Running small or medium-sized businesses (SMB) comes with many decisions, and one of the most critical is choosing the right POS terminal. A POS terminal/device is more than just a payment processing machine—it’s the backbone of your checkout process, helping you manage sales, track inventory, and even build stronger customer relationships.
In this guide, we’ll explore the essential features of POS systems, the advantage of POS systems, and how to find the perfect one for your business needs.
What is a POS Terminal?
A POS terminal is a device that enables businesses to accept payments via credit cards, debit cards, mobile wallets, and cash. Depending on your requirements, it can range from a simple smartphone with a card reader to a fully integrated system with a touchscreen, barcode scanner, and receipt printer.
What is a POS Application?
A POS application is the software used on point of sale systems to process transactions, track inventory, and manage sales. These applications are designed to be PCI DSS compliant, ensuring that sensitive card data is tokenized and securely transmitted to the payment processor.
How Does a POS Terminal Work?
Understanding how a POS terminal works can help you make an informed decision.
Here’s a step-by-step breakdown:
- Customer Makes a Purchase – A customer selects their products or services and proceeds to checkout.
- Payment is Processed – They insert, swipe, or tap their card, or use a mobile wallet like Apple Pay or Google Pay.
- Transaction Verification – The POS terminal securely transmits payment details to the payment processor, which verifies the transaction with the issuing bank.
- Approval or Decline – If approved, the payment is completed, and a receipt is generated. If declined, the customer is asked to try another payment method.
- Sales Data is Stored – The transaction details are recorded in the POS system, aiding in accounting, reporting, and inventory management.
Modern POS terminals go beyond basic transactions. Many integrate with business software to provide real-time analytics, customer insights, and even marketing tools.
