Types of POS Systems: A Guide for Small Businesses
Meaghan has provided content and guidance for indie retailers as the editor for a number of retail publications and a speaker at trade shows. She is Fit Small Business’s authority on retail and ecommerce.
This article is part of a larger series on POS Systems.
A point-of-sale (POS) system is a tool that allows businesses to accept payments and manage business operations. 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, and receipt printers.
Each type of POS has features catering to different business types. POS systems, which range in price from $0 to around $100 per month, also have varying compatible hardware and operating systems.
Here’s a quick overview of the different types and when they’re used:
Types of POS Systems | Used by: |
|---|---|
POS Apps | Small businesses with limited budgets wanting a flexible and portable POS |
Mobile POS Systems | Traveling vendors or retailers wanting to process transactions on the sales floor |
Touch-Screen POS Systems | Businesses wanting to speed up the ordering and checkout process |
Cloud POS Systems | Businesses wanting to access reports and POS data from anywhere |
Open-source POS Systems | Businesses with abundant technical resources to create and maintain a custom system |
Multichannel POS Systems | Retailers who sell online and in person and need to sync stock levels |
Self-service Kiosk POS Systems | Quick-service restaurants and casual food businesses with self-checkout |
Continue reading below for details on the different types of POS systems including pros and cons, pricing, and popular options.
If you’re looking for an industry-specific type of POS for your business, try one of our guides:
- Best Retail POS Systems
- Best POS Systems for Restaurants
- Best Spa & Salon POS Systems
- Best Food Truck POS Systems
- Best Cafe POS Systems
- Best POS Systems for Convenience Stores
POS Apps
POS apps are cloud-based programs that you can download onto any compatible mobile device; you can access your POS information from any of these compatible POS devices. Some apps are available on multiple platforms, while others are specific to Android or iOS. There are also iPad-only POS apps.
They typically have slimmed-down features from a full-blown POS terminal, and additional features often come with extra fees. POS apps are still the most affordable type of POS overall—and they’re also typically the easiest to use.
The ability to use a mobile app to get “a single view of customer, product, inventory, price, promotion, and order data” is one of the top five features retailers look for when choosing a new modern POS system.
| PROS | CONS |
|---|---|
| Flexible for making sales on the go, at events, or on the sales floor | More limited features than a full-blown POS system |
| Significantly lower cost than a full POS system | Cybersecurity can be a concern |
| Easy to stay up-to-date with technology and software updates | Hardware is generally a phone or tablet—not as durable as dedicated POS hardware |
Since POS apps are generally a smaller investment than a full system, they’re a great fit for new or small businesses with smaller budgets. They’re also ideal for those that frequent event sales or lack a permanent location. Some POS apps include features like a calendar and appointment-setting for professional service providers like tradespeople who work on the go.
Typically, POS apps are best for:
- New businesses
- Small-scale service providers
- Mobile sellers
You can find POS apps with basic features for free, or paid versions ranging from about $30 to $150 per month.
Popular POS apps include:
Read our guide to the best POS apps to find the right solution for your business.
Mobile POS Systems
A mobile POS (or mPOS) system is best for retail merchants or restaurants that need a more full-featured system than an app but still want the flexibility to process transactions from anywhere. Vendors like food trucks, service providers, or traveling retailers are best suited for an mPOS system. These platforms are also a great solution for merchants who need to process both online and in-person transactions.
Most retailers are interested in mPOS, especially when it comes to empowering associates. A 2021 report identifies mobile POS as a top POS priority for retailers, with 41% planning to implement a unified commerce platform (store, mobile, web) within three years.
Did You Know?
According to estimates, the total transaction value for mPOS payments will reach $2.9 trillion in 2022.
| PROS | CONS |
|---|---|
| Access business data from anywhere with cloud-based storage | Requires more investment than a standard POS |
| Easier to integrate new hardware than with a traditional POS | Some mobile POS systems only work with the iOS operating system |
| Process payments either on the go or at a brick-and-mortar shop | Devices are at a greater risk of being lost or stolen than a traditional POS |
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 drive more sales so that customers don’t have to wait in line or seek out a register. Like POS apps, an mPOS can also come in handy for food trucks and event sales (such as markets, festivals, and similar off-site temporary retail opportunities).
mPOS systems are similar to POS apps because they provide flexibility in terms of mobility. The difference here is that a POS app refers to the software, while mPOS encompasses both hardware and software. Most mPOS systems use apps and hardware like iPads and the iOS operating system, while there are some providers, like Clover and Square, that offer proprietary hardware.
Mobile POS systems can boost in-store sales, especially as consumers grow increasingly comfortable with mobile payments. The average mobile transaction value per user in the US is expected to increase from $1,920 in 2022 to $2,560 in 2025.
Related: Best Mobile Credit Card Processors
Typically, mobile POS systems are best for:
- Food trucks
- Retailers needing to sell on the go or on the sales floor
- High-volume restaurants wanting to speed up service by giving servers handheld systems
- Markets and temporary vendors
You can find a few mPOS systems with no software fees, but most cost around $60 per month. Popular mobile POS systems include:
Read our guide to the best mobile POS systems
Touch-screen POS Systems
This type of POS system works on different types of touch-screen devices, including tablets, smartphones, and computers. Some touch-screen POS systems come with their own native touch-screen hardware in lieu of a third-party device.
Touch-screen POS systems allow restaurant employees to take tableside orders and ensure orders are correct. The intuitive design of touch-screen software makes it easy for both customers and employees to use.
| PROS | CONS |
|---|---|
| Streamlined interface to make transactions quicker | Touch screens are more expensive than other types of POS systems |
| Intuitive design makes learning the system easier | Touch-screen system subscription plans can be expensive |
| More customizable than traditional POS systems | Not all touch-screen POS systems are both Android- and iOS-compatible |
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.
Typically, touch-screen POS systems are best for:
- Fast-paced businesses like restaurants and high-volume retail stores
- Any business needing a system that’s easy to train employees on
While touch-screen POS hardware can range from a few hundred to a few thousand dollars, the software for each terminal is typically $50 to $200 per month.
Popular touch-screen POS systems include:
Read our guide to the best touch-screen POS systems. If you want systems that specifically work on Apple hardware, see our guides to the best iPad POS systems and best iPad restaurant POS systems.
Cloud POS Systems
Cloud-based POS devices record transactions in real time, so you can access your data quickly from anywhere with an internet connection. This is great for multilocation businesses, like restaurants, hotels, and retailers.
Upgrading to a cloud solution is another POS priority for retailers—in fact, more than half (54%) of retail executives plan to adopt cloud-based POS technology by 2024. Businesses are already well into this transition; in 2021, the cloud POS market exceeded $3 billion and is expected to grow at a compound annual growth rate (CAGR) of over 20% through 2028.
Small businesses with multiple POS systems or locations benefit from a cloud POS, as data syncs to a centralized database (like temporary retail, so you can send that information back to your data HQ), giving you a holistic view of your business. Many cloud-based POS systems also include real-time inventory updates, which is helpful for retail merchants with multiple stores to track product levels.
| PROS | CONS |
|---|---|
| Access it from any compatible device, anywhere, anytime | Subscription fees can be costly |
| Update software easily to stay up to date with technology | Requires a reliable internet connection to use |
| No software installation costs | |
Cloud point-of-sale (POS) transactions happen in person, and payment processing happens in the cloud. These wireless, online POS systems connect to Wi-Fi, so they can sync data to the cloud, which is then accessible from any compatible device.
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 a single device or local network.
Typically, cloud POS systems are best for:
- Businesses wanting to access inventory, sales, or reporting data from anywhere
- Businesses wanting to save on hardware costs
- Businesses wanting a flexible setup
Prices for cloud-based POS systems range from $0 upfront to a few hundred dollars per month.
Examples of popular cloud POS systems include:
To find a cloud POS for your business, read our guide on the best user-friendly cloud POS systems.
Open-source POS Systems
While at first glance it may seem cost-effective, an open-source POS requires resources to run that can 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. For small businesses with technical and coding skills, open-source POS systems can be an attractive option because they are often a free or low-cost investment.
| PROS | CONS |
|---|---|
| Open-source POS systems are significantly lower in cost and sometimes even free | Requires technical skills and/or resources |
| Easily customizable to fit unique business needs | No built-in customer service or support |
| Some open-source POS systems don’t include payment processing | |
An open-source POS system is built on software that small businesses can modify and customize to their needs—you might hear the term “open API” when considering open-source POS systems. These POS systems require technical and development resources.
Typically, open-source POS systems are best for:
- Businesses needing a highly customized solution
- Enterprises or big businesses with a large tech budget and/or development staff
Examples of open-source POS systems include:
See our guide to the best open source POS software to find the right one for your business.
Multichannel POS Systems
Retailers that make both online and in-person sales need a solution to integrate and manage business data from one place. Multichannel POS systems are helpful for those that have both an online store and some sort of in-person selling component, be it temporary retail, event selling, or a brick-and-mortar store.
They help product-based businesses avoid stockouts by syncing inventory levels across channels. This is especially important for maintaining accurate business data, especially as the lines between online and offline commerce continue to intertwine.
| PROS | CONS |
|---|---|
| Access and manage data from all your sales channels in one place | Pricing models can be confusing, as prices sometimes differ between online and in-person sales |
| Offers convenience for customers by expanding purchasing options | Managing multichannel sales successfully can be challenging for new or small businesses |
Multichannel POS systems can process transactions and integrate the data across multiple commerce channels. Advanced multichannel POS devices work with retail and ecommerce sales, social selling, third-party marketplaces, click and collect, and other commerce channels.
Typically, multichannel POS systems are best for:
- Retailers and storefronts that also sell online
- Mobile vendors wanting to grow sales through social media or online sales
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.
One of the most popular multichannel POS systems is Shopify:
Shopify
Shopify is a combined ecommerce platform and POS system that syncs with online marketplaces (like Amazon and eBay) and social media channels. It is best for cross-channel inventory management and ecommerce and multichannel retailers.
- POS Cost: Free with your ecommerce plan; brick-and-mortar locations cost an additional $89 per month, per location
- Processing Fee: 2.7% + 0 cents, lower fees available with certain plans
- Learn More: Read our Shopify POS review
Read our guide to the best multichannel POS systems to find the right one for your business.
Self-service Kiosk POS Systems
Casual restaurants and cafes with simple menu options are a good fit for self-service kiosk POS devices because they reduce lines and wait times. In the retail environment, they have popped up in the self-checkout you typically see in grocery stores. With this, shoppers can place direct orders, scan their own items, and pay for their entire order themselves—shortening the checkout period and giving customers more control over their experience. This is especially helpful for minimizing person-to-person contact.
Related: POS Integrations: What They Are and Why Your Business Needs Them
Self-checkout is a key customer engagement priority for retailers, with many businesses considering self-service kiosks for customer returns. This is in line with the growth of buy online, pick up in-store (BOPIS).
| PROS | CONS |
|---|---|
| Puts customers in control of making sure their order is correct and aligned with their preferences | Customization options for ordering can be limited |
| Reduces ordering wait times | Investing in the hardware can be expensive |
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.
Typically, self-service kiosk POS systems are best for:
- Quick service restaurants
- Markets, grocers, and cafes selling made-to-order and ready-to-eat items
- Hotels wanting to accept room charges as payment
- Airport and other restaurants where patrons are on a time crunch
- High-volume restaurants wanting to speed up turnover times with tableside payments
Self-service kiosks typically cost $50 to $100 per month each.
Popular self-service kiosk POS systems for small businesses include:
See the best self-service kiosks to find a solution for your business.
Features in Different Types of POS Systems
Each POS system has different features depending on what business type or size the platform is made for. For example, retail POS systems will likely have inventory tracking with product variants, while restaurant POS systems will have tools to track customer seating. Sometimes the features are included in the main pricing; other times, you have to pay extra for more advanced or additional features.
Some of the main features of POS systems include:
Inventory Management
Lightspeed has robust inventory management features with its POS system. (Source: Lightspeed)
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 that 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)
Square customer engagement includes email marketing and feedback management. (Source: Square)
CRM system 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.
Check out these resources to learn more about CRM:
- Best Simple CRM Systems
- Best Free CRM Software for Small Business
- Customizable CRM: The Best Options
Employee Management
Toast offers streamlined payroll management with its POS. (Source: Toast POS)
Staff management is an important component if you have a team. Most POS systems include features to create individual employee logins or profiles with permission levels. Some systems include additional tools like time tracking, scheduling, and basic communication platforms.
Check out more resources about employee management:
Payment Processing
Square Payments allows for in-person, online, and over-the-phone payment processing. (Source: Square)
Every modern POS has the ability to process payments—it’s a matter of finding one that accepts a wide range of payment types. As payment technology advances, consumers have more convenient choices for how they pay for goods and services. Cash is less and less prevalent, and credit and debit cards account for 40% and 30% of POS payments, respectively. It’s up to merchants to have technology that can adapt to those payment preferences, including credit and debit cards, e-checks, mobile wallets, and digital currencies.
Get more help with payment processing for your small business:
- Best Restaurant Payment Processors
- Best Retail Payment Processors
- Cheapest Credit Card Processing Companies (+ Fee Calculator)
Reporting
Clover POS provides robust sales tracking and POS analytics reports. (Source: Clover POS)
Almost every POS system will provide basic reporting, including sales reports and totals broken down by day, week, month, and even time of day. Most systems include basic reports to track inventory levels and sales by employee. More expensive ones include advanced reporting on product type or departments, inventory valuation, and stock reordering reports. Meanwhile, analytics features that allow businesses to create custom reports and view more advanced forecasting are available with the most advanced POS systems.
Check out more resources to learn about reporting with your POS devices:
Bottom Line
There are many different types of POS systems to help you run your small business. In many cases, you’ll use two or more types of POS systems (such as an mPOS and a touch-screen POS), depending on your business’s needs. POS apps, mPOS, 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.
