quarter of 2020 and 2021. This growth trend shows no signs of slowing down.

Merchants and payment companies are acknowledging this shift and preparing for the future by adapting to new payment methods and upgrading terminals. A notable development in this area is SoftPOS, an application that converts Apple and Android smartphones into payment terminals. The rising popularity of SoftPOS has prompted historical leaders in the payment terminal industry to pivot in this direction. For example, Ingenico acquired Phos, a leader in software-only point-of-sale solutions, in March 2023. This strategic move positions Ingenico to serve merchants directly through their phones, eliminating the need for physical terminals.


New opportunities and challenges

From a customer experience perspective, tap-to-pay offers the convenience of using smartphones with digital wallets like Apple Pay and Google Pay. Transactions are completed quickly with a simple tap, reducing wait times, and enhancing convenience. These platforms integrate with digital wallets for seamless management of payments and loyalty programmes. The contactless nature ensures hygiene, while security features such as encryption and tokenization protect sensitive information, building trust and making the payment process smoother and more secure.

Merchants who adopt wallets like Apple Pay and Google Pay at the point of sale often notice increased customer satisfaction and improved payment process efficiency. However, they might also face higher monthly invoices in countries with co-badged cards where the local network predominates. This is particularly evident in France, where international wallets initially partnered with global networks, making it easier for issuing banks to rely, at least at first, only on Visa or Mastercard for NFC wallet payments.

The introduction of SoftPOS represents a significant shift at the point of sale. Smartphones or tablets can now function as payment terminals without additional hardware. This raises important questions for merchants about how POS digitisation will impact their business. Digitisation is likely to bring value-added services and flexibility, as hardware is no longer a core component of the Payment Service Provider (PSP) offering. Accepting payments through tap-to-pay now only requires a smartphone, a contract with a PSP, and the PSP app — an approach closely resembling ecommerce.

With hardware no longer tied to PSPs or banks, merchants can have multiple contracts and apps with different acquirers. This prompts questions about improving efficiency and intelligence in payment routing, rather than manually selecting the most relevant acquiring app. Will payment orchestrators enter the POS space and leverage their ecommerce expertise? Currently, SoftPOS solutions are particularly appealing to small businesses due to their cost-effectiveness and ease of use. 

The future of POS terminals

Is the traditional POS terminal destined to disappear? Probably not, as the reality is more complex, especially for merchants covering numerous points of sale across different countries. 

Historically, terminals have been provided by PSPs to ensure the security of these sensitive devices and their software. However, as tap-to-pay is software-based, how can enterprise merchants manage the complexity of purchasing hundreds or thousands of smartphones just to accept payments? This would involve dealing with smartphone manufacturers or new specialists, increasing complexity in their payment architecture.

The cost implications of purchasing smartphones can quickly exceed those of traditional POS terminals. Smartphones require regular maintenance and pose additional replacement challenges. Their batteries, for instance, may not endure the intensive, continuous usage typical in high-demand environments like supermarkets. 

Moreover, while tap-to-pay technology is certified by relevant networks, acquirers, and other regulatory entities, its security efficacy compared to traditional terminals remains to be conclusively demonstrated through extensive, real-world application.


Tap-to-pay technology is here to stay and will continue to grow rapidly. From a customer perspective, the payment process is incredibly streamlined, as evidenced by its increasing adoption across all geographies. While accepting NFC payments on standard POS terminals has limited consequences for merchants, aside from higher costs in some cases, the main disruption lies in SoftPOS. This technology can transform smartphones into payment terminals, bringing transparency and flexibility to the POS ecosystem, potentially through orchestration.

The future of tap-to-pay payments will likely see a blend of traditional POS terminals and innovative solutions, each serving different needs within the retail environment. Merchants, PSPs, and technology providers will need to navigate the complexities of this evolving landscape to fully leverage the benefits of tap-to-pay technology while addressing the associated challenges. The continued growth and adoption of tap-to-pay payments indicate a significant shift in how transactions are conducted, making them more efficient, secure, and convenient for both consumers and merchants.

As the landscape of payments continues to evolve, it is crucial for all stakeholders to stay abreast of these developments and adapt accordingly. The intersection of convenience, security, and technological advancement that tap-to-pay represents holds great promise for the future of transactions, paving the way for a more streamlined and efficient payment ecosystem. By embracing these changes and addressing the challenges head-on, merchants and payment providers can enhance the customer experience, optimize their operations, and stay competitive in an increasingly digital world.

About Gabriel Lucas

Leading the European payment practice at Redbridge, Gabriel has been providing strategic advice to international and multichannel merchants in their payment transformation and optimisation journeys since 2020. He previously worked for four years as Chief Operating Officer at a France-based Electronic Money Institution (EMI) specialised in alternative payment methods.


About Redbridge

Redbridge Debt and Treasury Advisory is a leading financial management partner to corporations around the globe. It is committed to providing each client with all the information required to make the best decisions and optimise their financial performance. Redbridge’s teams are located in Houston, New York, Paris, Geneva, and London.

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Keywords: Tap-to-Pay, SoftPOS, POS, mPOS, payment processing, contactless payments, payment processor, digital payments, digitalisation, payments orchestration, PSP, merchant, financial inclusion, NFC, payment gateway, Acquirer, ecommerce, digital wallet, mobile payments, tokenization, e-wallet, COVID-19
Categories: Payments & Commerce
Companies: Redbridge
Countries: World
This article is part of category

Payments & Commerce


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