What is a POS (Point of Sale) system? The Complete Guide

What is a POS (Point of Sale) system? The Complete Guide

Biyo Point of Sale System
Point of Sale System

Even if you don’t know it, most of you are experienced with point of sale (POS) systems.

A point-of-sale (POS) system is a collection of software that allows shops and restaurant operators to receive payments from consumers, and plenty of other things. It is the hardware and software that a retail firm need to operate their businesses. The point of sale is the fundamental hub that helps merchants manage and expand their companies, from purchasing and maintaining goods to processing transactions to managing customers and workers.



POS systems have made it possible for anybody, from sophisticated entrepreneurs to artists who wish to turn their passion into a career, to create and run a retail shop. So let’s get started addressing your POS queries.

  1. What is a point-of-sale (POS) system?
  2. What is a POS?
  3. What exactly is a mobile point-of-sale system?
  4. What kind of Hardware is required for Point of Sale System?
  5. What is a point-of-sale (POS) transaction?
  6. What are the primary elements of a POS system?
  7. Which point-of-sale system is best for your company?
What is a point-of-sale (POS) system?

The first thing to remember about a POS system is that it is made up of point-of-sale hardware and software. These two components, when used together, provide merchants with all of the tools they need to accept common payment methods as well as manage and analyze their entire companies. Your point-of-sale system is used to track and organize your inventory, staff, customers, and sales.

Legacy point-of-sale systems were traditionally on-premise, which meant they ran on an on-site server and could only be utilized in a certain part of your shop. That’s why your front-desk desktop computer, cash register, receipt printer, barcode scanner, and payment processor were all permanently installed.

A major technical breakthrough occurred in the early 2000s: the cloud. The next phase in the growth of POS systems occurred with the introduction of cloud-based storage and computing: mobility.

What is a POS?

The term “point of sale” refers to any location where a transaction may take place, whether it’s for a product or a service.

That’s generally the area around the cash register for shops. If you’re at a conventional diner and pay the cashier instead of the waitress, the area beside the cash register is also referred to as the point of sale.

Your whole shop basically becomes a point of sale if you have a mobile POS (but we will get to that later).

What exactly is a mobile point-of-sale system?


As a consequence of cloud-based servers, shops may begin using their POS system simply entering into their corporate site using any device with internet connectivity—whether a laptop, desktop, tablet, or smartphone.

Retailers can manage their whole company from any device, at any time, using a mobile POS system. Did you know that 80 percent of merchants that switched to a mobile POS saw an increase in sales?

Great client experiences are becoming more accessible.

The effect on retailers was massive. Reduced lines to pay and speedier customer service occurred from the ability to operate their company, serve clients, and process transactions from anywhere. The customer experience that had previously been reserved for large businesses such as Apple was now open to everyone.

Mobile POS systems have opened up dozens of new new revenue streams, such as pop-up shops and selling at trade events and festivals.

What are the advantages of a mobile point-of-sale system?


  1. Checkout and payments on the go
  2. Inventory management that is centralized
  3. Access to sales reports in real time
  4. Customer data that is more advanced
  5. Employee scheduling and management
  6. Payment processing that is integrated
  7. Manage your company from anywhere, on any device.
  8. Open new shops as soon as possible.
  9. Capabilities in customer relationship management
What kind of hardware is required for a POS system?

Depending on the nature of your company, you may need different hardware components. Although we’ve included the most common hardware used by retailers, bear in mind that not every company need all of these items.

  1. POS (Point of Sale) terminal
  2. Reader for credit cards
  3. Printer for receipts
  4. Scanner for barcodes
  5. Drawer for money
1. POS (Point of Sale) terminal


The device on which the mobile POS software operates is known as a POS terminal.

The cash register was the POS terminal in old-school on-premise systems. Merchants may utilize any device with internet connections for the newest choices, including a desktop computer, laptop, tablet, or smartphone.

Many stores choose to employ tablets with a stand that converts them into a countertop gadget, such as an iPad. The adaptability of this system is one of its main advantages. Anywhere on the sales floor, sales clerks may pick up their tablet, check up inventory, view customer profiles, and conduct transactions.

2. Reader for credit cards

A credit card terminal is another name for this device. It is the method through which retailers accept credit and debit card payments.

A credit card may take payments in three ways:


  1. Reading the magstripe on the card (swiping the card)
  2. Using an EMV reader to read the chip on the card (Europay, Mastercard or Visa)
  3. Accepting payments from mobile payment providers such as ApplePay using near-field communication (NFC).

The majority of customers prefer to pay with their credit cards rather than cash. According to Business Insider, by 2025, 75% of all transactions will be cashless. What is the reason behind this? Because cashless transactions are often faster and more efficient, customers have more time to do what they want.

Select a credit card reader that meets the following criteria:
  • Receipts are printed or sent by e-mail
  • Accepts any form of payment
  • Provides payment processing that is connected with the POS.
3. Printer for receipts

Even though the majority of customers prefer electronic receipts, it’s still necessary to provide printed receipts.
Receipt printers come in a variety of styles.

Printer with an impact

Impact printers, also known as transfer or dot-matrix printers, produce receipts and tickets using wax, resin, or an ink-soaked ribbon that arrives in the shape of a cartridge and drops into the printer (similar to ink cartridges in a computer printer). The print head creates an impact on the ribbon and on the paper to print the text and graphics, which is why they’re called impact printers.

Kitchen printers often employ impact printers since they can endure greater temperatures without losing print quality.

Printer for thermal receipts

Thermal receipt printers, also known as direct printers, utilize heat to imprint text or graphics on a particular kind of paper. These are the most popular kinds of point-of-purchase receipt printers. Because they print using a direct heat source rather than ink, they are silent, rapid, efficient, and cost-effective.

Receipt printers may be linked to a POS terminal through USB or Bluetooth. Receipt printer paper is usually available from most POS system suppliers.

4. Scanner for barcodes

A barcode scanner is essential for retailers that have a lot of inventory to manage, stock, and speed up their checkout process. A barcode scanner may be connected to a suitable POS terminal through USB or Bluetooth, much as receipt printers and cash drawers.

Barcode scanners come in a variety of shapes and types.

Scanners for 1D barcodes

In a retail context, a one-dimensional barcode scanner is used to scan linear Universal Product Codes (UPC) on consumer items.

Scanners for 2D barcodes

Scanning increasingly complicated codes like Data Matrix, QR Code, and PDF417 requires a two-dimensional barcode scanner. Scanning 2D barcodes on a driver’s license for age verification is the most prevalent usage at a retail.

5. Drawer for money

Most companies need a cash drawer to accommodate clients who want to pay in cash. They are often available in a variety of sizes to accommodate a wide range of corporate needs. Inserts for the cash drawer are known as cash register trays. To store and arrange various monetary denominations, they contain several bill tray and coin tray divisions.

Depending on the size of the cash drawer, the number of bill and coin tray sections will vary. Smaller cash drawers may feature just four or five sections for coins and bills, but bigger drawers may have six to eight sections.

Most cash POS-compatible cash drawers, like barcode scanners and receipt printers, can connect to the POS terminal through USB or Bluetooth.

Most POS system providers will supply you with a list of suitable hardware and can quickly get you set up with everything you need. With Biyo’s wireless hardware package, you can obtain everything you need.

What is a point-of-sale (POS) transaction?


A point-of-sale (POS) transaction occurs when a transaction is completed or when a consumer offers money in return for products and services. Cash, debit cards, credit cards, mobile payments, and even earned loyalty points may all be utilized as forms of payment.

Before a POS purchase can be completed, a PIN number, signature, or, in the case of newer mobile payment systems, a fingerprint scan is normally required to confirm the transaction.

The PIN number or other security elements are used to authenticate the transaction, which then travels via ATM networks until it reaches its final destination–the issuing bank. Depending on the transaction type and the cash available in the cardholder’s account, the bank may either allow or refuse it at this stage.

Some states and counties in the United States, such as California and New York’s Westchester County, mandate a customer-facing display at the point of sale. Customers may view the pricing of each item before making a purchase.

What are the primary elements of a POS system?

A POS system is powered by software that has two parts: a cashier component and a company management component. Each one is potent and has the potential to change the way you do business.

Software should be registered

The cashier-facing element of POS software is the register software (or register application). It’s where the cashier will ring up transactions and the consumer will pay. It’s also where the cashier will handle other aspects of the transaction, such as applying discounts, processing returns, and reimbursing money if necessary.

Software for business management

This side of the point-of-sale software equation may operate as installed software on a desktop PC or, in more recent systems, may be accessed through any web browser. Business management software comes with a variety of innovative features that will assist you in better understanding and managing your company.

Modern POS systems’ business management functions are best compared to your company’s mission control. As a result, you want your POS to work with the other tools and software you need to manage your company. Email marketing, bookkeeping, and eCommerce are just a few of the most popular interconnections. Because data is exchanged throughout these connectors, you can operate a more efficient and lucrative firm.

According to a Deloitte Global case study, 90 percent of Americans will own a smartphone by 2023, which they will use an average of 65 times each day. With the rise of the internet and the rapid adoption of smartphones by customers, a slew of new POS functionality and features have developed to assist independent merchants in providing customers with the connected, omnichannel shopping experience they want.

The following are important characteristics to look for in a retail point of sale:


  1. Selling skills via many channels
  2. Payment processing that is integrated
  3. Management of customer relationships (CRM)
  4. Inventory control is important.
  5. Personnel management
  6. Management of many locations
  7. Reporting on a higher level
  8. Add-ons and integrations
  9. Ongoing assistance
1. Selling skills via many channels

Customers often do product research online before visiting your business. The majority of people that come through your doors already have a clear sense of what they want. Customers have come to anticipate this kind of omnichannel purchasing experience.

The foundation of an omnichannel shopping experience is an easy-to-navigate, transactional internet store where customers may investigate items. It all comes to a head with a similarly easy in-store experience.

As a consequence, a rising number of merchants have chosen a mobile POS system that enables them to manage both a brick-and-mortar and an eCommerce shop from the same platform to adapt to their customers’ behavior.

This allows merchants to check whether they have a product in stock, confirm inventory levels across various shop locations, generate customized orders on the spot, and provide in-store pickup or direct shipment.

Mobile POS systems are increasingly concentrating on expanding their omnichannel selling capabilities and blurring the borders between online and in-store retail as consumer technology and consumer habits change.

The advantages of an omnichannel point of sale include the following:
  • Both online and in-store sales are possible.
  • Increased internet exposure of the store
  • A customer-centric shopping experience
  • Order fulfillment possibilities are many.
  • Inventory that is synchronized across online and in-store
2. Payment processing that is integrated

Here’s how most individuals react when they read a contract from a third-party payment processor:

Being a retailer is more difficult than it has ever been, what with managing an internet business, a brick-and-mortar shop, order fulfillment, inventory, paperwork, customers, and workers.

In order to make merchants’ life simpler, mobile POS system vendors began adopting payment processing in-house, thereby eliminating complex (and possibly risky) third-party payment processors.

Retailers benefit from two factors. For starters, customers may collaborate with a single firm to assist them manage both their business and their finances. Second, compared to third-parties, pricing is significantly more plain and open. Retailers benefit from a single transaction rate for all payment methods, as well as no up or ongoing costs.

As a consequence, merchants are able to retain more of their money while also avoiding the hassle of payment processing.

The advantages of POS-integrated payment processing include the following:

  • The transaction rate is fixed.
  • PCI compliance and fraud protection are built-in.
  • There’s no need for third-party accounts.
  • Financial data for businesses that are centralized
3. Management of customer relationships (CRM)

You may construct a profile for each of your clients in your POS CRM database. You may keep track of the following information in those profiles:

  • Information on payments
  • History of payments
  • Favorite merchandise
  • History of purchases
  • Frequency of shopping

Retailers may also use CRM databases to put up timed promotions (when a promotion is only valid for a given timeframe, after which the items on promotion revert back to their original pricing).

Add-ons for loyalty programs

A loyalty program based on a mobile app is also available from certain POS system suppliers.

Consumers are more inclined to purchase items from a company that offers a loyalty program, with 59 percent preferring those that are mobile app-based. Isn’t it surprising? Not at all.

The motivation for shops to develop a loyalty program is simple: to remind consumers that you appreciate their business so that they return. You provide them incentives like percentage discounts and other promotions that aren’t accessible to the general public to encourage them to come back. It’s all about client retention, which may cost up to five times less than acquiring new clients.

Loyalty programs, when combined with a CRM database, allow merchants to use their customers’ purchase history to target them with relevant offers through email, social media, or any other channel.

What are the benefits of CRM and loyalty add-ons?
By scaling your loyal clients by only 5%, you may increase your sales by up to 75%.

When you make your customers feel valued and regularly recommend items and services that meet their requirements, you enhance the possibility that they will tell their friends about your store.

Your clients become your shop’s ultimate cheerleaders, spreading great word about you to their social networks and, in turn, bringing in new consumers.

4. Inventory control is important

This tool aids in the comprehension of all parts of your inventory. This might include anything from simple stock level monitoring to setting up reorder triggers to ensure you never run out of a crucial inventory item.

Inventory costs money that can’t be used to build your company, so it’s critical to choose wisely what and how much inventory to acquire.

Inventory management is one of the most challenging balancing acts for merchants, but it’s also the most vital since it affects cash flow and revenue.

Goods management features are common in POS systems, making it easier for shops to buy, organize, and sell their inventory.

Retailers can be certain that their inventory levels—both online and in their physical store—are correct thanks to real-time inventory monitoring.

There are a variety of inventory management capabilities in a POS that go along with real-time inventory management:

  • Special orders
  • Management of work orders
  • Layaways are a kind of financing.
  • Purchase orders and vendor catalogs are integrated (POS)
5. Personnel management

Modern point-of-sale systems may assist you in managing personnel by making it simple to measure hours worked and, if appropriate, sales performance. This allows you to recognize your finest employees while also coaching those who need the greatest assistance. It may also make time-consuming operations like payroll and scheduling easier.

Managers and workers should be able to specify specific permissions in your POS. You can regulate who has access to the back end of your POS and who simply has access to the front end using this.

You should be able to arrange your workers’ shifts, monitor their hours worked, and create reports on their performance on the job (like seeing how many transactions they process, their average items per transaction, and their average transaction value).

You may also produce end-of-day reports that break down your total sales by employee and shift.

The greatest things to look for in a personnel management system are:
  • Employees should be scheduled.
  • Keep an eye on each employee’s performance.
  • Assign particular rights to certain users.
6. Management of Multi Store (Chains)

One of the most significant benefits of a mobile POS is that it can enable your company’s expansion from one to several locations.

Consolidate inventory, customer, and employee management across all locations so you can run your complete company from a single location.

The advantages of multi-store management include:
  • Manage both your physical and online businesses from an one location.
  • As you establish more locations, add shops, users, and cash registers to your POS.
  • For all locations, create a single purchase order (PO).
  • Customer data may be accessed from any place.
  • Items may be moved between retailers.
  • Examine the performance of several stores.
7. Advanced Reporting

One of the most compelling reasons to acquire a point of sale system, apart from inventory management, is for reporting. These reports provide you with information on all elements of your organization, allowing you to make informed choices that will increase your productivity and profitability. This might include anything from recognizing your best and worst salespeople to learning about the most common payment options (credit, debit, check, mobile, etc.) so you can provide your customers the greatest possible experience.

These user-friendly sales, inventory, and personnel reports help you convert data into action and operate your company more efficiently.

A mobile POS should have a number of pre-programmed reports that provide you an overview of your store’s performance on an hourly, daily, weekly, monthly, and annual basis.

You can save money on labor, boost the return on investment (ROI) on your inventory, anticipate high-volume sales times, discover your star staff, and much more with this information.

8. Add-ons and integrations

Integrations and add-ons increase your POS’s capability beyond its main functions.

Look for add-ons and connectors for the following in your POS app marketplaces:

  • Inventory Management
  • Accounting
  • Organizing (Scheduling)
  • Payrolls
  • Management of the warehouse
  • Order processing (fullfillments)
  • Marketing

There’s a lot more.

9. Ongoing Assistance

Even if your POS is straightforward and simple to use, you’ll inevitably get stuck and have questions. And when you do, you’ll need 24-hour assistance to assist you resolve problems quickly.

Support staff for POS systems may usually be reached via phone, email, or live chat.

Consider if the POS supplier includes supporting material like as webinars, video lessons, and support groups and forums where you can communicate with other shops using the system, in addition to on-demand help.

Which point-of-sale system is best for your company?

The point-of-sale system you pick has a significant influence on how you conduct your company on a daily basis and how you expand it year after year.

There are several alternatives available. We’ll assist you in locating the best point-of-sale system for your company. To begin the discussion, contact us.

Sign up for our cloud base Point of Sale System

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