South Africa has recently seen a flood of affordable point-of-sale machines targeting small businesses. The most popular are budget wireless devices imported from abroad that allow businesses to accept credit and debit cards. 

But it's now possible to accept card payments without a card reading device, using what the industry calls Software Point of Sale, or SoftPOS. Simply by downloading free fintech apps on a compatible smartphone, merchants can accept tap-to-pay card transactions.

A handful of free mobile apps in South Africa allow this functionality, and at least two leading banks are buying into this technology as part of their merchant offerings. 

Unlike card reading devices, these apps, available in the Google Play Store and Apple App Store, require no upfront device payment. Merchants download the app to a compatible phone, sign up, and once registered, can accept tap-to-pay card payments from customers. SoftPOS providers make money by charging merchants transaction fees for every sale, which vary between 2.15% and 2.75%, depending to the institution.

There are, however, some caveats and limitations not present in entry-level mPOS devices. Although SoftPOS will save small businesses from paying an initial device fee - which these days can be as low as R100 - the merchant must have a compatible smartphone with Near Field Communication (NFC) functionality. This, typically, is not present on entry-level phones. 

Shoppers will also need to have cards with tap-to-pay functionality - and if they feel uneasy about tapping a card to a merchant's smartphone or want to insert their chip, merchants will need to have a more traditional card reading device anyway. As a fallback, many SoftPOS apps do however have QR code functionality.

Even so, for small businesses looking to expand their point of sales machines in stores, or for certain niche informal business cases, SoftPOS options may be beneficial. 

Here are four SoftPOS apps currently available in South African app stores.

Nedbank PocketPOS offers a payment gateway app for Android and iOS that doesn't require a card reading device. The app supports customers tapping contactless cards on compatible phones to process payments or alternatively scanning a MasterPass QR code. Although Nedbank also sells a device, which costs R1 199 to non-Nedbank customers, merchants are free to use the app on its own.

Telkom's Financial Services arm recently launched point of sales options that include a wireless card reading device and a free app that supports tap-to-pay functionality. If this isn't an option for customers, the app can generate a QR code.

Zapper originally made a name for itself as a QR code payment option in the style of competitor SnapScan. The company's merchant app now also includes the option to accept tap-to-pay credit card transactions, as well as the traditional scan-to-pay methods.

HelloPay has a SoftPOS app available alongside its selection of more traditional point-of-sale devices. The app enables NFC-compatible Android devices to accept contactless card payments and only pay a per-transaction fee.

Transaction fee: 2.15% (debit card); 2.5% (credit card)