Many people still see point of sale systems as little more than cash register replacements. However, merchants realize that modern POS products are as similar to old-style cash registers as smartphones are to the rotary-dial telephones of the 1960s.
POS systems have evolved to become fully integrated business networks that combine with back-end accounting systems, credit card payment processing services, customer relationship management, and inventory management. They provide retailers with flexibility and easy customization by integrating with mobile devices and cloud services. The systems also connect with a growing range of peripheral devices, including contactless credit card readers, printers, tablets, and self-service kiosks.
The evolution of POS systems into full-blown retail management networks presents retailers with many more options, but it also complicates the purchasing process. Point of sale system prices vary significantly, based on their capabilities. With so many more possibilities to choose from, how do you find a POS system that offers the perfect mix of features and functions for your company’s needs at a price your business can afford?
Factors Influencing Point of Sale System Prices
Inc. notes that in the simplest terms, point of sale system prices represent the cost of the hardware and software, and the charge for payment processing. The least-expensive option is offered by mobile POS services that provide retailers with free hardware and software for reading credit cards using smartphones and tablets. All the transactions are processed in the cloud. The companies make money by charging retailers a payment processing fee for each transaction.
At the opposite extreme of the pricing scale are multi-terminal hardware/software solutions that charge a licensing fee of up to $800 to $1,200 per terminal, plus $300 to $500 to license each terminal’s payment processing software. These systems usually run on terminals the retailer already owns, and they operate on the premises rather than in the cloud (the terminals themselves cost between $2,000 and $3,000 apiece).
The cost of these high-end POS systems can be mitigated by purchasing refurbished terminals or by paying a monthly rental fee rather than buying the terminals. In addition to these costs, companies have to consider the expense of training employees to use the systems, and the price of any additional equipment they may need, such as printers or added registers. Finally, retailers must factor in maintenance and support fees that add another 15 percent to 20 percent to the purchase price.
How the Software-as-a-Service Model Reduces POS Expenses
Many small and medium-size retailers are discovering the advantages of adopting the Software-as-a-Service (SaaS) model for their POS system needs. Cloud-based POS services support mobile payments and often charge less than $100 for their hardware devices and an additional fee of $100 or so per month, plus a nominal charge per card swipe.
The SaaS pay-as-you-go model allows retailers to avoid paying for expensive equipment that may become out-of-date. It also makes it simple for companies to add new features and enhance existing ones, including support for new payment methods as they become available. PCMag highlights the importance of being prepared to meet the ever-changing demands of customers via features such as contactless payments, mobile payments, prepaid cards, loyalty discounts, gift cards, and surge pricing.
Dividing POS System Costs into Their Constituent Parts
The perfect POS system for one business will be the perfectly wrong choice for another. The first step in determining the optimum point of sale system price for your company is to consider these five factors, described by Tech.co:
- How many registers or locations will you need? Each added POS site increases the price of the hardware, software, and services for the complete system.
- What features do you need? Not all businesses require the full gamut of POS features, which include sales and inventory tracking, employee management, loyalty programs, gift cards, mobility, report generation, and industry-specific features such as links between the front of the house and the kitchen for restaurant POS systems.
- Which data analytics features will benefit your business? Advanced analytics can help streamline a large business’s processes, but the features can be overkill for small operations whose analytics needs are met with straightforward reports.
- Do you need any industry-specific features? For example, some shops will need to be alerted when inventory on certain items runs low, including automatic reorders when stock reaches specific thresholds.
- What are your plans for expansion? If a business’s long-term plans include adding a second location, its choice of POS system for its current site may need to accommodate integration with the new store once it opens.
When calculating the cost of POS software, these are among the important factors:
- Size: Along with the business’s physical layout, the cost of software may vary based on the number of items in your inventory and the amount of product turnover you experience.
- Number of terminals and locations: In general, the more checkout stands the business has, the more it will pay for POS software.
- Industry: The price of some POS vendor’s software varies based on the type of business. For example, some POS systems charge more for restaurants than they do for other types of retailers.
- Hardware compatibility: While most POS software integrates with various types of hardware, some proprietary equipment works only with the vendor’s own software.
The type of hardware used by the POS system has a great impact on the overall price:
- Tablets are used increasingly to run POS software for their mobility, versatility, and price, which at $170 to $300 each is much less than the cost of a standard POS terminal.
- Touch-screen monitors are another affordable alternative to full-size POS terminals; they cost from $160 apiece for 12-inch models to $190 each for 15-inch devices.
- Card readers come in portable and standalone versions, although contactless card readers cost more than swipe-only models.
- Receipt printers are being used less often as customers choose increasingly to have their receipts emailed to them.
- Barcode scanners are particularly useful for retailers with large inventories to speed up checkouts and improve the accuracy of inventory counts and other records.
- Self-service kiosks have upfront costs as high as $1,500 per unit, although some kiosks are available for as little as $300. Businesses must also consider the money the devices will save them by freeing employees to do other tasks.
The last category of point of sale system prices is the fee charged by payment processing services. Some POS system vendors offer credit card processing in addition to their flat monthly charge, usually totaling less than 2.4 percent per transaction.
Considering the incredible number of variables entailed in calculating the total cost of a POS system for your business, it is easy to lose sight of the many benefits the systems offer in terms of flexibility, more efficient business processes, and enhanced customer relationships.
Successful businesses understand the importance of keeping their customers happy, and increasingly, the key to satisfied clientele is meeting their needs by supporting the latest payment options. A retailer’s investment in POS systems is ultimately an investment in its customers.
Learn more about how the talech POS system helps retailers optimize their transaction processing and other business processes to boost profits and improve the experience for their customers. We work with you to determine the best ways to meet the needs of your customers and employees so your business can thrive. We take the time to learn your business so we can balance your specific needs with your budget and comfort level in a custom POS system implementation. The result is a valued investment that will pay for itself in short order. Reach out to us today to sign up for a free demo and learn more about how talech can be your valued partner in the POS world.
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