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Types of POS Systems

Updated Sep 21, 2023

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Point-of-sale (POS) options for businesses range from simple mobile payment processors to those that can manage large multi-location businesses. POS systems offer features that make running your business easier. Features like loyalty programs and discounts make POS systems attractive to customers as well.

What is a POS system?

Top POS systems facilitate transactions, allowing customers to make a purchase and pay applicable sales tax. A POS is often thought of as an internal store terminal. However, virtual POS systems are often used for online shopping.

POS systems are quickly replacing traditional cash registers because of their convenience and ease of use. POS systems can also be mobile, which allows payment to be made where the customer is, such as at their table in a restaurant. POS tablets are becoming popular with businesses, including restaurants. Our review of TouchBistro shows more about how POS systems are used in restaurants.

Editor’s note: Looking for the right POS system for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

Types of POS systems

To help you decide which POS system might work best for your company, here is a brief description of each, as well as a few suggested businesses for which they are suitable. 

1. Mobile point-of-sale systems

Smartphone and tablet POS services can process payments and manage some inventory and customer information. In most cases, the app is free in exchange for payment processing. The best payment processors will send you the credit card reader for free. This is a suitable POS option if you do not manage a lot of inventory and you need to be mobile. Most will work with a portable receipt printer, or you can email receipts to your customers directly from the app.

  • Suggested applications: Street or farmers market vendors, fair or event vendors, freelance or contract workers, contracted professional services, music merchandise vendors, mobile services, day care providers, limo services, lawn care services

2. Tablet POS systems

iPad and Android point-of-sale solutions are increasingly popular, since they require minimal upfront investment and you can often use a tablet that you already own. Some tablet POS services are “free” with credit card processing; others require a low monthly subscription fee but allow you to choose your own credit card processor. Many support compatible hardware such as barcode readers, cash drawers and tablet stands. Some are rather simple applications; others can manage complex inventory situations and track employee time.

  • Suggested applications: Mobile vendors, quick-service restaurants, coffee shops, gift shops, small retail stores, professional services, pizzerias, juice bars, sandwich shops, ice cream parlors, art galleries, small theaters, salons

3. Terminal POS systems

Terminal point-of-sale systems are the type you are used to seeing at the counter. While they are hardware- and software-based, most still require access to the internet and might even use cloud-based software. They are often sold as all-in-one solutions that include barcode scanners, cash drawers and such. Many of these services provide 24/7/365 support and cloud backup.

These systems make it easy to restrict employee internet access, since they can be configured to run only the POS software. Restaurant solutions can integrate with tableside Wi-Fi portable devices, kitchen printers, patron tablet ordering and online ordering. Retail versions can include extensive inventory tools, label printing and e-commerce integration. Some are “free” in exchange for paying for credit card processing.

  • Suggested applications: Full-service restaurants, busy retailers, grocery stores, boutiques, antique stores, book or magazine stores, salons, spas, electronic stores

4. Online point-of-sale system

With an online POS, you can use your own hardware, which might be a PC or tablet. Another advantage is the minimal startup costs. PC solutions cannot replace the convenience of a touchscreen; however, if your business has low-volume, big-ticket sales, it may prove speedy enough to suit your needs. Low-volume business also makes the use of a standard printer feasible. You can log in to online solutions from anywhere, using any device. 

  • Suggested applications: Small retailers, art galleries, consignment stores, salons, pet groomers, small cafes, big-ticket retailers

5. Self-service kiosk POS

Most kiosk POS systems are specialized solutions for a specific purpose. For example, you may offer a self-service kiosk for patrons to purchase movie tickets, or to manage parking space time and payments. Another helpful option is setting up a few kiosks in your large retail store to let your customers look up pricing and product availability. Other non-POS uses include patient check-ins and human resources (such as accepting employment applications). In some industries, mobile apps might replace some popular uses, such as check-ins and product lookup or even ticket sales.

  • Suggested applications: Ticket sales, transportation passes, patient check-ins, grocers, product lookup, HR, parking

6. Multichannel POS systems

If your business sells its products in more than one online or in-person location, you’ll benefit greatly from multichannel POS systems. This type of POS system integrates all your sales across your online store, social media pages and storefronts. As a result, you’re less likely to run out of stock, because your inventory for one sales route isn’t synced with that of your other channels.

  • Suggested applications: Brick-and-mortar stores that also sell online, e-commerce companies branching out into physical spaces, online sellers doing in-person pop-ups

7. Open-source POS systems

With open-source POS systems, you can customize your POS software interface to function exactly how you please. You’ll need software engineers to make this happen, and since software engineers often charge high rates, open-source POS can be expensive. However, it may be the only option for larger businesses with one-of-a-kind POS needs.

  • Suggested applications: Large or enterprise-sized businesses

The biggest change in POS systems over the past few years is the affordable options for small (or even micro) businesses. Small companies no longer need to deplete their startup funds on an expensive POS system. While large operations may still require a sizable upfront investment, there are now more portable and Wi-Fi options available so you can better serve your customers. Once you have defined your needs and set your budget, you can easily discover the best POS option for your business.

Components of a POS system

Software is one of the main components of a POS system. Software always has a front end and a back end. The front end is where transactions are processed. The back end gives you access to analytics, sales figures, inventory and other relevant information.

The other half of a POS system is hardware. A device to process transactions is a necessity. This can be a mobile phone, tablet, touchscreen or PC monitor. Most businesses also use a cash drawer, similar to a cash register. If your priority is POS hardware, check out our review of Clover.

You may also need a barcode scanner. Most businesses use a receipt printer, although email receipts are gaining popularity. Card readers are also essential equipment for your POS system. You’ll need an internet connection too, of course, which often requires a router or modem.

TipBottom line

Rare is the POS system that works without a hardware add-on, such as a card reader or barcode scanner.

What are the advantages of a POS system?

One of the advantages of a POS system is that it makes price tags unnecessary. Employees simply scan the barcode, which makes it much easier to change prices and apply discounts. Other advantages for businesses include features for managing inventory and loyalty programs.








Max Freedman
Contributing Writer at
Max Freedman is a content writer who has written hundreds of articles about small business strategy and operations, with a focus on finance and HR topics. He's also published articles on payroll, small business funding, and content marketing. In addition to covering these business fundamentals, Max also writes about improving company culture, optimizing business social media pages, and choosing appropriate organizational structures for small businesses.
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