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What Is a POS System and How Does It Work?

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Ryleigh Stangness | April 5, 2021

“What is a POS system? How does it work? Our guide will help take the guesswork out of choosing between POS hardware and software options.”
5 min read
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    Last Updated on March 30, 2022

    What is a POS?

    Simply put, a point-of-sale is just the location (or point) where a merchant processes a customer's purchase or order. That's it! The card reader, software, and the scanner that's often used for barcodes-all that stuff is the POS system. You can even think of them as "add-ons" that enhance a customer's point-of-sale experience.

    As a business owner, you want to facilitate the best "check-out experience" for your customers, and your POS is the heart of that operation.

    How does a POS system work?

    A POS system is usually composed of at least two devices, a computer, tablet, phone, or screen and a card reader - plus the POS software. Hardware options could include cash drawers, iPads, computer systems, credit card terminals, printers, bar code scanners, and other various components that support face-to-face transactions.

    While today's POS systems can be made up of more modern devices like tablets or smartphones, the system's primary purpose is to enable you, the business owner, to accept payments, POS purchases, through various cash and in-person card payment methods.

    Best POS Systems for your business needs

    Choosing the best POS hardware

    When deciding on the best point-of-purchase setup for your business, consider the complexity of your business requirements and product setup, your personal preferences, and how your customers prefer to pay.

    Brick-and-mortar businesses such as the retail industry typically use a legacy POS system along with a barcode scanner, card reader, cash register, and receipt printer POS to facilitate day-to-day transactions.

    Industries like restaurants and bars will likely have customers still paying with cash, requiring a cash drawer or a register. Whereas if your customers only pay with debit and credit cards, you may be able to forgo having cash drawers altogether.

    With so many hardware options, you can customize your POS setup to match your business needs; Servers and waitpeople, for example, may work best with a mobile card reader and tablet, whereas a grocer who needs to scan multiple items quickly might prefer a more traditional POS hardware setup.

    How to set up your POS system

    Setting up your POS hardware can seem daunting, but we will show you how easy it is to get it up and running; just take a look at this video from one of our top Helcim Gurus, Aaron:

    While Aaron demonstrates a deluxe suite of POS hardware tools, you don't need much to get started.

    Now that iPad point-of-sale systems are an option, business owners can launch their POS using products and technology they are likely to own instead of purchasing an expensive proprietary system, as was previously the case.

    This makes setting up your point-of-sale hardware and software system even more accessible. Now all businesses need to accept in-person payments is a device, a card reader, and a Helcim account to access our free POS software (no monthly fee!)

    POS software capabilities

    Point-of-sale software has also had a few milestones- many POS systems allow you to do more than process a transaction.

    Now you can expect software features such as:

    • Track sales across multiple locations
    • Inventory management
    • Customer relationship management
    • Split and record multiple payments and methods
    • Print and email receipts
    • Securely store customer information
    • Automatically populate tipping options
    • Enable merchants to input discounts
    • Organize sales data into valuable customer marketing insights

    With new technology introduced to the payment industry, point-of-sale systems will continue to modernize. For example, businesses no longer need to connect to a server to process payments and can use the internet via cloud-based pos systems.

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    Absolute Essentials for a POS: Credit Card Processing App

    As mentioned in the previous paragraph, things have drastically changed in recent years to reduce upgrade and start-up costs when building your own POS system.

    Modern POS systems are no longer limited to your check-out counter, nor is it even essential to own a card reader anymore; with the Helcim Virtual Terminal, you can process payments entirely online. You only need a free Helcim account to access this free POS software on your computer or mobile device.

    Credit Card Reader: A Familiar POS Setup

    A card reader is a great way to streamline payments for your business. You can always rely on your credit card app to take payments wherever you are, but with a card reader, you not only benefit from lower processing rates but give your customers the added convenience of paying with tap or chip & pin.

    Credit card processors like Helcim offers a sleek, modern card card machine that helps elevate your customer's over-the-counter payment experience. Helcim's card reader is lightweight, portable, and connects via Bluetooth or USB to your desktop or mobile phone. It's an upgrade on a clunky old-school terminal. Yet, its familiar look will be instantly recognizable to your customers and present them with a comfortable in-person payment option.

    Time for a sytem update? Upgrade your old POS

    Is your POS system falling behind on todays capabilities? Aside from the undeniable felxibility of mobile card readers and tablets, consider the benefits of cloud-based pos systems.

    Unlike the traditional legacy systems that took up a lot of counter space and were expensive to install and maintain, this system is more cost-effective than its predecessor. Still, it's also significantly easier to update. Whenever a mobile POS system like ours needs to be updated, you'll get a notification to download the update at a time that is convenient for you (or you can enable automatic updates), meaning you won't need to worry about spending thousands of dollars to update your POS ever again.

    The heart of your checkout experience

    A POS system is a critical piece of your business infrastructure. It's the backbone that allows you to take payments, track inventory, and manage customer data. Make sure you select the right hardware and software for your needs, learn how to make the most of it's capabilities, and keep it updated with the latest features. This will ensure that your customers have a smooth checkout experience and that you can run your business smoothly behind the scenes.

    By understanding the basics of what a POS system is and what you need to set one up, you can make sure that you're getting the most out of this important investment.

    If you have any questions about upgrading or staying up to date on modern POS features, our team is here to help. Contact us today to get started!

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