Is Your Business Ready for a Cloud POS System?

How a cloud POS solution is changing sales

The goal of any business is to increase income with minimal expenses. In traditional stores, restaurants, and other places where payments are made regularly, POS systems partially carry out this task. With them, companies increase sales, improve product management and calculate customers faster. And what if your firm can operate even better thanks to a cloud POS system? We will tell you how it differs from a traditional POS and what benefits it gives to a business.

What is a POS system?

POS stands for a “point of sale” – a place where a buyer pays for products or services. This can be a physical store or a virtual POS (mobile or web application).

Physical stores are equipped with POS system hardware and software.

It can be a local POS terminal, which includes a monitor, a system unit, a customer display, a POS keyboard, a card reader, a printer, a fiscal component, and POS system software. Such a terminal performs one main function – accepting card payments.

It can also be a cloud POS system. To make it, you will need a computer (or a tablet/smartphone), a barcode scanner, a receipt printer, scales, and a card reader. But such a system does not only accept payments. It has additional functions, from inventory management to tax calculation.


How does a cloud POS system work?

A cloud POS system processes transactions and stores sales information in the cloud. Even if a company has a chain of stores and online points, orders are automatically synchronized in the cloud system. Any sales information is updated in real time.

According to The State of Store Technology Insights Paper, businessmen are interested in cloud-based POS systems because they are easy to use. 48% of managers plan to implement a new checkout method within three years. The cloud POS market is predicted to grow by 20% between 2022 and 2028.

Hospitality Technology has identified the top 7 reasons why companies are revamping their POS systems:

  1. 68% of firms implement new payment methods (for example, an electronic wallet);
  2. 58% introduce self-service;
  3. 53% migrate to mobile POS systems;
  4. 47% want to integrate POS with other operating systems;
  5. 42% want their systems to meet PCI security standards;
  6. 37% seek to integrate POS with a third-party delivery system;
  7. 32% migrate to the cloud and plan to use customer data and so on.

The cloud helps to implement these procedures more efficiently.

How is a cloud POS system different from a traditional one?

A cloud POS system is significantly different from traditional on-premise POS software.

Difference in architecture

In older POS systems, data is stored on a local server. To view a sales report and change a restaurant menu, a manager must be physically located in a store or a cafe. A closed POS network cannot be accessed through other devices. To manage data, you need to be where it is stored.

In a cloud POS system, the data is stored in the cloud and is available on the Internet. Instead of bulky local terminals, companies can use tablets, smartphones, or laptops. It is enough to connect to the Internet and run a cloud program. There are no location restrictions.

Different POS software update frequency

Software for traditional POS terminals is updated manually on site. This usually happens once or twice a year.

Cloud POS systems are updated remotely by vendors. This happens regularly, every few months. These costs are usually included in a subscription.

The cost is different

The cost, installation, and maintenance of POS terminals are more expensive than POS systems. Managers must pay an upfront license fee and a maintenance fee once a year. In the case of cloud POS software, you need to renew your subscription monthly.

Different dimensions

Many traditional POS terminals are larger and take up a lot of space at the checkout.

A cloud POS system is available to merchants even through a smartphone. It is more convenient and compact. You can carry it with you anywhere.

Different customization options

A classic POS system is less flexible than a cloud one. It usually includes standard software that is difficult to adapt to a specific business. With a cloud POS system, you can set a minimum stock level to have the app remind you when you need to order more goods. It can monitor when employees arrive at work and track peak hours and sales reports.


Types of cloud POS systems

There are four types of cloud POS systems:

Mobile POS System

It is a point of sale on a smartphone or tablet that functions as a registry. Its owner needs to install the mobile POS app on a device, connect a card reader and start selling.

Online POS system

In this case, payments are accepted by a laptop or a desktop computer. Card readers, a barcode scanner, a receipt printer, and other equipment are connected to them.

Cloud-based terminal

A cloud POS terminal is similar to an on-premise one, it is connected to the Internet and the cloud. It runs on POS software. In general, it has the same advantages as other cloud solutions.

Self-service kiosks

Kiosks allow customers to pay for purchases on their own. They are suitable for large stores, restaurants, and cinemas – spots where there is a lot of space. Such POS systems unload cashiers and “save” customers from long queues.

Main functions of a POS system

As we have mentioned above, cloud POS systems offer more than just paying for goods and services. With them, a business can:

  1. Manage inventory.

Most POS software comes with a stock management feature. It alerts managers when items are running low in a store or a warehouse. Also, the manager can see which goods are not in demand and are stale. Even if an entrepreneur has a network of stores, all stocks are combined into a single database.

  1. Analyze reports.

The software provides statistics on how many products were sold per month, six months, or a year. A businessman sees how their company works. For example, what the average amount of one transaction is or at what time the firm earns more money. This information can be used for future strategies. With an Internet connection, reports are available from anywhere.

  1. Manage employees.

Such an app records when sellers start and finish work. You can create profiles for specific employees to calculate payroll.

  1. Observe clients.

Individual POS systems include customer profiles that analyze their behavior. Using this data, owners develop loyalty programs and offer their customers discounts and bonuses.

  1. Work with other systems through POS.

Cloud software integrates with enterprise applications, for example, with accounting, marketing, and eCommerce programs. The integration is configured by cloud service providers or a POS development company.

The software capabilities of a POS system vary by vendor and by business. The number of POS devices is also different. Such a system is not just a cash register. It automates payments and tracks useful business data.


Why are companies moving to cloud POS systems?

Organizations are interested in cloud POS systems. They see tangible benefits from their use.

  1. Cloud POS systems are profitable.

When an entrepreneur buys a classic POS terminal, they license the software, register each terminal, and pay for the maintenance under a contract.

All you need to do to set up a cloud POS system is:

  • use a smartphone, a tablet, or a laptop;
  • buy additional equipment (if necessary);
  • buy access to cloud software and install it on your device;
  • renew your subscription monthly.
  1. A cloud POS system is easy to adapt to a business.

If the owner of an enterprise considers that some functions are superfluous or additional ones need to be added, cloud POS solution providers customize the system upon request.

  1. A POS system gives a business mobility.

Cloud POS systems work even on your phone. This means that a waiter serving a client can take a smartphone with them. Or a courier who delivers orders to your home. Or a salesperson who represents an organization at a trade show. With POS software, a business can sell at any place where there is a stable Internet connection.

  1. Cloud POS systems protect businesses against downtime.

If a device on which a POS system is running breaks down, it can be easily replaced with another one. For example, access the cloud software from a computer while an mPOS is being repaired. The program saves all data in the cloud, so they are not lost when switching to another device.

  1. Confidential data is securely protected.

With cloud POS systems, businesses take off most of their security concerns. A cloud POS software provider protects customer data with tools such as:

– end-to-end encryption;

– backup;

– advanced firewalls;

– event logging and other cybersecurity techniques.

  1. A business is easy to scale.

The benefit of a cloud POS system is that managers are free to add or reduce the number of payment points, for example, during the sales season or at the time of the advertising campaign. It is enough to discuss this issue with a POS provider or a POS development company. Moreover, you can do without additional equipment and use a smartphone.

  1. A cloud POS system gives a business more options.

We have already described the powerful features of POS software: employee, customer and inventory management, reporting, and advanced marketing. By purchasing one cloud POS solution, you are buying multiple business tools.

Are there any disadvantages?

Some features of POS systems cause doubts.

Traditional POS service equals cloud subscription cost

Some people are worried about the price of a cloud-based POS software subscription. They claim that a monthly subscription can become as expensive as a traditional POS terminal maintenance fee.

But a tariff plan depends on how many devices are connected to the system and what features the business needs. Moreover, cloud providers sometimes offer lucrative discounts on annual packages. In any case, before buying, it is better to recalculate how much the business will benefit from moving to the cloud.

What happens if there is no Internet?

Some entrepreneurs fear that if an Internet connection is interrupted, a cloud POS system will stop working. There are two ways to deal with this:

  • Use different network operators. When one fails, the other one will continue to work.
  • Choose a cloud POS system that works both online and offline.

Offline transactions are automatically synced to the cloud when the store is back online. Sellers work, even if the Internet fails.

Business owners don’t want to throw away old terminals

Businessmen who have spent a lot of money on POS terminals are not ready to throw them away. This is not a problem, because a cloud POS solution can be used not only with modern tablets and smartphones. They also work on Windows client terminals.

How to avoid mistakes with POS software

When it comes to choosing a POS system, it’s important not only to evaluate the functionality it offers. It is necessary to assess the quality of the system and the reliability of the supplier.

Determine the quality of the system

How do you know how well a system is built? Pay attention to the following issues:

  • Does the application use the API? This is important to enable payments through a mobile or web application.
  • What programming language is it written in? A vendor that changes a 10-year-old code and calls this a cloud solution is acting dishonestly. The application will not work well and will be incompatible with the POS system. Its integration with corporate services will be unnecessarily expensive.

Learn more about the provider

A cloud POS terminal is provided as a service. Therefore, the supplier quickly updates the software, implements new functions, and responds to customer requests. If this does not happen, it is worth changing the partner or developing your own cloud POS software.

The last step is possible if you have a large stable business with a set budget. You have tried several POS systems and know what can be improved. Your business is unique and you are planning to use the system for a long period.


I am Selim Khan Dipu (Professional Blogger)