14 June 2020
From the JoinPAY archive. Information reflects the original publication date.
SoftPOS is a new-gen solution from JoinPAY for enterprises and credit and finance institutions that allows accepting cash, cashless, and QR payments (QR payments) through a conventional Android smartphone, using it as a fully-blown cashier's office, and generating fiscal receipts. Maksim Bornovolokov, CEO of MST Company LLC, unveils the product essence and market perspectives.
Market Trends
Several explicit factors drive the emergence of SoftPOS as a new product. For one, we should note the focus on the digitized economy and reducing the use of cash as a mode of payment throughout CIS states. It is no secret that the share of cashless payments keeps growing year by year, facilitated by global payment systems MasterCard and Visa. Speaking of, these payment giants have already obliged their Russian partner banks to terminate the issue of contact-only bank cards by mid-2021. This means that we don't need POS equipment fitted with a magnetic or chip reader anymore.
Going forward, the recent creation of a new taxpayer category in Russia, self-employed citizens, significantly expands the potential of SoftPOS solutions. Individuals and entrepreneurs that switch to the newly-introduced tax mode can now limit their personal income taxes to payments at reduced rates of 4 to 6 percent. This allows for carrying out legal business activities and earning with no risk to get a fine for illicit entrepreneurship.
According to our findings, the share of self-employed citizens may reach 20-30 million people within a few years. As far as I'm concerned, I consider this very segment perfect for test-driving SoftPOS solutions.
An important event that facilitated the expansion of SoftPOS solutions was the amendments to Federal Law No. 54 «On the use of cash register machines in settlements in Russia». The changes made gave the green light to remote online fiscalization for commercial traveling, courier, and transport services. All this eliminates the need to use a physical cash register machine in situ.
When used at a stationary point of sale, a SoftPOS solution can be easily connected to a fiscal data recorder via Bluetooth.
Technology
In terms of technology, there are two approaches to implementing SoftPOS solutions so far.
The first one suggests installing SoftPOS solutions only on Android-powered Samsung smartphones granting access to the built-in comprehensive security system Samsung Knox. Being kind of an add-on to the Android OS, the technology creates a secure container inside a smartphone or tablet. A SoftPOS payment solution is deployed into the Knox container, after which all container data turn 256-bit-encrypted. The platform provides a rich arsenal of tools for storing keys securely and fulfilling essential cryptographic functions. Knox lets a user manage the device's security policy and even control the device remotely.
To date, supported devices include Samsung A, S, Xcover, and Tab series, equipped with Android 8 or later and Knox 3.1 or later.
The second option implies installing a SoftPOS solution on any Android smartphone, only requiring NFC and Android version no older than 7.0. But in this case, requirements regarding certifying the solution in payment systems are by far stricter.
A significant advantage over the first option is easy solution startup and high scale-up speed, as all the party needs to do is install the application and sign in using prepared credentials.
Certification
The Payment Card Industry Security Standards Council recently published a new security standard for solutions helping sellers accept contactless payments by means of NFC-enabled commercial off-the-shelf devices.
The Contactless Payments on COTS (CPoC) standard and related validation program allow vendors to provide sellers with solutions that enable the latter to accept contactless payments. Such solutions are designed tested so as to keep payment data secure.
You can find more information about the standard on PCI Security's official website.
Currently, the world knows no solutions certified to the new CPoC standard.
However, this certification will become obligatory starting in February 2021. Before that time, it is possible to apply pilot security requirements as set by Mastercard, Visa, and National Payment Card System. Less strict, they only suggest 20 criteria instead of 400 in certification.
In our case, the integration of SoftPOS solutions into third-party applications is available. But, the company that performed the integration needs to certify the app to the PCI's CPoC standard as the end application shall always be certified. However, considering our architecture and having the application report at hand, the laboratory will monitor how the application is integrated with third-party security assets. Eventually, such certification turns significantly cheaper and simpler. What should also be noted is that we assist companies in certifying the SoftPOS-compatible end application.
Advantages over classic bank card readers
SoftPOS Benefits for Banks:
No need to procure payment equipment. Such procedures may take months, especially if one of the procurement parties finds the process compromises their rights. We help achieve financial efficiency as early as at this stage, relieving the Bank's specialized departments.
No CAPEX (expenses on payment equipment). No need to install the solution on current assets or low-cost assets, perform inventory checks, dispose, or utilize assets.
No costs on acquiring network support (by the Bank's or outsourced company's efforts ).
Reduced expenses on network services (SIM cards for mobile POS terminals).
Simplified launch process. No equipment setup, delivery, or staff training required.
SoftPOS Benefits for Business:
Mobility. A smartphone is always near at hand, so payments can be accepted practically everywhere.
No card payment-related costs. No need to lease, purchase equipment, or get high protective rates. Very beneficial for micro merchants.
Scaling. Perfect for MLM! Thousands of Oriflame, Mary Kay, and other network marketing affiliates can start selling services and products right away. Meanwhile, it is quite difficult to implement and maintain such networks by means of legacy POS terminals.
The QR payments is available in SoftPOS—thus an enterprise can reduce bank fee-related costs. A SoftPOS-enabled business can accept cash, bank cards, and payments through the QR payments (in countries where the National Payment Card System is available).
SoftPOS' Global Outlook
Considering the current COVID-19 situation, a SoftPOS solution helps install the application remotely, thus avoiding any physical contact with a bank specialist or outsourced engineer. The focus on increasing the noCVM limits makes SoftPOS solutions a flawless mode of payment.
To date, the noCVM limits are as follows:
MasterCard: RUB 5,000
VISA: RUB 3,000 (VEPS limit concerning all interfaces)
MIR: RUB 1,000
UPI: RUB 1,000
NPCS QR payments: RUB 600,000 (as prescribed by the Central Bank of Russia); since 2021, the limit will be RUB 2,000,000 per transaction, with banks able to set their own limits.
Contacts
Maksim Bornovolokov
If you are interested in our solutions or have any questions, please contact me.
email: This email address is being protected from spambots. You need JavaScript enabled to view it.
tel: +7 (343) 227-98-85 ext.1000/1001
email: This email address is being protected from spambots. You need JavaScript enabled to view it.
tel: +7 (343) 227-98-85 ext.1000/1001