It’s hard to believe that it was only about 25 years ago that retailers began replacing their standalone, hard-wired credit card readers with the first software-based point of sale terminals. Since that time, advances in cloud-based POS technology have made the traditional standalone POS terminal obsolete.
Yet many retailers still find themselves depending on older POS systems to complete customer transactions. What are they missing by not upgrading to a new cloud-based POS system? And what might cause them to believe they’re better off keeping their current POS system, even if it’s outdated?
If you’ve been asking, when the right time is to upgrade your store to a modern, mobile POS solution, then it’s time to explore the pros and cons of a POS upgrade. Chances are, you’ll conclude that the time is now.

Comparing Traditional vs. Cloud-Based POS Systems
The first generation of software-based POS systems relied on a traditional client-server architecture; so-called “dumb” POS terminals were linked via cable to the servers that ran the POS software. Credit card readers, receipt printers, barcode scanners, and other peripheral devices attached to the POS terminals via cables.
Maintaining this setup proved to be a chore for retailers because the various product, price, and inventory databases had to be loaded and updated on the server. In addition, most upgrades and patches to the POS terminals had to be applied manually. Simply confirming that the server and workstations were properly configured and functioning required a great deal of time and effort. Last but not least, stores had to confirm that their financial data and their customer’s sensitive information were adequately protected.
The arrival of cloud computing and the software-as-a-service (SaaS) model in the early 2010s permanently altered the POS landscape. In contrast to the closed, hard-wired nature of traditional POS systems, cloud-based POS is characterized by openness and mobility. Your store’s crucial data is stored securely in the cloud, where it can be accessed and updated from any mobile device 24/7.
The two primary benefits of the open architecture of modern POS systems are the ability to integrate many retail-management functions, and the mobility that cloud-based POS makes possible:
- Open application programming interfaces (APIs) allow new functions such as deliveries, online ordering, and contactless payments to be added to the POS system via simple plug-in modules.
- Using custom apps running on mobile devices and customer-facing kiosks brings the store to the customer and opens the retailer to new venues beyond the store itself.
Aspects to Consider When Upgrading to a Cloud-Based POS System
The first step in planning a POS system upgrade is understanding how your business operates. Every aspect of the POS solution is geared to facilitating not only customer transactions but also inventory management, sales analysis, employee management, invoicing, and other back-office functions. However, the most important component of a modern cloud-based POS system is its customer relationship management features.
Retail customers are driving innovation in all aspects of the industry by demanding new ways to shop and pay for their purchases. The advent of omnichannel marketing obliterates the distinction between online retail and in-store shopping. Customers expect the stores they frequent to support their preferred method of payment, whether paying online and picking up curbside, using contactless credit cards, or paying via prepaid gift cards and loyalty rewards.
Perhaps the most valuable customer-driven trend for retailers is the shift to mobile shopping via the store’s website, an app running on smartphones and tablets, or customer-facing kiosks. All of these activities rely on an intuitive and easy-to-use interface that delivers an enjoyable customer experience regardless of the customer’s tech-savviness.
These are three areas where cloud-based POS options edge out older POS systems:
- Scalability and versatility: The SaaS model allows cloud-based POS software to be updated on the fly and to add and change features as the needs of the business dictate.
- Aesthetics: Traditional POS terminals take up a great deal of prime retail space, and they require that customers congregate around the checkout stand as they wait to make purchases. By contrast, mobile POS systems complete customer transactions where and when the customer prefers.
- Price: The SaaS subscription model means stores can implement cloud-based POS systems without requiring any big upfront expenses. Retailers are able to pay as they go and grow their POS system along with the business.
Breaking Down Traditional vs. Cloud-based POS System Prices
Before investing in any technology, retailers have to understand how and when their investment will translate into profit, whether by increasing revenue or reducing costs (or both). For cloud-based POS systems, the cost-benefit analysis begins by choosing between an all-in-one approach or a modular approach:
- Buying a turnkey POS system means relying on the vendor for support, maintenance, and upgrades. The set-and-forget approach to POS may bring peace of mind, but it locks businesses into long-term contracts, and they may find themselves paying for more functionality than they need.
- Choosing a cloud-based POS system offers advantages in terms of easy changes and upgrades, and paying only for the services you use. However, ensuring that the components of the system function well together requires working with a POS vendor who possesses the knowledge and expertise to help you avoid potential pitfalls.
When it comes to POS systems, there is no one-size-fits-all solution. Finding the perfect POS system for your store begins by finding a partner who takes the time to understand your store’s unique needs and works with you to craft a POS approach offering the features you need today and the room to grow tomorrow, at a price that fits your budget. Your POS system becomes the foundation of your business’s day-to-day operation.