Software-defined Payments Infrastructure

Software-defined anything (SDx) is a new term, attempting to name a collection of standards for computing infrastructure programmability and data center interoperability. It started with software-defined networking (SDN), which enables the separation of the networking logic and policies into software, decoupled from the individual hardware device. Think functionality similar to Cisco or Juniper network devices running on commodity hardware — highly disruptive, and so potentially lucrative that most startups in the field have either been already acquired or have valuation in the stratosphere.
The SDN concept of using generic hardware and couple it with software for specific functions can be extended to other areas of data center infrastructure and is being implemented today through open source projects — OpenStack, OpenFlow, Open Compute Project and Open Rack. It usually starts as a project- or vendor-driven initiative, trying to build a community of developers around proprietary interfaces, and interoperability only follows as the market moves to commodity hardware. 
With a longer time line, the decoupling of proprietary HW and SW has started with the demise of the mainframe as the only computing solution to business problems, the explosion of of PCs (another commodity hardware path)  and, more recently, to the huge success of the mobile app ecosystem, where the mobile smartphone/handset is almost commodity HW (cheapest generic Android phones I have seen were $35 in volumes…)
Which brings me to NFC, more precisely the combination of the Secure Element (SE) as the chip for keeping payment credentials secure, and NFC as the secure contactless communication protocol for the connection between a physical device holding payment credentials and the Point of Sale terminal.
With hundreds of millions of SE chips being shipped to handset manufacturers, it is now as commodity HW as one can get. And NFC capability is now being added for free since it is the same chipset that deals wifi/ble/nfc. Again, commodity…
I have been told many times that “NFC is dead” and that “there is no compelling value for customers/merchants” for NFC to take of. I am not going to argue with those statements here, however the generic trend is to move away from proprietary solutions and towards the combination generic hw (mobile phone) and software-defined-anything. And one can fight or ignore the trend, and the market can stay irrational much longer than you can stay liquid, and all that. But at one point it will just make business sense not to pay for a plastic card with an embedded chip when all your customers have a phone with exactly the same chip, and all you need to provision payment credentials is software.
And the same logic applies to the POS side — and many companies have transformed the phone into a payment terminal with the addition of a commodity dongle. While the dongle is great for backward compatibility with existing cards, it would not be needed when the POS is a software-defined POS that all it needs is a generic phone.
Touch the customer phone to the merchant phone and the payment transaction happens securely, and cheaply. No more specialised hardware, only software-defined payments infrastructure.