A point of sale terminal is an electronic device used to process card payments at shopping malls and other similar retail stores. The software inside the POS reads the magnetic stripe of debit and credit cards.
The POS could be electronic devices – either property or you could have a third party system. Nowadays there are many choices in the market that you can use such as contact less which are for mobile payments, the league of which represents the face of next generation.
It is a clever combination of software and hardware that allows merchants and store owners to receive payments through cards without writing down the transaction in their cash registers. The installation cost of POS terminals varies according to the size of the business. The bigger business models can negotiate because of the sheer volume of the transactions they record every day. On the other hand, smaller business owners might have to pay some rent for this terminal.
Usually the functions of a POS terminal are:
- A POS reads the personal details off a consumer’s credit or debit card.
- It checks and confirms that there is sufficient fund in the customer’s bank account
- It transfers the money from the customer’s account to the merchant’s account.
- Finally, it records the all the transactions and prints out a receipt.
POS terminal has made everything so easy. In the past, customers used to wait in the line to pay for their items or things and it was very irritating. It was also very exhausting and time-consuming for the retail owners to record every single transaction and sale manually. But POS has been a blessing to the both the consumer and retail owners. The traditional method of recording everything has become obsolete.
When a customer pays for something using their credit or debit cards, the POS scans the magnetic strip to check if the customer has enough funds to pay the seller. When the POS confirms that customer in fact has money in his account, it transfers the funds to the card owner within a few seconds. The record of this sale transaction is kept and a receipt is printed out and sometimes sent out to the customer through email. It is called invoice.
A POS terminal can be bought or you can buy it through lease. It totally depends upon the management of the cash flow. When you buy a system, it costs expensive upfront costs. On the other hand, if you lease out a POS it costs monthly installments. It is plain and simple that one-time payment may cost you more than the total lease payments. It depends on the life of the system.
There are many benefits of POS systems. POS terminals can increase the productivity and functionality by simply installing a network of devices such as bar code scanners and card readers. The software features that retailers use can track gross revenue, sales patterns, inventory changes, and pricing accuracy.