What is a POS System? Everything you need to know
“Quick Summary” Five years ago, if someone would have asked you about using a POS system, you might have given the most obvious answer “it's a luxury I can’t afford.”
However, we’re past that era.
We live in a fast-paced world with myriads of responsibility, starting from management of the business to marketing and its administration. Therefore, using a traditional billing or accounting system would be a not-so-smart move toward business growth.
To be precise, not many businesses are aware of the POS system, but yes, most of them are inching towards leaner systems that function across all smart devices and are easy on the pocket.
Surveys predict that by 2025, the global POS system market is expected to reach $29.09 billion.
Are you someone who is planning to adopt a POS System or researching about a POS system for your office presentation? You have come to the right place.
To know what exactly is POS and why businesses are switching to POS exponentially, keep reading!
What is a Point of Sale (POS) System?
Now let us ask you a question? Do you carry cash everywhere - in restaurants, retail shops, malls, or theaters? We assume you don’t! 77% of consumers prefer using debit and credit cards to make payments.
That means, as a businessman if you only accept cash, you are losing customers and, in turn, your income.
Owning a POS system in your retail store or for your restaurant business’s success is the right thing to do. Reasons? The POS system is not just necessary to carry out payments. It is also useful to track your inventory, measure sales, manage customers, and generate invoices.
A POS system is a software and hardware system that can help you accept multiple forms of payments like cash, credit cards, and mobile payments.
If your business doesn’t allow you to stay in one place, you need a POS system that's as agile as you. In this case, you have the facility of using a mobile POS system.
According to Statista, the transaction value in the Mobile POS Payments segment is estimated to reach US$2,007,997m in 2020.
Key Features of a POS System
The companies providing POS systems have a diverse selection of packages available to suit different kinds of businesses. Be sure to look out for customized software to fit your specific business requirements.
Below are some of the critical functions of a POS system:
Receive Payments
Most POS systems facilitate both cash and card payment. They also enable you to record and store your customer payment data either in the cloud or on a local server, depending on the system you choose with the POS system. Before purchasing a POS for your business, make sure that it is enabled with mobile point-of-sale systems.
Gift Cards & Loyalty
Integrate your gift cards with the POS system and accept them as an alternate payment form. By leveraging loyalty programs, your customers can take advantage of loyalty points or rewards.
Inventory Management
You can track the items which are out of stock or need to be added. You also have the option to reorder certain things when the inventory gets low automatically.
Employee Management
Point of Sale empowers you to ensure that the employee’s identity is verified for clock-ins. Most importantly, for functions including void transactions and returns to minimize theft and enhance productivity.
The best part is you can add special notes to a transaction, like adding your customer’s address and other product requirements.
Using the POS system is not as difficult as it sounds or is asserted by others. Both setting up and using it are as easy as ABC.
Don’t believe us?
Read how to process cash and card payments on a POS and decide on your own.
How to Process Cash Payments With the POS System
Most retailers have a tablet POS system with a visual interface for entering product information. When a customer makes payment in cash, you can usually enter the number; then, your POS software will calculate the amount and show how much change is due to give back to the customer.
In today’s POS systems, the cash drawer is combined with the central computer or tablet software. The drawer opens up automatically as soon as you enter the paid amount on the screen. This way, it reduces the chances of theft and miscalculation.
How to Process Card Payments With the POS System
There are mainly two methods to accept cards at a till point, through manual entry and automatically via a linked-up system. These methods require a card reader, a standalone terminal for manual entry, or an integrated terminal for a linked-up system. Regardless of its terminal type, it requires an internet connection via a WiFi, phone line, and built-in SIM card.
A standalone card terminal is independent of the cash register, where you register all your transactions. There is no connection between your POS system and the standalone terminal. This means when you’ve totaled up all the items to sell on the screen or cash register, you have then to enter the cumulative amount on the card machine keypad.
After that, a terminal connected with the merchant bank, and the card issuer will complete the transaction. Once the transaction is confirmed, it will print a receipt or approve it with a beep sound or a message saying the payment is received.
An integrated terminal is attached to the POS software, so when you enter products on the till screen and pick the card payment option, the central software will send the transaction amount to the card terminal.
Here, the card machine will show the payment amount automatically. The integrated machine will process the transaction over the internet or phone line, and print a receipt, if applicable.
Final Takeaway
If you are still using an Electronic Cash Register (ECR) and a separate credit card terminal, it’s high time you upgrade to a complete point of sale system. It lessens the expense of doing business while increasing productivity and improving transparency.
OVVI specializes in customized, complete POS solutions: hardware and software. Let us help design the befitting one for your business.