How to Choose the Best POS System for Your Small Business

Table of contents

• What is a POS?
• When do you need a POS system?
• Factors to consider when choosing a POS system
• Benefits of using a POS system for credit card processing
• How to choose a POS system for your business
• FAQ

As a business owner, the tools you rely on have a big impact on your success. Understanding what a point of sale (POS) system is and the best option for your unique business is key for smooth operations and steady growth.

Selecting a POS system may seem straightforward, but it can be daunting when you consider the array of options available and the potential costs involved. When you’re looking for the POS system in Canada, consider the tools you need to run and grow your business effectively. A reliable POS system should seamlessly process all payments and offer advanced inventory management, but you might want to look for different features depending on the type of business you operate.

For example, retail businesses have different demands from service-oriented ones, influencing POS system selection. A busy cafe might have different needs than a clothing boutique, and a small business POS system that works for a plumber understandably might not make sense for a fitness studio.

Regardless of your industry, considering cost, security, PCI compliance and ease of use can help you choose the right POS system to meet your needs.This article helps you understand what to look for in a POS system so you can make the best decision for your business.

What is a POS system?

A POS system empowers businesses to efficiently ring up sales and manage payment processing. Besides enabling sales transactions, the right POS system offers extensive management capabilities, improving operations. It’s like a cash register with brains, and it can be broken down into three basic components:? {#what-is-a-pos}

1. Hardware

A POS has hardware that allows you to accept payments.
This includes devices like card readers, barcode scanners and receipt printers, which are all crucial for daily operations. Your POS system should allow you to accept all forms of payment, such as cash, credit cards, and mobile POS options. If it makes sense for your business, your POS system should also print receipts, store cash in cash drawers and scan barcodes.

2. Software

POS software is the digital brain of your operations. At a basic level, it helps you look up items and process sales. But more robust point-of-sale solutions also feature helpful tools like sales reporting, customer engagement software, inventory management, and more. Such systems are vital for offering customer loyalty programs and maintaining robust inventory reports.

Having everything on a single online platform is fantastic. No files saved on a computer. Everything is accessible in two a and a half seconds with Square.
– Dimitri Chapuis, President and Business Administrator of Papillote & Cie, Quebec, Canada.

3. Payments

POS systems also take care of routing funds to your bank account after each sale. The right POS for your business can ensure that you capture every sale and help you streamline time-consuming administrative tasks.

When do you need a POS system?

If you want to accept credit and debit card payments and have a streamlined system for tracking sales, it’s a good idea to invest in a POS system built.

Unless you have a solid process for recording each sale electronically, it’s hard to have an accurate understanding of what you’re selling and how you’re selling it. And the more data you have about your business, the more you can make informed decisions. Plus, having a POS system helps your business appear more legitimate, which is especially important if you’re just starting out. This emphasis on legitimacy can strengthen customer relations and brand development.

Factors to consider when choosing a POS system

• Initial setup cost (time and money)
• Payment processing costs (e.g., % of sale + charge per transaction)
• Other monthly processing fees (e.g., PCI-compliance fee, chargeback fees)
• Equipment costs/rental fees
• POS software fees
• PCI compliance (i.e., how you process payments, connect your systems, and manage customers’ data securely)
• Level of mobility
• Ability to accept EMV chip cards
• Ability to accept NFC payments like Apple Pay, Google Pay, and contactless cards
• POS software features (e.g., invoices, ability to store customer data safely, inventory management, customer feedback)

Benefits of using a POS system for credit card processing

A system with efficient payment processing capabilities allows for smooth operations in both retail and service environments. While card payments can be handled via standard methods, POS systems offer superior inventory management and customer data handling. This is vital for streamlining stock monitoring and overall business operations.

For example, Square POS can send you alerts when you’re running low on an item so you can reorder in time. Good POS systems also offer comprehensive sales analytics and data. With Square, you can see if you tend to sell more croissants or muffins on Mondays, for example — a helpful insight when you’re placing an order with your bakery.

POS systems often offer multi-location management so you can effectively monitor your business’s different branches. However, it’s worth noting that some POS systems charge extra for each additional location, which can be frustrating if you’re trying to expand. (Square offers multi-location management for free).

Square also offer sellers free chargeback protection for up to $250 each month. If a customer disputes a payment, we go to bat for you for all chargebacks and cover the cost even if the bank doesn’t rule the case in your favour.

How to choose a POS system for your business

The type of business you own also matters when it comes to choosing a POS system that will enable your success. Here are some things to keep in mind when choosing a POS system for retail, contractors and home repair businesses or bars and restaurants.

Choosing a POS system for retail

When evaluating a POS solution like Square, consider features that not only support POS transactions, but also enhance overall business management. For retail, a comprehensive POS system that integrates inventory management and connects to a barcode scanner and printer is essential. Square POS does all this and more. It works seamlessly to connect your in-person business with your online business if you have one and also helps manage invoices.

Choosing a POS system for contractors and home repair

If you run a home and repair business, you need a super-mobile POS system that allows you to easily take secure credit card payments at the job site, even if you’re in a remote location without connectivity.

You can accept chip cards and contactless payments and protect your business with Square’s contactless and chip reader. This is an unachievable feat with conventional credit card systems, highlighting the advantages of a mobile POS setup.

If you’re in a spot with no Wi-Fi or phone reception, you can still take offline card payments with Square and get paid wherever your business takes you. Want to bill your customer instead? Square Invoices is free and great for contract work of all kinds. You pay just 2.8% + 30¢ for each invoice paid securely online.

Choosing a POS system for bars and restaurants

Bars and restaurants have unique needs, requiring specialized POS system features. Look for a restaurants POS system that makes it easy to change menu items and communicate with the kitchen or bar with item modifiers and printed kitchen tickets. It should also give you the ability to split tickets between diners and keep open tickets for customers who want to settle their tab later on.

With any POS system for restaurants and bars, you want to easily reconcile cash sales and keep track of payouts so closing out at the end of the night is a breeze. And don’t forget about built-in tipping to keep your staff happy. Square POS does all this and easily syncs third-party apps like Uber Eats. Not to mention the fact that the initial set up is super easy: All you need is a smartphone to get started.

Frequently Asked Questions About Small Business POS Systems

1. Do I need to pay a monthly fee for POS platforms or using a POS system?

POS systems include different software and hardware components, each with unique costs. For example, POS software providers often charge a monthly fee based on your business size and sales volume. Merchant service providers might also charge other ongoing monthly fees, along with PCI compliance fees, impacting your overall payment processing expenses. The hardware (payment terminal) could come from a separate company and incur a rental fee too — and an annual contract.

All this can cost anywhere from $60 a month for the most basic of POS systems to $150+ a month for software with moderate functionality. To put this into context, this would represent an additional 0.36 to 0.9% per transaction for a business with $200,000 worth of card sales.

But that’s not all. There are often extra costs for additional users, advanced reporting and multi-location management. Some small business POS systems even charge extra for full customer support. And that doesn’t even include credit card processing fees (which often have hidden fees of their own).

Square is different. You get a fully integrated, feature-rich POS system for small businesses. Square’s fees are just 2.5% for all major credit cards and 0.75% + 7¢ per Interac chip and PIN or tap. See funds deposited into your bank account as fast as the next business day. That’s it. No hidden fees, long-term contracts or commitments.

Additionally, Square does not impose PCI compliance fees, and you won’t encounter POS software fees with Square POS. Our friendly customer support team is knowledgeable about our products, and you can get answers with our phone and online support center. Our hardware is affordable, secure and attractive so you can feel good about showing it off on your countertop.

2. What alternatives to a POS system can I use?

If you feel you don’t need a POS system but still want to securely accept credit cards, consider relying on invoices. Square Invoices is available for free through Square POS and provides an easy way to send customer invoices. It includes unlimited invoicing for free and you pay 2.8% plus 30¢ for each invoice paid securely online.

If you need to charge a customer on an ongoing basis, say for a weekly dog-walking service or monthly catering delivery, you can set up recurring invoices. Your customers can even securely store their cards on file so you get paid automatically. The processing fees for a card on file are 3.3% plus 15¢ per invoice.

3. What’s the difference between POS systems and cash registers?

POS software platforms are versatile tools that can streamline various aspects of business, catering to specific industry needs. Small business POS systems seamlessly integrate credit card payment hardware and software, enabling comprehensive business operations and inventory control.

Cash registers, on the other hand, are simply machines that record sales, give change, and store money. It’s vital to remember cash registers don’t support credit card transactions and need separate processing systems. Cash registers have basic functions and can do some simple reporting, like telling you how many sales you made that day.

Investing in the best POS system ensures you leverage the full potential of technology in your business operations. Square POS, for example, can show you your busiest times of the day and week. You can see your best-selling items and what percentage of your customers are new versus returning.

Employing POS platforms can also help you optimize staff schedules to boost efficiency and customer satisfaction.

All of these benefits are super useful for making informed decisions about how many employees to schedule for different shifts, which products to stock and how to focus your marketing energies.

If you choose to run your business with Square POS it integrates beautifully with Square’s stylish, simple hardware and can easily be connected to a cash drawer.

4. If I buy a POS system, does that make me PCI compliant?

Short answer: not necessarily. PCI compliance requires that you comply with a checklist of requirements designed to ensure sellers and organizations process cardholder data safely and securely to prevent fraud or data breaches.

Selecting the right POS system with thorough PCI compliance is essential for maintaining secure payment processes. However, just because your POS software or payment processor is PCI compliant doesn’t guarantee that you are as a seller.

For example, imagine you get a PCI-compliant POS system and card terminal. You might think you’re good to go, however, PCI compliance is about your entire payment ecosystem. How secure is your Wi-Fi network? Where do you store customer data? (Hint: Keeping credit card info in a spreadsheet doesn’t pass muster.)

If your whole payments system doesn’t meet PCI-compliance requirements, you’re not actually PCI compliant. It’s especially tricky because PCI rules can change.With traditional POS systems, you might need to manually update the software, payment terminal, Wi-Fi or other systems in your environment to keep them compliant.

Fortunately, if you use Square, we’ve got you covered. Since we provide the whole payments environment, we make PCI compliance simple. Basically, we provide an integrated solution across payments, POS hardware, software and customer data.

We use end-to-end encryption to keep your customers’ data safe from the moment the card touches our system. And because we push updates over the cloud, if the PCI checklist changes, you always have the current version and can rest easy knowing you’re compliant.

You can learn more about PCI compliance and how Square uses industry-leading PCI standards here.