What is a POS system?

Point of Sale (POS) systems are a way to process sales in person and streamline inventory management.

POS hardware includes card payments and/or cash payments can be received through devices like card readers and cash registers. Barcode scanners and receipt printers are a part of a comprehensive POS system.

POS software often has an inventory system where SKUs are given prices and a stock count. This can allow the system to communicate low-stock alerts and strong-performing products. For hospitality, it’s possible to manage seating space, hotel room occupancy, and generate tickets for kitchen staff.

How much does a POS system cost?

The price of a POS system is made up of fixed and variable costs in three main categories:

• Hardware (often fixed and up-front)
• Software (often ongoing, such as a monthly subscription)
• Processing fees (charged as a % of each transaction)

When it comes to software costs, prices can vary from being free to a couple of hundred pounds per month. Annual payments sometimes yield a discount, but these costs are intended to cover server, cloud, and support costs borne by the provider.

Hardware is sometimes included in the monthly bundle fee or offered at a standalone price. Sometimes a pre-configured bundle can be cheaper, such as having a display, cash register, printer, barcode scanner, and card reader. Usually, add-ons are available for items like a customer-facing display and equipping multiple locations.

Processing fees can either be a fixed percentage + flat fee for all transactions (i.e. 1.7% + 10p) or vary depending on the card used which is typical if using a 3rd party payment processor. Chargebacks can often cost around £10.

Additional costs to consider are features and modules that are behind a paywall, customisation, and support packages. Enterprise solutions can create bespoke pricing, but may also come with implementation, maintenance, or even training costs.

Types of POS Systems

What makes a good POS system?

A good point of sale (POS) system should make it easy for you to accept and track payments from your customers in person. Whether you need to accept these payments at a fixed till or have a portable POS system for taking payments anywhere on your premises depends on the nature of your business.

Due to the differences in business types, one POS system may be great for one business but cause users to pull their hair out in other businesses.  This is the whole point of this article – looking at the best POS systems based on:

1. The business size (e.g. the number of staff you employ and how many of them need to take payments)
2. The size and diversity of the stock you need to manage and sell
3. The type of business (e.g. retail, hospitality etc)
4. Your budget
5. Hardware preferences

We’ll also be covering what makes each of these POS systems unique, running through their pros and cons as well as suggesting what kind of businesses they’re most suitable for. 

Standard POS Hardware

Display Unit

A screen that shows the information from a product, service, checkout basket, or transaction. This unit can face the cashier and/or customer.

Registers

Central to the POS system, registers are the computing power and point of connection for other components to connect to.

Card Terminals (desktop and mobile)

Devices that securely read and accept payments from either cards (Chip & PIN or Contactless) or mobile phones (NFC). These can be a remote device, built into the register or merely the software on a smartphone.

Cash Drawer

The secure drawer that stores cash from cash transactions. It’s connected to the POS system, which can automate its opening.

Receipt Printer

The device that prints transaction receipts for customers to take away as proof of a purchase. These can often have templates, branding, and additional information like a Wi-Fi code.

Barcode Scanner

A scanner (either handheld or static) that reads barcodes and identifies products to the POS system.

Hospitality-Specific POS Hardware

Self-Ordering Kiosks

Interactive computers, often with a large display, where customers can process their own orders and payments.

Kitchen Display Units

Screens that show real-time orders and food prep instructions for kitchen staff.

POS Software Features

Checkout System

Core to a POS system, this is where products are accrued into a basket, a price is tallied up, taxes are calculated, and discounts can be applied.

Payment Processing

Securely process payments from a variety of methods, such as in-person Chip & PIN, online cards, invoices, and potentially keyed-in over the phone. The POS system communicates with the payment gateway/processor who transmits data to the card issuer or bank for authorisation.

Marketing Tools

Features that help increase sales or awareness, such as CRM and keeping track of customer loyalty points. This is often through a partner, like Nectar or in-house like Tesco’s Clubcard.

Inventory Management

A database and data pipeline where stock is counted, automatically updated upon sales and chargebacks, and reports are generated to optimise stock management. This may be by highlighting seasonality, where stock could be lower during winter.

Staff Management

Features that allow for managing employees’ schedules, tracking their hours, controlling their access, and communicating with HR. This may also be used for commissions and bonuses, as well as checking for missing cash during a certain shift.

Reporting & Analytics

Lots of data is entered and held on a POS system, and good data analysis can provide insights into customer behaviour, staff behaviour, the market, operational efficiency, and business performance KPIs.

Omnichannel system

Some businesses sell in stores and online, and an omnichannel system helps centralise this data and streamline the orders, inventory management, and data. It simplifies accounting but can be combined with analytics to show performance between different revenue streams.

Customer Relationship Management

A CRM helps collect customer data, often for marketing purposes. This data can be analysed to reward loyalty, reach out to customers who have disappeared for a while, or generally personalise customer experience.

Multi-location management

Features that help synchronise data between different outlets or franchises. A different POS system for each location would waste time, so these features help manage a sub-POS system for each location, but keep them connected.

Loyalty program

Features that help reward loyalty to help increase repeat customers. This can be as simple as “for every four coffees, the fifth is free” across any of the franchised outlets.

Table or menu management

A restaurant may have 30 items on its menu and 60 seats for customers, so strong features are needed to help alert a waiter that a certain dessert is out of stock, or perhaps speed up a table’s bill because they’re going to clash with a reservation.

How to choose an EPOS system

Budget

Budget is a key constraint when implementing a new system. In order to effectively assess whether a POS system is within your budget, all costs must be factored in.

Upfront costs, hardware, monthly fees, transaction fees, plus any accessories required need to be taken into account. Also, weigh up if subscribing to a more expensive plan will save money in the long run by reducing the transaction fees. Longer-term contracts will also come with cheaper monthly fees and potentially lower transaction fees.

Preferred Payment Processor

Consider whether you are happy to use the EPOS provider’s integrated payment processing services (i.e. Square POS has fixed transaction fees). Otherwise, with some EPOS providers, you can use an external payment processor which can often have cheaper card processing fees (i.e. use Epos Now for the POS hardware and software and integrate with Worldpay for payment processing).

Hardware required

EPOS providers will either offer their own proprietary POS hardware, hardware from other manufacturers, or a combination of the two.

Software features required

Powerful reporting and staff analysis may sound appealing, but it can come at a high cost. Consider what value you can get out of such insights. On the other hand, if you’re a small solo store with ambitious growth plans, consider future-proofing your decision with a versatile cloud solution.

Contract period

Longer contract periods will often reduce monthly or annual software fees. SCome EPOS providers will also offer lower transaction fees when longer contracts are agreed.

Software integrations

Integrations can be a deal breaker, particularly when it comes to existing accounting software. Consider any immediate deal breakers, but also future scope for integrations (i.e. e-commerce for a fashion outlet with plans to expand).

What are the benefits of using a POS system?

A POS system can have many advantages. An immediate benefit can be for the customer, who may now have more payment options, to have a faster and potentially interactive experience. 

For the business, intuitive payment processing, seamless accounting integrations, inventory tracking and real-time analytics are all significant benefits of the best POS systems.

Choosing the right POS system can help centralise data, optimise processes, and engage better with customers.