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Pricing: How Much Does a New POS System Cost?

Donna Fuscaldo
Donna Fuscaldo
Senior Finance Writer

There are more affordable point-of-sale systems available than ever before. Here's everything you need to know how much a POS system costs.

With point-of-sale systems, there are now more options at affordable price points than ever. Businesses can choose to purchase or lease, and there are hundreds of customization options that can make your company's next POS system into exactly what you need.

The exact cost of a POS system depends on what kind of software and hardware your business will need, as well as how much customization you'll be doing. In addition, much of the cost variance comes from credit card processing rather than the hardware or software, especially with regards to small businesses. Since there are so many options, discerning the difference can be challenging.

To help, we've put together a list of the types of options available, with general pricing information. We've also included applicable business types and a short list of suggested POS providers. Using this information, you can decide which option might fit your budget and requirements.

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What does a POS system typically cost?

A POS system is made up of hardware that captures the payment and software that accepts and processes it. Some merchants only need one POS terminal while others need several. The POS hardware can include a cash draw, credit card reader, barcode scanners, receipt printers, and devices that capture signatures. The functionality of the software ranges from processing payments to reordering inventory.

When it comes to the pricing, expect to pay separately for the hardware and software. Hardware can be purchased outright or leased. Prices range from a couple hundred dollars to a couple thousand dollars depending on your needs. Keep in mind if you choose to lease your POS hardware, often you're locked into a contract that can typically last one to three years. You also tend to pay more for the convenience of leasing.

POS software can cost as little as $10 to around $250 a 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 multi locations. Merchants can choose between an on-premise POS system or one that resides in the cloud. The latter is cheaper and more popular among merchants and restaurant owners.  [Ready to purchase a POS system? Check out our reviews and recommendations.]

What are the POS system cost factors?

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

  • Payment transaction fee: This is the fee charged for each transaction made with a credit or debit card. Typically, it’s a couple of percentage points plus a few cents. For instance, Square's processing fee is 2.6% + 10 cents for every swiped transaction, 2.9% + 30 cents for invoices and e-commerce payments, and 3.5% + 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 help them stand out from rivals.

  • 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 so much more than processing payments. They can manage inventory, automatically reorder stock, and provide access to customized reports. But all those features aren't free. The number of features you want will dictate your monthly cost. Lightspeed, for example, has several packages, with pricing starting at $69 a month for its basic plan to $229 a month for its advanced plan.

What are the types of POS systems based on 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 do it 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. [Read related article: Buying a Retail POS System? Here's How to Choose the Right One]

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 may vary based on the volume of your transactions. Average swipe fees are around 2.7% if you choose one that doesn't charge any other fees. Some may charge a monthly subscription rate for a lower swipe rate. Most do not require a long-term contract; 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 and have basic POS features. Typically, these include a product catalog, basic inventory tracking and customer management tools. Additional features may be available as paid add-ons.

  • Many companies offer a free or very affordable ($10 to $15) 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 will 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.

Popular mobile payment processors include Square, PayPal and QuickBooks Payments.

Applicable businesses: These are a great option for any small business, including farmer's market and art fair vendors, small restaurants, freelance contract workers, and small retail shops or kiosks, but are most cost-effective for businesses processing 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 (ranging from $30 to $75 per month for a basic plan, and $120 to $230 for an advanced plan) and allow you to choose your own credit card processor. Be sure to look carefully at what the plan supports and what features it includes. Others allow you to use the app if you use the company's credit card processing services.

  • Monthly plans are usually available. Most POS software providers do not require a long-term contract and 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.

  • Features are more robust. Many of these apps include inventory tools, customer management, reporting options and other basic POS features. Some tablet and online POS options are Vend, Revel Systems, Epos Now, Square and Lightspeed.

Applicable businesses: This solution is often used by quick-service restaurants, coffee shops, food trucks, boutiques, small and midsize retailers, professional service providers, salons, pet groomers, and full-service restaurants (integrated with a full restaurant POS for tableside ordering and payment processing).

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, like Harbortouch, 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 and Square, require you to purchase their proprietary hardware, use their software (which often comes with a monthly fee) and use their payment processing service. Depending on the company you work with, though, the contract may be flexible. Some come with migration services, installation assistance, backup services and training.

Applicable businesses: These systems are often scalable. One terminal would fit in a boutique, quick-service counter, large retail store, and full-service restaurant. Since these systems require a greater commitment, we recommend you speak 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 option allows you to continue to work with your current credit card processor.

  • Upfront costs are high. Initial costs for one terminal can start as low as $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 discussed above. Some full-service POS companies are SunrisePOS, POS Guys, POS Nation and International POS.

Applicable businesses: This option suits any business that has startup funds and a desire to customize a 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.

Is there a free pos system?

Some POS vendors will lure you in by offering so-called free POS terminals. But often going the seemingly free route will cost you more than if you purchased the equipment on your own. Typically to get the deal you must sign a contract for the POS vendor's credit card processing service, which 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.

Any business, whether it has a dollar in startup capital or thousands, can now easily acquire a POS system that suits its needs. Since price is mostly tied to credit card processing for small businesses, we recommend  you pick out a few solutions that will work for you and then compare transaction rates and fees (monthly, monthly minimum, PCI compliance and gateway). Many services will even match rates, so it is worth trying to negotiate; a few percentage points could save you thousands in the long run.

Image Credit: LDprod/Shutterstock
Donna Fuscaldo
Donna Fuscaldo
business.com Staff
Donna Fuscaldo is a senior finance writer at business.com and has more than two decades of experience writing about business borrowing, funding, and investing for publications including the Wall Street Journal, Dow Jones Newswires, Bankrate, Investopedia, Motley Fool, and Foxbusiness.com. Most recently she was a senior contributor at Forbes covering the intersection of money and technology before joining business.com. Donna has carved out a name for herself in the finance and small business markets, writing hundreds of business articles offering advice, insightful analysis, and groundbreaking coverage. Her areas of focus at business.com include business loans, accounting, and retirement benefits.