A point-of-sale (POS) system is a tool that allows businesses to accept payments and manage business operations. There are many types of POS systems, each with features catering to different business types. Each POS system also has different compatible hardware and operating systems. POS systems range in price from free to around $100 per month.
Types of POS Systems
Small business with limited budgets wanting a flexible and portable POS
Traveling vendors or retailers wanting to process transactions on the sales floor
Businesses wanting to speed up the ordering and checkout process
Any small business wanting to access reports and POS data from anywhere
Businesses with abundant technical resources to create and maintain a custom system
Retailers who sell online and in person and need to sync stock levels
Fast food and fast casual food businesses and retailers with self-checkout
Why Use a POS System?
A POS system allows businesses to process payments safely and securely and to track data associated with each transaction. POS systems also mitigate human error and integrate with other business functions, including inventory and CRM, to manage operations and reporting more effectively.
Features in Different Types of POS Systems
Each POS system has different features. The features a POS will have depends on what type or size business the system is made for. For example, retail POS systems will have inventory tracking with product variants. Restaurant POS systems will have tools to track customer seating. Sometimes features are included in the main pricing; other times, small businesses will have to pay extra fees for more advanced or additional features.
Some of the main features of POS systems include:
Inventory management is important for retailers and restaurants alike. Most POS systems have features to enter in specific products, including information like pricing, retail markup, and quantity on hand. These systems also track inventory as it is sold so on-hand quantities are up to date. More detailed POS systems have inventory features like low stock alerts and automated purchase orders. Others also offer third-party integrations with inventory management software.
Customer relationship management (CRM) features allow businesses to create and nurture relationships with customers and prospects using email marketing and other tools. Most POS systems have features to build a customer directory with profiles including contact information and purchase history. Some POS systems have additional built-in CRM features, including feedback collection tools or loyalty programs. Most POS systems also integrate with third-party CRM software.
Staff management is an important component if you have employees. Most POS systems have features to create individual employee logins or profiles with permission levels. Some systems also include features like time tracking, scheduling, and basic communication tools.
Almost every POS system will provide basic reporting, including sales totals broken down by day, week, month, and other intervals like time of day or day of week. Most systems also include basic reports to track inventory levels and sales by employee. More expensive systems include advanced reporting on product type or departments, inventory valuation, and stock reordering reports. The most advanced POS systems have analytics features that allow businesses to create custom reports and view more advanced forecasting.
POS apps sometimes have slimmed-down features from a full-blown POS terminal. Often, additional features also come with extra fees. They also require you have a compatible mobile device.
However, POS apps are the most affordable type of POS. They are also typically the easiest to use. You can get started with some for free—all you need to pay is the processing fee when you make a sale. Others require a minimal startup or monthly fee. POS apps are cloud-based, meaning you can access the information from any connected and compatible device.
This type of POS is great for small businesses that frequent event sales or lack a permanent location. It’s also ideal for new businesses with smaller budgets.
Popular POS apps include:
- Square POS: A free POS app that is best for new and small businesses, particularly those needing an offline payment option.
- PayPal: A very basic free POS app for accepting payments on the go with low processing fees.
- ShopKeep: An affordable and simple iPad POS app for small retailers, cafes, and specialty shops.
- Lightspeed: A POS for retailers and restaurants with an iPad app option; best for medium-sized businesses wanting customizable analytics and built-in stock ordering.
- Shopify: A POS app for iOS and Android that connects in-person sales with a Shopify online store.
Mobile POS Systems
Mobile POS systems, also referred to as mPOS, are similar to POS apps in that they provide flexibility in terms of location. The difference here is the term mPOS encompasses the hardware and software of a mobile POS system, whereas POS apps just refer to the software.
A mobile POS also doesn’t specifically limit the software to an app. While most mobile POS systems do use apps and popular hardware like iPads and the iOS operating system, some mPOS providers rely on proprietary hardware.
mPOS is a larger investment than a POS app because it requires more advanced hardware, rather than a simple card reader. mPOS systems range from $60 per month and above.
Mobile POS systems are cloud-based and helpful for retailers and restaurants that want to boost associate presence on the floor and make the checkout experience more convenient for customers. In restaurants, for example, an mPOS might allow for tableside ordering or even payment. In retail, this can help you drive more sales so customers don’t have to wait in line or seek out a register. Like POS apps, an mPOS can also come in handy for event sales, such as markets, festivals, and similar off-site temporary retail opportunities, as well as food trucks.
Popular mobile POS apps include:
- Clover: A mobile POS system for retail, restaurant, and service businesses with a variety of proprietary hardware options that can be configured to accept payments throughout the sales floor or dining area.
- Vend: A mobile POS for retailers that works on iPads so associates can assist customers throughout the sales floor, plus a mobile app for scanning inventory.
Touch Screen POS Systems
A touch screen POS system works on different types of touch screens, including tablets, smartphones, computers, and other compatible devices. Some touch screen POS systems come with their own native touch screen hardware in lieu of a third-party device.
Touch screens are more expensive than other types of POS systems. Prices start around $150 and can go up as high as a few thousand dollars for higher-grade models.
A touch screen POS is a great option for small businesses in the food industry, both in the context of allowing customers to place their own orders and having associates take their orders with the device. Touch screens are typically easy to use and intuitive, especially when you’re dealing with a younger demographic that is used to using tablets and smartphones.
Popular touch screen POS systems include:
- Toast: A restaurant touch screen POS for taking orders tableside, managing seating and turnover, and a kitchen display system for tracking and preparing orders through the kitchen.
- TouchBistro: A touch screen POS for cafes and restaurants with features for tableside ordering, table mapping, and employee management.
- Upserve: A touch screen POS for restaurants to manage guests with tableside options, reservation management, and table mapping.
Cloud POS Systems
Cloud point-of-sale (POS) transactions happen in person, and payment processing happens in the cloud. These are wireless, online POS systems that connect to Wi-Fi so it can sync data to the cloud. This data is then accessible from any compatible device. Prices for cloud-based POS systems range from $0 upfront to a few hundred dollars per month.
You can typically get a full feature set with a cloud POS. Though some features may require additional fees, it’s a flexible type of online POS system for any growing business. Most modern POS systems are cloud-based, though there are some legacy or free open source POS systems that are locally stored or license-based, so the systems and data are only accessible from the single device or local network.
Cloud and online POS systems are ideal for hotels, restaurants, and retailers alike. Small businesses with multiple POS systems or even locations benefit from a cloud POS, as data will sync to a centralized database, giving you a holistic view of your business. Cloud POS is also valuable for temporary retail, so you can send that information back to your data HQ.
Examples of popular cloud POS systems include:
- Revel Systems: A cloud POS for larger restaurants that offers centralized inventory and reporting data.
- Shopify: An online POS for retailers that centralizes customer, order, and inventory information from in-person and online sales.
Open Source POS Systems
An open source POS system is built on software that small businesses can modify and customize to their needs. These POS systems require technical and development resources. You might also hear the term “open API” when discussing open source POS systems.
You can find some open source POS systems for free, while others come with costs typically lower than other types of POS.
While at first glance they may seem cost-effective, the necessary resources to run an open source POS add up. It also requires more maintenance and updates over time. This is why open source POS systems are ideal for larger enterprises or extremely tech-savvy small businesses. Larger enterprises typically have more custom and unique needs, along with bigger budgets, which makes them the perfect candidate for an open source POS.
Examples of open source POS systems include:
- Floreant: A free, downloadable, open source POS for restaurant businesses that is locally installed and offers complete customization or an out-of-the-box setup.
- WallacePOS: A free, web-based, open source POS for cafes and general retailers.
- Unicenta: An open source POS for larger retail, hospitality, and specialty businesses like hardware and general stores.
Multichannel POS Systems
Multichannel POS systems can process transactions and integrate the data across multiple commerce channels. Many work with both online and in-person sales channels. Advanced multichannel POS systems work with retail and ecommerce sales, as well as social selling, third-party marketplaces, and other commerce channels. The price for a multichannel POS ranges from free to get up and running to $100 to $200 per month, depending on the features you need.
Multichannel POS systems are helpful for retailers that have both an ecommerce store and some sort of in-person selling component, be it a brick-and-mortar store, temporary retail, or event selling. They help product-based businesses avoid stockouts by syncing inventory levels across channels.
Popular multichannel POS systems include:
- Shopify: A combined ecommerce platform and POS system that also syncs with online marketplaces like Amazon and eBay, plus social media sales for growing retailers.
- Brightpearl: A POS system that seamlessly connects with multiple ecommerce platforms and marketplaces for centralized data and order management for expanding retail businesses.
- Square: Square POS connects with Square Online Store for centralized management that is best suited for a small business like vendors, cafes, and food trucks.
Self-service Kiosk POS Systems
Self-service kiosk POS systems are made so customers can place orders and pay for products and services themselves, without the help of an employee.
You typically see these as digital touch screens at restaurants and cafes, particularly fast food and fast casual businesses. Self-service kiosks help shorten lines and waiting time. Some even allow customers to process their own payments. Self-service kiosks typically cost $50 to $100 per month each.
In the retail environment, self-service kiosks have popped up in the self-checkout you typically see in grocery stores. With this, shoppers can scan their own items and pay for their entire order themselves, also shortening the checkout period and giving customers more control over their experience.
Popular self-serve kiosk POS systems for small businesses include:
- Revel Systems: A restaurant POS with customizable hardware configurations, including self-serve or self-order kiosks for restaurants.
- Toast: A restaurant POS with self-service or self-order kiosks.
- TouchBistro: A cafe and quick-service restaurant POS with self-service kiosks.
Types of POS Systems Frequently Asked Questions (FAQs)
There are countless POS systems on the market, all with different features and price points. While they all serve the same primary purpose (processing transactions and managing business data), they all look and function a little differently. Below are some of the most frequently asked questions about various types of POS systems.
What are the different types of POS devices?
There are many different types of POS devices, including smartphones, tablets, mobile POS, card and chip readers, touch screens, computers, self-service kiosks, and terminals. Other POS-related devices include barcode scanners, cash drawers, keyboards, receipt printers, and more.
What type of POS is used in restaurants?
POS systems with table mapping, menu management, and tableside ordering are ideal for restaurants. Many systems will also offer ingredient-level tracking, order modifications, and menu costing. Self-service kiosks, mPOS, cloud-based systems, and touch screens are also well-suited for food-based businesses.
What kind of POS is used in retail stores?
Retailers need POS systems with a specific focus on inventory management features, including low stock alerts, purchase orders, and advanced analytics reporting. mPOS, cloud-based POS, and multichannel POS are best for retail businesses.
There are many different types of POS systems available for small businesses. In many cases, you’ll use two or more of the types of POS systems (such as a mobile POS and a touch screen POS), depending on the context. POS apps, mobile POS, touch screen POS, cloud POS, open source POS, multichannel POS, and self-service POS share many features. Each has a time and place, thanks to varying features, pricing, and use cases.