The terminal paradigm shift

For years, Soft POS has existed quietly within Nigeria’s payments ecosystem—available, functional, yet largely underestimated. While the technology promised convenience and cost efficiency, it failed to gain widespread adoption. This was not because Soft POS lacked relevance, but because the surrounding ecosystem—regulation, infrastructure, consumer behaviour, and device readiness—had not yet aligned to support meaningful scale across the market.

That alignment is now taking place.

Recent regulatory actions by the Central Bank have reshaped the national conversation around payment acceptance. New compliance requirements covering transaction thresholds, authentication limits, device standards, and live-location tracking on Android 10 and above have fundamentally changed how merchants evaluate payment tools. These measures, introduced to improve security, traceability, and consumer protection, have also increased the cost and complexity of deploying traditional hardware-based POS systems at scale.

At the same time, the broader market has evolved. Banks are increasingly issuing contactless cards as the default, virtual card usage continues to grow, and smartphone manufacturers are enabling NFC functionality across a wider range of devices. What once required specialised payment hardware can now be supported by smartphones already in the hands of merchants and consumers.

Taken together, these developments point in one direction: contactless payments and Soft POS are transitioning from optional innovations to essential infrastructure.

Cost dynamics are further accelerating this shift. As Nigeria entered 2026, a ₦50 stamp duty charge applied to transfers—paid by the sender—made bank transfers less attractive for everyday transactions. For many users, card payments now offer a cheaper, faster, and more predictable alternative. When cost efficiency aligns with convenience, changes in consumer behaviour tend to follow quickly.

For large organisations, the economic implications are even more pronounced.

Consider a retail group operating fifty stores nationwide, with each location requiring five payment points to manage customer flow effectively. That translates to two hundred and fifty POS terminals. At an average cost of one hundred dollars per Android-based POS device—now widely expected under regulatory guidelines—the upfront hardware investment alone reaches twenty-five thousand dollars, excluding logistics, maintenance, replacements, and device management overhead.

Whether this cost is absorbed by banks, fintech providers, or the businesses themselves, the conclusion remains unchanged: scaling traditional POS infrastructure is expensive. At a larger scale—hundreds or thousands of outlets—the financial burden becomes increasingly difficult to justify, particularly in an environment where margins are tightening and operational efficiency matters more than ever.

Soft POS introduces a fundamentally different approach.

By shifting payment acceptance from hardware to software, businesses can eliminate terminal procurement entirely. Deployment becomes faster, updates are delivered remotely, and scaling no longer requires proportional increases in capital expenditure. A smartphone—already a standard operational tool—becomes the payment terminal.

This model delivers more than cost reduction. It simplifies operations. Businesses no longer need to manage physical device inventories, coordinate repairs, or endure long deployment cycles. Payment acceptance becomes agile, allowing organisations to expand or adapt quickly without being constrained by hardware availability.

Consumer behaviour further reinforces this transition. Users increasingly expect frictionless experiences: tap, authenticate, and proceed without delay. Contactless card payments meet this expectation, while Soft POS enables merchants to support it seamlessly. As trust in digital payments deepens, resistance to non-cash transactions continues to decline across demographics.

Importantly, this evolution is not solely about technology. It reflects a broader structural change in how payments are designed, regulated, and experienced. The long-held assumption that accepting card payments requires dedicated hardware is being challenged. In its place is a software-driven model that prioritizes accessibility, scalability, and resilience.

For emerging markets, this shift carries significant implications. Lower barriers to entry allow more small and medium-sized businesses to participate in the formal economy. Reduced infrastructure costs improve sustainability. Software-led systems also allow payment networks to evolve in step with regulatory updates and consumer expectations.

The terminal, as it has been known for decades, is being redefined.

The future of payments is contactless. The future of terminals is software. And the paradigm shift is already underway.

Victor Daniyan is the founder and CEO of Nearpays and Yourrider, two startups transforming fintech and clean energy in Africa. A Certified Management Consultant and Forbes 30 Under 30 nominee for 2024, he is recognised as one of Africa’s bold voices in payment innovation and sustainable energy.

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