It’s often a rewarding feeling for business ownerswhen a customer buys something.
The moment of payment, however, carries high stakes. Is payment so seamless that customers glide through hassle-free? Can they use any form of payment, whether a debit or credit card, smartphone app, or cash? Are you automatically tracking every sale so you can easily calculate changes in inventory, profit, or tax obligations with each sale? If not, it might be time to invest in a point-of-sale system. Here’s an overview of point-of-sale systems, often referred to as POS, and whatworking with POS companiescan do for your business.
Table of Contents
- What is a POS company?
- 3 types of POS systems
- How to choose the right POS system for your business
- 5 top POS companies
What is a POS company?
POS companies are businesses that help other companies manage payment processing, typically in real time. For example, at a grocery store, the point of sale refers to the moment the customer swipes their card at the cash register, points their smartphone at a reader, or—less often these days—hands cash to a sales clerk.
A POS company can provide a retailer with a simple system that functions as electronic cash registers. More complex software solutions, particularly those suited for ecommerce companies, analyze purchase characteristics, inventory, sales data, customer profiles, and more.
3 types of POS systems
POS systems fall into three different categories. Some companies specialize in just one type, while others offer a hybrid of categories. .
- Hardware. Some POS providers specialize in physical hardware such as cash registers, receipt printers, and bar code scanners. For decades, many retail businesses relied exclusively on hardware POS systems, which help process and tally sales.
- Software. Businesses that sell products or services online need software POS systems because there’s no personal contact with the customer. These systems give ecommerce companies the ability to accept orders and receive payments virtually, even if the customer is thousands of miles from the seller’s physical location.
- Integrated. Integrated POS combines the hardware of traditional POS systems with software. For example, a store may want an integrated POS system that will accept payments for both in-person purchases at their brick-and-mortar location and online orders from their webshop.
How to choose the right POS system for your business
When deciding on the best POS system for your company, you should, among other things, anticipate your transaction volume, and know the number of users and their locations and how much you can afford to spend. Then assess the payment plans of the various POS companies.
POS costs depend on the provider’s pricing system. Most POS systems charge a fee for each sale—usually 2% to 3% of the purchase amount. Some companies also charge flat fees of 10¢ or more for each transaction. If your average sale is on the larger side, you will probably get more for your money from POS companies that charge lower percentage fees. If your business has a large volume of small purchases, then flat fees will add up. POS companies also often charge monthly fees.
POS companies offer systems with a wide range of features. Mobile POS systems let businesses such as restaurants or pop-up stores process checkout via smartphone, while cloud-based POS systems are designed for online payments. Some POS software programs are designed for inventory management while others track the sales performance of individual employees. Some are tailored for specific industries, such as dining or ecommerce. Because the tools needed in a POS system differ for every industry, it may be helpful to make a list of what you need, then search for companies that offer the desired features.
5 top POS companies
Below are some major POS vendors, with overviews of their systems and costs.
Shopify offers basic POS software at no charge to all of its subscribers, with a more advanced Pro plan that costs $89 a month. Shopify’s basic POS charges merchants 2.7% per in-person credit card transaction with no additional flat fee, making it less costly for businesses with many small transactions. A Shopify card reader is an additional $49.
Shopify POS services are designed to integrate seamlessly with existing Shopify stores, and all plans offer integrated POS services that track in-person and virtual sales. The more advanced Shopify POS system offers the ability to automatically group similar products in a business’s inventory, making it easier to analyze sales trends; unlimited cash registers; and the ability to accommodate as many as 1,000 store locations.
Start selling in-person with Shopify POS
Shopify POS is the easiest way to start selling in-person. Have all the tools you need to manage your online and physical stores, market to customers, and sell everywhere in one easy-to-understand back office.
Square’s POS software includes features like the ability to track customer appointments and schedule employee shifts. Square retail POS systems primarily cater to food and beverage, apparel, and beauty stores. An app for clients lets shoppers use an iPhone for contactless tap and pay. Square doesn’t charge a monthly fee for its basic POS plan. However, a fee of 10¢ per transaction on top of a 2.6% payment processing fee can make it expensive for businesses with high transaction volumes. Learn more about how Square compares to Shopify POS.
Toast POS is designed specifically for restaurants, coffee shops, and other food and beverage businesses. Its hardware can withstand spills, and its software accommodates menu management and online ordering. The restaurant POS software also notifies servers when diner orders are ready. Toast offers two main payment models: pay as you go and a standard plan that charges upfront. For the pay-as-you-go model, Toast’s restaurant POS systems provide free hardware (though there may be installation costs) and charge restaurant owners 15¢ and 2.99% of the order price. In the standard model, the business pays hardware costs, which start at $799, and 15¢ and 2.49% of the order price.
Lightspeed offers POS systems designed for retail businesses, restaurants, and golf courses. The basic service charges 10¢ per transaction and a 2.6% fee, plus a monthly fee of $69 or $89 per month, depending on whether the buyer pays annually or monthly. More advanced systems cost between $119 and $199 a month, depending on the features. One cash register is included in all plans. Lightspeed is an integrated cloud-based software that works both in-person and online. Business owners using more advanced Lightspeed plans also have access to a built-in reports feature that provides customer data, employee performance data, and sales analysis. Learn more about how Lightspeed compares to Shopify POS.
Clover’s cloud-based POS systems are aimed primarily at retailers, though they also can be configured for restaurants and bars, as well as health care providers. Clover is known for its integration with third-party apps such as Mailchimp (for email campaigns), Docusign (for virtual document signing), and Time Clock (for employee scheduling). Rates start at $14.95, while transaction costs start at 2.3% and 10¢ per sale. Hardware, such as cash registers, touch-screen terminals, and card readers, can be bought through Clover or through its partner financial institutions, such as Citi and Wells Fargo. A mobile card reader costs $49, while a countertop system with a touchscreen costs $1,799. Learn more about how Clover compares to Shopify POS.
POS systems FAQ
How much does a POS system typically cost?
POS software companies usually charge between 2% and 3% of the purchase value of each transaction. Some POS software programs may also charge monthly fees that can range from $20 to $200—and in some cases more. Buying POS hardware without subscribing to a software can add several hundred dollars—depending on the type of device—to POS system costs.
Can I use the same POS system for multiple locations?
Yes. Shopify POS Pro, for example, lets business owners use the same POS system for as many as 1,000 different store locations. Many other POS providers accommodate multiple locations, sometimes at additional cost.
What types of businesses are best suited for POS systems?
Retail stores, restaurants, and ecommerce businesses are all well-suited for POS systems. POS systems are especially helpful for businesses that receive a large number of payments by credit card, either in-person or online.
- In-store POS systems. ...
- Kiosk POS systems. ...
- Mobile POS systems. ...
- Touchscreen POS systems. ...
- Cloud-based POS systems. ...
- Open-source POS systems. ...
- Multichannel POS systems.
- Initial setup cost (time and money)
- Payment processing costs (e.g., % of sale + charge per transaction)
- Other monthly processing fees (e.g., PCI-compliance fee, chargeback fees)
- Equipment costs/rental fees.
- POS software fees.
There are four main types of POS systems: legacy, tablet-based, mobile, and cloud-based POS systems. The last three of these types of systems are considered “modern” POS systems and are usually more efficient and affordable than legacy systems.What should I look for in a POS software? ›
- How does the POS handle inventory?
- How does the POS system sync your online and retail store?
- Does the POS system empower your staff?
- Can you offer a personalized experience?
- Does the POS support your success?
Typically, Windows is recommended for large stores while iOS and Android are suggested for small stores.What is a POS system example? ›
A point of sale system is where a customer makes the payment. For example, a POS system could be the payment counter, online shopping checkout page, self-payment kiosk, mobile POS, tablet POS, etc.When getting a POS system what 8 features should you consider? ›
- Shortcut keys. ...
- Wide choice of payment options. ...
- Omnichannel integration and management. ...
- Customer management tools. ...
- Mobility. ...
- Inventory management. ...
- Employee management. ...
- Reporting tools.
- Invoicing: Selling, Buying, Renting and Repairing.
- Inventory Management.
- Customer Orders and Suppliers Orders Management.
- Integrated Supplier Purchasing.
- Consistent and Customizable Reports.
- Multi-Store Management.
- Answer These 5 Questions Before You Research POS Systems. ...
- Choose A POS System That Makes Checkout A Breeze. ...
- Consider Your Inventory Management Needs. ...
- Decide What Additional Functions You Want Your POS To Provide. ...
- Identify The Types Of POS Peripherals You Will Need. ...
- Determine Which POS Security Features Your Store Needs.
A monitor, a barcode scanner, a customer-facing display, a cash drawer, a receipt printer, a keyboard, and a mouse. These are the devices you should add to your point of sale system for its proper functioning.
What POS Does Starbucks Use? Starbucks uses Oracle Symphony, a POS solution designed for the restaurant industry. Oracle has been around since the 70s and has established itself as a leading provider of cloud-based solutions for businesses.What are the 5 hardware components of a POS system? ›
- Barcode scanner. A POS with a barcode scanner is a must for busy retail stores. ...
- Receipt printer. Paper-based receipts are becoming less popular with customers – particularly for low-value purchases. ...
- Scale. ...
- Kitchen/order printer. ...
- Cash drawer. ...
- Customer-facing display. ...
- Card reader.
Ask yourself, how long do you want this system, how will it improve your bottom line, and how will it impact your overall customer outreach. All of these questions will aid in determining your POS System budget.Why should I get a POS system? ›
A POS system speeds up your checkout process significantly. By having a centralized database of your products, pricing, and customers, you can quickly find the products, assign the order to a customer, and apply discounts with little effort.What are three things the POS system does? ›
- Payment processing. Payment processing is what most people think of when they hear the term POS system. ...
- Transaction management. ...
- Sales reporting. ...
- Inventory management. ...
- Customer relationship management. ...
- Employee management.
To meet these demands Walmart has built a custom POS solution for their stores, making use of SUSE Linux Enterprise Point-of-Service (SLEPOS), a secure open-source operating system for point-of-sale client devices, as a foundation.What are 2 popular types of operating systems? ›
An operating system (OS) is a program that oversees the processes on a desktop, laptop, tablet or mobile device. Microsoft Windows, Mac OS and Android are some of the more popular operating systems on the market.How much does a POS system cost? ›
What is the average cost of a POS system? The average cost of a POS system is between $0 and $2,000, including hardware, software, installation fee for the first year. Then, you may pay around $1,000 per year to use the POS system later, depending on business size, revenue stream, and feature enhancements.What is a basic POS system? ›
A POS system, or point-of-sale system, is a set of devices, software and payment services merchants use to make sales in person. A POS system manages customer purchases, accepts payments and provides receipts. A point of sale is also where a merchant and customer conduct a retail transaction.What is simple POS system? ›
A POS system allows your business to accept payments from customers and keep track of sales. It sounds simple enough, but the setup can work in different ways, depending on whether you sell online, have a physical storefront, or both. A point-of-sale system used to refer to the cash register at a store.
Its features include inventory management, payment processing, customer relationship management, reporting and analytics, workforce regulation, sales tracking, accounting and bookkeeping on a centralized platform. You can install a POS system locally as an on-premise solution or access it via the cloud.What are two advantages of a POS system? ›
In general, a POS system helps you improve your operations for your customers. This includes reducing waiting time, faster scanning of items, quicker payments, etc. With these operational improvements, customers will tend to get better service and come back to your store for their next purchase.What are the features of a smart POS? ›
- Tracking Inventory. With LithosPOS, you can track your inventory levels in real time. ...
- Barcode Scanning. Barcode scanning makes it easier to manage your inventory. ...
- Stock Keeping Unit. ...
- Managing Customer Data. ...
- Customer Loyalty Programs. ...
- Email Marketing. ...
- Real-Time Sales Data. ...
- Custom Reports.
Your POS system should give you the ability to:
Keep track of your customers' purchase history. Capture customer information such as name, age, birthday, phone number and email address. Use email marketing to keep in touch with customers.
Yes, a POS can help you to analyze customer data. You can use a POS to track customer purchases and see what items are popular. You can also use a POS to create customer profiles and track customer loyalty.How does a POS system improve efficiency? ›
A POS system eliminates transaction mistakes with the technology to ring up customers' purchases using a scanner for bar codes, instead of the cashier having to manually enter the SKU number or the price of each item, which would be the case if you were still using a cash register.What is a POS system and why do retailers need one? ›
POS software is the operating system you use to manage physical stores and sell in person. It's what store staff use to find products, add them to a customer's order, and accept payments. POS software also has helpful tools like sales reporting, inventory management, and integrated loyalty programs.How many components are there in the POS system? ›
A point of sale system includes two parts – hardware and software together. They are the must-have factors in your plan for POS system cost. Besides, there are also common aspects in POS pricing merchants should never overlook.What does POS stand for name 3 components of a POS system? ›
Summary. Point of sale (POS) systems are computerized networks used by retailers to process customer sales transactions. A POS system typically includes hardware, such as a cash register or electronic point of sale terminal, and software that tracks inventory levels, customer data and sales information.What POS system does McDonald's use? ›
McDonald's uses the NewPOS NP6 system, also known as the McDonald's NP6, MediaWorks NewPOS, or MW NewPOS (as well as Torex or Savista NewPOS). The NP6 runs a version of Microsoft Windows XP Embedded.
The food chain is deploying Ziosk POS systems at a select number of restaurants, with plans for a full rollout by the end of the year. Ziosk provides Android-based POS tablets. These tablets will be placed at each table, and will allow diners to pay for their meal from their seat without notifying the wait staff.What POS system does Dunkin Donuts use? ›
Dunkin' Brands selects Radiant Systems (www.radiantsystems.com) as the exclusive POS technology provider for its U.S. Dunkin' Donuts restaurants. Franchisees will be offered a fully integrated Radiant solution, including software and hardware for POS, order confirmation and kitchen displays.What are the five 5 types of hardware? ›
There are five main hardware components in a computer system: Input, Processing, Storage, Output and Communication devices.What are the 4 main hardware devices? ›
There are four main computer hardware components that this blog post will cover: input devices, processing devices, output devices and memory (storage) devices. Collectively, these hardware components make up the computer system.What are the four 4 common hardware functions? ›
There are four main equipment functions of a computer system: Input, Processing, Storage and Output.What is the standard POS system? ›
Standard POS is a point of sale application that offers a wide range of functionality, from handling payments and printing receipts to managing your store. With a focus on small business, the app has all the power and functionality necessary to help improve the efficiency of your retail shop.What does a good POS system do? ›
Ideally, your system should create detailed sales reports, complete with charts and graphs. It also should have an easy-to-comprehend dashboard that provides sales, cash, and inventory data in real time.What is a POS system in retail? ›
Point-of-sale (POS) software FAQ
Point-of-sale systems work by collecting and recording data from every purchase made at a retail store. They then use this data to generate vital transaction reports that allow businesses to track sales data, and manage credit card processing, customer history, inventory, and more.