A point of sale is a software and hardware system that allows a business owner to conduct transactions. Payment processing, as well as staff, customer, and inventory management are all common features of the software. A web-enabled device that can run the POS software, as well as transaction instruments like a receipt printer and a cash drawer, are included in the POS hardware. Point of Sale financing can be relatively inexpensive or expensive depending on their features, and they always charge a fee for processing payments.
Let us now find out the basic POS definition, all about point of sale financing, and what are the features associated with it.
Definition-Point of Sale
Let’s start with a basic definition of a point of sale system before we get into the nitty-gritty of what makes a point of sale system work. As previously stated, a point of sale is a location where sales are made. To put it another way, it’s the software and hardware required to process transactions.
The physical or digital location of the point of sale is up to you. A POS system, for example, could be found in a physical store or on the payment page of an ecommerce website. The point of sale at a physical store will consist of hardware with software installed that allows the merchant to complete a transaction. The point of sale on an ecommerce platform, on the other hand, is software that works independently of the hardware.
In either instance, the POS system will enable your company to take credit card payments and perform a range of back-office tasks. It’s important to note that a point-of-sale system is not the same as a credit card processing system. A credit card processing system is part of a point of sale system, but the POS can also handle a range of other tasks in addition to credit card processing.
The additional services that your point of sale financing system can perform are determined by the POS provider you select. Retail, restaurant, and ecommerce firms can choose from a selection of industry-specific POS providers. Depending on which POS system you choose, you’ll have access to a wide selection of features that can help you grow your business.
Let’s take a look at all of the features that a POS system can provide.
Features of point of sale system
Let us now find out features associated with the POS system
Payment Processing
When we state that your POS needs to be able to perform transactions, processing payments is a key component of it. Online payments or card magstripe reading are the minimum requirements for your POS system. However, if you’re serious about expanding your business, your point-of-sale system must be able to accept a variety of new payment methods. After all, you don’t want to miss out on a sale by refusing to accept a customer’s preferred payment method. Let’s go over all of the many sorts of payments that your point-of-sale system might accept:
1. Online processing
If you run an ecommerce business, a point-of-sale system that only accepts online payments could be ideal for you. A point of sale system that works online—with clients submitting their card information to pay for your business’s product or services—could be all you need if you don’t need to conduct any in-person transactions.
However, online processing has its own set of requirements, particularly in terms of security. Make sure that any online POS system you use has a secure payment gateway and that your client’s payment information is encrypted. Otherwise, your company’s and customers’ financial information may be compromised.
2. Magstripe
If your firm conducts transactions in person, however, your point of sale system must be capable of processing physical card payments. The swipe of a credit card magstripes is the most basic and universal in-person payment technique. Fortunately, magstripes payments may be made with nearly any sort of card reader. When you sign up for a POS service, some even provide a free magstripes reader.
3. Chip Cards
Most modern credit cards have embedded microchips in addition to magstripes, which provide increased security measures. While magstripes make cardholder information easy to acquire and duplicate, chip cards use a unique code to protect cardholder information during transactions. Your credit card reader must accept EMV payment, which is a global standard for chip-based debit and credit card transactions, to accept payment from cards containing a chip.
EMV payments are made by inserting a credit card into a slot in a card reader and allowing the microchip to be read. Offering EMV payment to your customers will give them peace of mind. A dual magstripe and EMV reader are included in many current credit card readers.
4. Contactless payments
Finally, embracing contactless payments will make your consumers’ checkout experience much more convenient. Because many people are transferring their payment information to virtual credit card apps like Google Pay and Apple Pay. Customers can provide payment information by holding their mobile device near a near-field communication (NFC) scanner using these apps. NFC scanners are becoming more widespread on credit card readers, however, they usually come at a premium.
Overall, accepting NFC, EMV, and magstripe payments ensures that you can satisfy your clients regardless of their preferred payment method.
Transaction Management
The ability to make transactions easy for you, your employees, and your customers is the next feature you’ll want in your POS system. While there are numerous aspects to ensuring that your transaction processes are as simple as possible for all parties involved, there are a few characteristics in particular that your point of sale should be able to assist with:
1. Receipts
Your business’s point of sale should be able to provide receipts in whatever format your customers want. Do they want a paper receipt or a digital one? They should have the option of receiving a text or email receipt. Alternatively, if customers prefer a paper receipt, your POS system should be able to generate one immediately.
2. Tipping
With an easy-to-use tipping experience, your point of sale should make tipping a breeze. This is a must-have for service-oriented enterprises. Suggestions for tipping and pre-calculated percentages, as well as a personalized tipping option, will be included in the most user-friendly point of sale financing systems.
Reports
Another feature that is quickly becoming standard on point-of-sale systems is the ability to gain important insights based on transactions that have been processed through your POS. You should be able to monitor real-time sales data and run reports on your labor costs, product profitability, and individual staff performance, among other things. The top point of sale financing systems will also allow you to produce bespoke reports based on your own specifications. These reports let you discover your company’s strengths and weaknesses so you can alter your approach as needed.
Employee Management
A point-of-sale system will be used by both you and your employees. As a result, it should include features that make managing your employee a breeze. If your company relies on a team of employees to keep things running on a daily basis, the following point-of-sale capabilities will save you a lot of time:
1. Timing management
Your staff will be able to clock in and out through the POS with several top-tier point-of-sale systems. You won’t have to collect or reconcile hours, and your employees will have the autonomy they need to accomplish their jobs successfully. Work schedules can also be created within the POS system.
2. Commission and tip reconciliation
Employees are usually given a unique identification number when they are entered into your POS system. When they clock in and out, as well as when they conduct a transaction, they will use this ID number. You should be able to assign tips and commissions to staff based on their ID numbers in your POS system, which should keep track of who is accountable for specific transactions.
Inventory Management
Your point of sale financing system should assist you in automating and optimizing inventory management in your firm. Point of sale systems—at least the finest ones—keep track of where your inventory is now located by the nature of processing the outward movement of your business’s inventory.
This can be done in a variety of ways depending on your POS system. Let’s look at two of the most typical inventory management capabilities found in POS systems:
1. Reminders
When particular inventory stocks are getting low, most POS systems allow you to schedule reminders. You’ll be able to place an order before supply runs out and remove the item from your catalog until the new stock comes.
2. Orders
Some point-of-sale systems go even farther, allowing you to place inventory orders directly from the software. If your firm receives a notice to replenish inventory, you can simply push a few buttons on your POS to do it. Remember that you’ll need to onboard your vendors into your POS system first.
Customer Relationship Management
You’ll be able to track transaction history, take notes, and potentially contact customers all through your point of sale if your POS system supports this capability. If your business relies heavily on repeat customers, using a point of sale with this feature could significantly increase your client retention rate. Furthermore, some POS companies include add-ons that integrate with your CRM database to help you retain customers.
Hardware for point of sale financing system
Let’s look into POS hardware now that we’ve covered what POS software can do. Although online merchants just require POS software to process transactions, those that wish to accept in-person transactions will require POS hardware. Your individual business circumstances will determine what you require and how much you require.
Retailers, for example, can use an internet-connected device, a terminal stand, a credit card reader, a receipt printer, and a cash drawer to run their business. Restaurant owners, on the other hand, may choose to invest in a kitchen printer and display screen. If you sell on the go, a mobile credit card dongle that connects to your phone and allows you to process payments through your POS software would suffice. To put it another way, what you require is determined by your individual business circumstance.
Pricing for point of sale system
Let us now find out the pricing and charges associated with the point of sale financing system
1. Payment processing fees
Payment processing fees are included in almost every point of sale option you’ll find. These costs will be assessed by your company based on the number of transactions you make, the size of each transaction, and the type of card the consumer uses to pay. Note that the payment processor, not the POS provider, determines these fees.
The payment processing fee for in-person transactions will be a % of the transaction value. The payment processing cost for ecommerce transactions will be a proportion of the transaction value plus a minor flat-rate fee.
2. Software cost
Many point-of-sale systems will charge your business for using their software in addition to payment processing fees. This means that in order to use the features of point-of-sale systems, you’ll have to pay for the software that allows you to do so.
This fee is almost always paid on a monthly basis. You may, however, be able to obtain the software for a one-time flat fee. Many point of sale financing companies also gives a variety of software options, with higher-cost plans resulting in lower payment processing rates.
3. Hardware cost
Finally, practically every point-of-sale system has a hardware cost associated with it. Accepting credit card payments necessitates the use of point-of-sale hardware.
The hardware for your point of sale system will almost certainly cost your business a one-time lump payment, whether it’s something as simple as a smartphone plugin or as huge as a complete countertop register.
Final words
Now that we’ve covered everything there is to know about point of sale financing systems, the only issue that remains is which one is best for your small business.
Hopefully, you now have the knowledge necessary to answer that question for yourself. Consider what your company needs to complete transactions, how your consumers want to pay, and how much you are willing to invest. Then do some research into the best point-of-sale systems available.
Remember that a POS system’s ultimate objective is to make your life easier. So, whichever alternative you choose, be sure they can function as a business partner and collaborate with you as you expand.
