How Much Does a POS System Cost?

What POS systems cost

POS software costs 

POS software can cost as little as $10 or as much as $400 per month, depending on the features you want. A basic POS system with one card reader will be much cheaper than POS terminals spread across different points and multiple locations. 

Merchants can choose an on-premises POS system or cloud-based POS software. The latter is cheaper and more popular among merchants and restaurant owners. 

POS hardware costs

Businesses that process payments in person, tableside and on the go have several hardware devices to choose from. A basic POS station uses a tablet or touchscreen, credit card reader, receipt printer and cash drawer to accept payments. 

Some businesses might only need a mobile card reader, while others require a variety of POS hardware spread across different locations. With POS hardware, you incur an upfront cost that can be as little as $20 to around $5,000, depending on your needs.

Additional POS system cost factors to consider

Outside of POS hardware and software expenses, several other fees are associated with a POS system. Here’s a look at the big ones.

• Payment transaction fee: This is charged for each transaction made with a credit or debit card. Typically, it’s a couple of percentage points of the customer’s purchase plus a few cents. For instance, Square’s processing fee is 2.6 percent plus 10 cents for every swiped transaction, 2.9 percent plus 30 cents for invoices and e-commerce payments, and 3.5 percent plus 15 cents per transaction for virtual terminal and keyed-in transactions.
• User accounts: Most POS software packages cover a set number of staff accounts. The more logins you need, the more you may have to pay. Some POS vendors offer unlimited accounts to stand out from their competitors.
• Extra hardware: Whether you need more registers or additional card readers, extra hardware will cost you more.
• Software plan upgrades and add-ons: POS systems are much more than payment processors. They can manage inventory, automatically reorder stock, and provide access to custom reports. But all those extra features aren’t free. The number of features you want will dictate your monthly cost. Lightspeed, for example, has several packages, with pricing from $69 a month for its basic plan to $199 a month for its advanced plan.

Types of POS systems by cost

Whether you are a one-person retailer or have several stores, there is a POS solution for you. Depending on your needs and budget, you can find one on the cheap or spend a ton of money. With that in mind, here’s a look at the offerings available at different price points. 

Mobile payment processing

Mobile payment processors provide you with a card reader that attaches to your mobile phone. Usually, the card reader is free and you pay per swipe. Here are some things to keep in mind if you’re considering this type of POS system:

• Pricing depends on volume. Average swipe fees are around 2.7 percent if you choose a processor that doesn’t charge any other fees. Some may charge a certain monthly subscription fee for a lower swipe rate. Most do not require a long-term contract so you pay as you go. Avoid signing long-term contracts for any type of credit card processing — most companies will give you the option of month-to-month terms if you ask.
• Many mobile processing apps are free. Typically, these include a product catalog, basic inventory tracking and customer management tools. More features may be available as paid add-ons.
• Many companies offer a free card swiper. However, these are often basic models that only read the magnetic stripe on payment cards. You should plan on purchasing an upgraded model that accepts chip cards and contactless payments. This will protect you from liability for counterfeit fraud that occurs at the point of sale and enable you to accept contactless cards, Apple Pay and Google Pay.
• Hardware options are often available. Many mobile processing apps are compatible with hardware like receipt printers and barcode scanners (some are Bluetooth enabled). Most of these card readers also work with the iPad or Android tablets (with 4G) in addition to the iPhone and Android phones.

Here are some of the options for mobile payment processing: 

• Square: This mobile POS processor is ideal for growing businesses, as it doesn’t charge account maintenance fees. You pay a flat rate per transaction, which makes it affordable if you are accepting a couple of sales a day, but it can also grow with you as you expand. When reviewing Square, we found that its free POS app is rich in features, enabling you to accept payments, offer discounts, and track inventory, among a host of other things.
• PayPal: PayPal is a popular mobile payment processor, enabling small business owners to accept credit, debit, and PayPal payments on the go. Through our review of PayPal, we found the company offers flat-rate pricing and pay-as-you-go terms, which can save you money if you don’t process that many credit card payments per month.
• QuickBooks Online: QuickBooks Online from Intuit is popular accounting software for small businesses, and it includes the ability to accept payments. QuickBooks offers a ton of features and integrations at an affordable price, which is why, after reviewing QuickBooks Online, we recommend it as one of our best picks.

Applicable businesses: These systems are a great option for any small business, including farmers market and art fair vendors, small restaurants, freelance contract workers, and small retail shops or kiosks. However, they are most cost-effective for businesses that process less than $5,000 per month.

Tablet and online POS (iPad and Android)

Tablet and online POS apps are increasingly popular. Upfront costs are minimal if you already own the hardware. 

• Most charge a monthly fee for software. Some providers charge a low monthly subscription rate and allow you to choose your own credit card processor. Some allow you to use the app if you use the company’s credit card processing services. Look carefully at what the plan supports and what features it includes.
• Monthly plans are usually available. Most POS software providers do not require a long-term contract, and instead offer a choice of month-to-month or annual upfront payments. You get more flexibility with a month-to-month plan, but you may be eligible for discounts with an annual subscription.
• They come with a lot of POS features. Many of these apps include inventory tools, customer management, reporting options and other POS features. 

These are some of the available tablet and online POS options:

• TouchBistro: TouchBistro is a leading POS provider for the hospitality market, serving all sizes of restaurants. Its POS software is affordable and has a ton of built-in features. In our review of TouchBistro, we found it to be a standout for restaurant owners for its robust inventory management, tableside ordering and payment processing tools, and online ordering options. You can also easily create loyalty and rewards programs with TouchBistro.
• Toast: Toast is an all-in-one POS system that comes with everything necessary to run a restaurant or cafe. The vendor offers a variety of hardware, such as handheld devices and contactless kiosks. The cloud-based software also has a ton of restaurant-friendly features. In our review of Toast, we found you can easily manage seating and menus, track inventory, run reports, and get actionable analytics and insights.
• Lightspeed: A POS provider for the retail and restaurant industries, Lightspeed offers customers an impressive set of hardware and software options. Lightspeed’s standout features include tableside ordering, inventory and customer management tools, and third-party integrations. In our comprehensive review of Lightspeed, we found it to be an affordable and feature-rich POS system.

Applicable businesses: This type of POS is often used by coffee shops, food trucks, boutiques, small and midsize retailers, professional service providers, salons, pet groomers, and quick- and full-service restaurants.

All-in-one POS for payment processing

These POS systems are most often touchscreen terminals with associated POS software, barcode scanners, receipt printers and cash drawers.

• Free hardware offers require noncancelable contracts. Some companies provide the POS system for the cost of shipping and a monthly service fee (usually about $29 to $39 per month per terminal). But you must agree to a long-term, noncancelable contract that includes a credit card processing agreement. Contract terms are typically three to five years.
• Hardware may be proprietary. Some POS companies, like Clover, require you to purchase their proprietary hardware, pay a monthly software fee and process payments through their service. Depending on the company, the contract may be flexible. Some include migration services, installation assistance, backup services and training.

Clover is one option for an all-in-one POS provider because it gives customers access to an array of affordable hardware. 

Our review of Clover found that you get fast credit card and digital payment processing; the ability to accept orders online, curbside, or via mobile devices; and easy-to-create loyalty programs, all for an affordable price. 

Applicable businesses: These systems are often scalable. One terminal would fit in a boutique, quick-service counter, large retail store or full-service restaurant. Since these systems require a greater commitment, we recommend speaking with a consultant to tailor your solution to your business.

Traditional POS systems

This option costs the most upfront, but it allows you to choose exactly what you want. In most cases, you can choose your own hardware, software and payment processing service to create a custom solution. In some cases, this type of POS allows you to continue working with your current credit card processor.

• Upfront costs are high. The initial costs for one terminal start around $1,500 and go as high as $5,000, depending on your needs. Most offer a service agreement or extended warranties if you need them.
• Many peripherals are available. Many full-service POS companies offer a wide variety of peripherals, such as age verifiers, kitchen printers, omnidirectional grocery scanners and scales, and handheld inventory devices. Some are compatible with other types of POS systems, such as the tablet and online systems we discussed above. 

Applicable businesses: A traditional POS suits any business that has the startup funds for it and the desire to customize a POS solution. Some of these services are also helpful if you just need to add peripherals to your existing system. Most provide point-of-sale consulting should you require assistance.

The pros and cons of free POS systems 

Some POS vendors lure you in by offering “free” POS terminals. But going the seemingly free route may cost you more in the long run than if you’d paid for the equipment. Here are some pros and cons to consider first. 

Pros

• No cost to get started: The biggest benefit of free POS systems is that there are no initial startup costs. This could be beneficial to new businesses that need a POS system but don’t have a lot of money to spend.
• Easy to set up: Free POS systems tend to be easy to set up and don’t require a lot of technical knowledge. The software is fairly intuitive, and these systems are usually run on devices you’re already familiar with like a tablet or smartphone. 

Cons

• Contacts: Typically, to get the POS vendor’s deal, you must sign a contract for its credit card processing service that locks you in for one to three years. You’ll also be on the hook for a monthly maintenance or insurance fee in addition to the credit card processing fees and your POS monthly subscription rate.
• Minimal customer service: If you do run into problems with your POS system, you may have very few resources available to help. Phone support is often reserved for higher-tiered plans, and some companies may not allow you to submit a support ticket. 

Jamie Johnson contributed to this article.