There are many aspects of running a business that require considerable thought. While taking a customer payment is over in a matter of seconds, the decision on how to accept and process payments shouldn’t be made lightly. A point-of-sale system is crucial to running a successful business, as with it you are able to quickly and securely process different payment methods. It is estimated that just under 70% of businesses rely on a POS system to conduct payment transactions.
Handling More Than Payments
Early forms of POS systems were limited to basic cash tendering. Now, they are capable of handling multiple aspects of operations, from invoicing, accounting, reporting, and inventory. Because of the many options these systems offer, it can be confusing and challenging to determine which POS is right for your company. You are probably long past the need for a simple cash register. You are probably also needing something that is portable, capable of connecting to the cloud, and efficient in several business functions. The point of sales processing terminals provide flexibility to accept the payment your customer prefers while delivering higher sales and financial efficiency.
For the savvy business owner, the best choice for a POS system will be able to handle several different forms of payment. This is critical to financial success and a consumer-centric operational model, as credit card transactions have jumped to over 40 billion a year among U.S. consumers. As digital wallets like Apple Pay continue to grow in popularity, your POS system needs to be able to diversify. Cashless payments are the future, and the younger consumers are preferring store-branded wallets and digital payments over cash or traditional credit cards.
Technology is moving fast, but the right POS solution lets you stay in the game and be a competitor in the industry. Take EMV chip cards. Though 85% of the credit cards issued in the U.S. have embedded software, less than 65% of merchants are able to process this tech and payment option. You can also rely on a POS system for sales tracking and data analysis. You can identify consumer behaviors and purchasing habits, letting you personalize your delivery and capitalizing on key trends across your target market. Some systems also allow you to track your employee productivity and keep up with inventory.
Realizing the Payment Competition
While a POS system has remarkable benefits, it isn’t always the right choice for a business. The competition is a credit card terminal. This is a payment system that can process debit or credit cards, gift cards, loyalty cards, and checks. These machines are small and lightweight, connected to a processing device such as a register. The most common designs now include a display screen, a magnetic stripe reader, a keypad, a signature pen, and an EMV-chip reading slot. There are variations in design, depending on the manufacturer and brand.
The Differences Between Payment Processing Systems
When comparing the pros and cons of these payment processing forms, you have to take into account the needs of your business. You also have to look at the differences between old and new model terminals and POS systems.
Credit card terminals can be found at many major retailers, and many of them also have options to automate the transaction and print a receipt. For businesses where travel to and from consumers or clients is commonplace, then a portable terminal is ideal. However, POS systems have already been upgraded to where it offers mobile use as well.
For the company that is looking for a more complete package that assists with other business functions, a POS system is ideal. Cloud-based technology has made POS systems more accessible and affordable for business owners of all types, but small to mid-sized business owners find a lot of support with a POS solution. The system is easy to set up and very user-friendly, with cloud-based connections delivering automatic updates. However, a cloud-based system does require an internet connection in order for the software to work. This internet connectivity can also pose a security risk as it can be susceptible to hackers. You also have the option of cardless transactions, magnetic swipe, EMV-chip reading, or online transactions.
Regardless of which transaction system you purchase, you will be facing credit card processing fees either with the purchase of the hardware itself, security compliance, chargebacks, and transaction fees. It is important that you read through your contract carefully to determine just how much your POS system or credit card terminal will cost you.
To be able to accept credit or debit card payments, your business will need to have a merchant account set-up. This requires an application with a payment processor such as Instabill. Companies are categorized according to risk, and the cost of a merchant account is impacted by the level of risk your business presents. Fortunately, Instabill offers a simple application process with a quick turn around on approval. High risk merchants aren’t turned away, giving you the opportunity to expand your accepted forms of payment and increase consumer purchasing options.