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 brief 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.
These POS options are listed from lowest to highest in terms of upfront costs.
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. Pricing may vary based on the volume of your transactions. Average swipe fees are around 2.75 percent 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 have at least basic POS features, like a product catalog, basic inventory tracking and customer management tools. Receipt printers are available (some are Bluetooth enabled), or you can email your customer the receipt from the app. Most of these card readers also work with the iPad or Android tablets (with 4G). Popular mobile payment processors include Square, PayPal and QuickBooks Payments.
Many companies offer a free or very affordable ($10 to $15) card swiper, or you can purchase your own.
Applicable businesses: These are a great option for any small business – farmers market or art fair vendors, small restaurants, freelance contract workers, etc. – but are most cost-effective for businesses processing less than $5,000 per month.
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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. These apps can process sales via Wi-Fi connection or 4G. Some charge a low monthly subscription rate (ranging from $40 to $60 per month for a basic plan, and $120 to $160 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. [See how you can accept credit card payments anywhere on our sister site.]
Others allow you to use the app in exchange for paying per swipe. Most 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. 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 and Lightspeed.
Applicable businesses: This solution is often used by quick-service restaurants, coffee shops, food trucks, boutiques, small and midsize retailers, professional services, 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 agreement
These POS systems are most often touchscreen terminals with associated POS software, barcode scanners, receipt printers and cash drawers.
Some companies, like Harbortouch, provide the system for the cost of shipping and a monthly service fee (usually about $50 to $80 per month per terminal) if you agree to a long-term, noncancelable contract that includes a credit card processing agreement, typically three to five years.
Others, like Clover, require you to purchase their proprietary hardware, pay a monthly fee for the software 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 or at a quick-service counter, as would a few in a large retail store or full-service restaurant. Since these systems require a greater commitment, we recommend that you speak with a consultant to tailor your solution.
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. 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 full-service POS companies offer a wide variety of peripherals as well, such as age verifiers, kitchen printers, omnidirectional grocery scanners and scales, and handheld inventory devices, including some that 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.
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 that 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.