As a merchant, you have two main means of collecting payments: point of sales systems (POS systems) or a basic terminal. Both POS systems and terminals allow you to accept card payments, which is essential considering the volumes of customers who prefer to pay by card. However, there are some considerable differences between the two options.
Detailed below, you’ll find an overview of the main differences and the various formats that terminals and POS systems come in. We’ll start with card terminals.
A card terminal has one main function: collecting card payments. However, some of them do have additional features, including the ability to accept vouchers and apply discount codes, but they lack the multifunction choices that POS systems will offer your business.
You’ll find several types of terminals available, including:
- Mobile card terminals. These make it easy for merchants, and self-employed workers to collect payments on the go, and to serve customers in queues and at tables. Depending on the type you get, these are available as separate devices, they can be plugged into a tablet or smartphone or attached to a fixed terminal.
- Virtual terminals. These allow you to accept credit card payments via the phone, fax and from online orders, however, these payments need to be processed manually.
- Countertop terminals. These were often once the preferred method for retailers. However, traditional counter top terminals are becoming less popular these days as merchants are starting to opt for mobile, contactless and Bluetooth terminals. Another reason for their declining popularity is the introduction of POS systems, which allow the merchant to do far more.
- Wireless card terminals. These offer greater portability and flexibility as there are no cables installed. However, you need access to a wi-fi connection.
Unlike a traditional terminal, a POS system can complete multiple tasks and improve the way your business works. Moreover, they offer a level of analytics that a regular terminal can’t. Effectively using a point of sales system can enable the smooth running of many of the major areas of your business.
For many merchants, a POS system has become the favored method of collecting payments due to the additional features such as:
- Inventory management
- Staff management
- Tracking Sales
- Spotting trends
- Calculate sales taxes
- Adding discounts
- Recording detailed data
Just like regular terminals, POS systems come in different formats, including mobile and iPad forms. Mobile POS systems can be integrated with static models. They can also be cloud based, which some business owners prefer as they can access the information whether they might be.
What to Look for in a Payment Terminal
Of all the features to look for in a payment terminal, security and EMV compliance should be among the top priorities The retail sector is frequently targeted by fraudsters. And although the introduction of EMV has led to a reduction in card present fraud, retailers cannot afford to get complacent when it comes to security.
However, in addition to EMV, you also need to look for tokenization or encryption so if a system was hacked, the data would be useless to a fraudster. Moreover, the system and the payment processor you work with should implement PCI compliancy.
Other considerations to look for are its latest features. The ability to accept contactless payments like Apple Pay will allow you to cater for a wider group of consumers and you’ll be ready for the contactless payments trend as it grows.
44% of U.S. consumers now use contactless cards, according to the 2016 ‘Consumer Attitudes to Mobile Banking & Contactless Payments: US’ study by Juniper research and Apple Pay currently dominates the contactless payments arena.
What to Look for in POS Systems
Again, top of the range security is imperative; POS systems have consistently been targeted by criminals in recent years.
It’s predicted that despite the efforts being made to prevent malware attacks and similar, POS system fraud isn’t going to go away in the immediate future and POS system attacks are already a common theme in 2017. Kiosk vendor Avanti and fashion chain The Buckle are both among the latest victims, and experts are predicting more sophisticated attacks in the future.
Does it improve customer experience – ensure that the features the POS system has can enhance the service that you give to customers but also improve the way the restaurant works behind the scenes. Accounting and managing inventory are just some of the ways that a POS system can aid your business and reduce costs.
Which Option Is Best for You?
The best option for you will depend on:
- The nature of your business.
- Whether you are looking for solutions to specific problems.
- How many customers you serve.
- The size and complexity of your business.
- Whether you want to improve your marketing efforts.
- how it will best serve your business long term.
- and ultimately the kind of experience a customer wants when they shop with you.
However, the option you invest in will also be determined by your available budget and whether the platform gives you genuine value.
If you have a small business and less complex needs, then a regular terminal might be enough. But, if you have a larger scale business, a POS system could offer you the level of sophistication you require.
If you are still undecided, your payment processor will help you decide between a terminal and a POS system, and which model will be best for your business.
Whether you’re looking at system that simply collect payments, or for a more sophisticated payment processing services, there is an option out there for you.
A simple terminal will fulfil your basic needs of accepting card payments. However, if you’re looking for something that is feature rich and that can simplify the key areas of your business and make it more productive, it’s likely that a POS system will be far more beneficial to your business overall.