A point-of-sale (POS) system is the hardware and software that enables businesses to accept customer payments. As consumers become more mobile-centric, the POS industry has followed suit, offering mobile POS systems.
More than 40% of businesses use a mobile POS system, and 79% are small and midsize businesses, according to ConnectPOS. This article will look at how a mobile POS system works and how to choose one for your business.
What is a mobile POS system?
A mobile POS system is an app that runs on a smartphone or tablet. It operates in the same way as a traditional POS system, except it’s portable. A mobile POS system is an excellent option for business owners who need to accept on-the-go payments. In 2021, mobile POS transactions were expected to reach $468 million.
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The best POS systems are mobile or web-based. Although mobile POS apps used to be considered less powerful than legacy POS terminals, the software is improving quickly.
Mobile POS systems are generally smaller, cheaper and more convenient than legacy systems. Since mobile POS apps are software-as-a-service (SaaS) offerings, they are constantly updated, giving merchants access to the latest versions.
There are many reasons why a business would choose a mobile POS system. It’s a great choice for retailers with limited space and businesses that need a portal system.
FYI: A mobile POS with a tablet can improve the customer experience by maximizing space, speeding checkout and providing real-time inventory insights.
How do mobile POS systems work?
A mobile POS system works by plugging directly into your smartphone or tablet. You can use it to accept credit card or debit card payments, and the information is stored automatically.
Best of all, the app provides analytics so you can gain valuable business insights. A mobile POS system is more convenient for you and provides a better experience for the customer.
The benefits of mobile POS solutions
There are many benefits to using a POS mobile app. Here are some of the biggest advantages of using a mobile POS solution.
- Shorter wait times: Customers don’t like waiting in line. Mobile POS systems are faster and can dramatically reduce wait times.
- Increased sales: Simplifying and speeding up the transaction process for your customers could lead to increased sales. More transactions equals more money in your pocket, which is always a win for your business.
- Efficient and accurate transactions: When you meet your customers where they are, you boost the efficiency and accuracy of your transactions.
- Easy mobile wallet payment acceptance: Mobile wallet payments are becoming more common, and it’s easy to accept mobile wallet payments with a mobile POS system. Most mobile card readers have near-field communication (NFC) capabilities, so you get support for Apple Pay and Google Pay without needing any expensive upgrades.
- Email receipt capabilities: Increasingly, customers expect to receive digital receipts for accounting and bookkeeping purposes. The option to email receipts to your customers can be extremely beneficial for businesses.
- Improved customer experience: The convenience of mobile POS transactions can improve your customers’ experience with your brand. A consumer who has a seamless checkout experience with a company is more likely to return.
- Higher sense of security: Mobile POS systems enhance consumers’ sense of security. Instead of taking their card to another room, you can complete the transaction right in front of them. When consumers have complete control over their credit cards, they feel more secure in their payment transactions.
Tip: If you’re deciding between a cash register, POS system and mobile POS system, consider the features your business needs, including inventory management, payment flexibility and scalability.
The risks of mobile POS systems
Although there are many benefits to using mobile POS devices, there are also risks. Let’s look at some of the biggest downsides to consider.
Potential for unauthorized access
There is always the potential for unauthorized access to a POS application. To mitigate this risk, you should allow only authorized employees to access the mobile devices you use for your POS system.
The devices and POS app should also be secured with passcodes. The app should allow you to assign a unique user ID and passcode to each of your employees.
The fact is that most data breaches in companies of any size do not come from remote attacks, according to the Society for Human Resource Management. An enormous risk occurs when end users fail to follow policies and procedures.
Internal security risks happen when unauthorized users can access company hardware directly and when employees unwittingly participate in unsafe behaviors. Both of these situations can apply to mobile POS systems, doubling the need for strong authentication practices and solid training to help employees reduce risks.
Risk of disruption
Businesses that use a mobile POS system run the risk of disruption due to a poor internet connection, resulting in POS applications becoming unavailable.
This can be especially challenging for fast-paced businesses that need constant access to their POS systems. Ensure you have a stable and secure internet connection before using these systems for your business.
Chance of a cyberattack
There is also the chance of a cyberattack against your POS app’s back-end system or malware targeting your POS app. Security is an important factor, which is why you should choose a POS software company that takes great measures to ensure your information is safe.
Because security vulnerabilities can affect magstripe, chip and PIN, and contactless payments, it’s essential to use an EMV-compliant and NFC-enabled card reader rather than just a swiper.
Features to look for in a mobile POS system
The features you need in a mobile POS system depend on your business, industry, size and speed. These features are what distinguish a mobile POS system from traditional solutions. However, not all mobile POS software is created equal.
These are the standard functions you will likely need in a POS solution:
- Taking orders (and sending them to a kitchen, if applicable)
- Processing payments
- Managing employees’ roles and data access
- Tracking inventory
- Recording and reporting data
A mobile POS system grants you access to many other features beyond these general POS functions. You should look for these additional features in a mobile POS system:
- Inventory management
- Cloud-based data
- Multi-store functionality
- User-friendly interface
- Payment flexibility
You should also look for a mobile POS system that offers low transaction fees, integration with your existing systems and a high level of support.
The best POS hardware
To take advantage of your POS system’s features, you need the right hardware. A mobile POS system requires a mobile device to operate and hardware that can scan barcodes and read credit cards.
Barcode scanners are primarily necessary for companies with a proprietary barcode system or businesses that deal in large volumes. Mobile software systems can enable the device’s camera to function as a barcode scanner. The drawback is that this is often less reliable for large-volume scanning.
These are some of the companies that provide the best credit card readers for POS systems.
- Square: Square’s reader is compatible with iOS and Android devices, and it accepts all major credit cards. The hardware system includes a magstripe card reader, and the quality of this reader is a major reason why Square earned such a high rating from us.
- Shopify: With Shopify, you can process credit card transactions online and in person. This makes it a great option for businesses with online stores that periodically process transactions in person at events.
- PayPal: PayPal is a great option for businesses that accept credit card payments at various events. If you are just getting started and process a low volume of transactions, you can get the starter mobile card reader for free.
The best mobile POS system for your business
The best mobile POS system for your business will depend on your specific needs. Let’s look at some of the highest-rated mobile POS systems.
With Square’s mobile POS system, you can accept payments online, in person and over the phone. You’ll receive all the basic features you need to run your business, including payments, inventory, e-commerce and analytics.
Square accepts all major credit cards, and the reader lets you accept Apple Pay and Google Pay. After customers check out, you can email receipts to them.
Square does not charge any hidden fees, and its processing fees are similar to what other companies charge. You’ll pay 2.6% plus 10 cents per transaction and an additional 15 cents per keyed-in transaction. Learn more in our review of Square.
FYI: Apple Pay, Google Pay and Samsung Pay are the top three mobile wallets, but Venmo, Cash App and Zelle are gaining popularity as mobile payment options.
With PayPal, you’ll have the hardware and software you need to accept customer payments. When customers check out, you can easily select products, add discounts and issue receipts.
The hardware allows you to accept credit and debit card payments and manually enter payment information. You can also track your sales in real time and manage your inventory.
PayPal charges a flat 2.7% transaction fee, and keyed-in transactions are 3.5% plus 10 cents. There are no subscription fees or any other hidden fees to worry about. Learn more in our review of PayPal.
Shopify is a great option for retailers that sell online and in person. The mobile app works on iOS and Android devices, and the card reader makes it easy to accept customer payments.
However, Shopify does charge a $29 monthly fee for its services. The monthly subscription gives you access to retail reports, shipping labels and a free card reader. The company charges a 2.7% fee for in-person transactions. Learn more in our review of Shopify.
Jamie Johnson contributed to the writing and research in this article.