Thanks to advances in technology and a decline in POS prices over the years, there is a POS system for every size of business. The hardware no longer costs several thousand dollars, and the service contracts aren't hundreds of dollars a month. Today, there are price points to fit a one-shop merchant as well as a retailer with several locations.
POS system costs vary widely, though, depending on the hardware and software features you need. There are three components to consider when determining the price of a system – hardware, software, and payment processing. Plan on comparison shopping for each one.
POS Hardware Costs
Depending on the business, a POS system can include a terminal or tablet, a cash drawer, a card reader, barcode scanners, a receipt printer, and signature-capture devices. The best POS systems are compatible with third-party hardware, letting you shop around for deals (and possibly continue using your chosen hardware if you switch software providers later). They're also scalable, so you can start with the basics, then add peripherals as your business grows and your budget allows.
For very small businesses that only accept credit cards and can email receipts to customers, a phone or tablet and a card reader will suffice. If you already have mobile devices and only need to buy an EMV-compliant and NFC-enabled credit card reader, this setup usually costs $20 to $100.
Most small businesses will want a few more peripherals, such as a tablet stand, cash drawer, and receipt printer. For this type of setup (using your own tablet), you'll typically pay $600 to $1,000. Additional peripherals like barcode scanners, kitchen printers and display screens cost extra.
Bottom line: POS hardware typically costs $20 to $1,000, depending on what types you need. Peripherals such as barcode scanners and display screens cost extra.
POS Software Costs
POS software costs depend on the services you need. You could pay anywhere from $25 to $250 a month. The most common payment model in the POS software market is monthly subscriptions.
Most of the cloud-based POS vendors offer pricing tiers with different features. Some tiers cap the number of users or the monthly sales volume you can process. There are also POS vendors that offer free POS software, but there's a catch: You must process your payments through the POS provider.
If you want a basic, free POS system, the best options are from highly rated mobile credit card processors (see our Square review for an example). These credit card processors include POS features in their mobile processing apps. You must use the same company for your payment processing in order to use its POS app, but you aren't locked into a long-term contract. Processing fees are charged on a pay-as-you-go basis, which is ideal for very small businesses.
If you need more out of your POS system, such as inventory management or e-commerce tools, expect to pay $40 to $100 a month for one register. The more bells and whistles you want, the higher the monthly cost. Be mindful of the features in each tier when shopping for a POS system: One company might include all the features you need in the basic package, whereas you have to pay for a higher tier to access some of those features with another vendor. For example, inventory management with tracking capabilities may be standard in all packages with one vendor and an add-on with another.
Tip: Compare POS software plans carefully when choosing a POS system. POS software typically costs $40 to $100 per month for one register.
The final piece of the POS pricing puzzle is payment processing. This is the cost to accept and process customers' payments through your point-of-sale device. The best POS systems give you a choice of great payment processors so you can shop around for low rates and fees, and if you decide to use a different processor, you won't have to switch out the entire POS system.
POS providers are increasingly offering in-house processing, which can be convenient but more costly. Some give you a choice to use their in-house processing service or not, while others charge an extra fee (either monthly or per transaction) for using a third-party processor. Others require you to use their in-house credit card processing service exclusively.
FYI: The average credit card processing fee ranges from 1.3% to 3.5% per transaction.