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Considerations for Selecting a Point-of-Sale (POS) System

Modern point-of-sale systems perform functions beyond simple facilitation of cash transactions. System hardware and software offer the ability to accept multiple payment methods, manage customer data, and enhance efficiency.

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Updated:

February 10, 2025

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A point-of-sale (POS) system is the set of hardware and software components that allow businesses to facilitate sales. What may first come to mind is a cash register. However, modern POS systems go far beyond simple cash transactions. POS systems allow a business to accept multiple methods of payment – cash, credit, debit, virtual wallet, etc. They also offer a plethora of features that can be used to enhance the management efficiency of the business.

There are numerous POS systems available on the market. In choosing a POS system, farm businesses (retail and experience-based) will want to align business characteristics and goals with the features and capabilities of the POS system. Ideally, the "right" POS system will allow owners or managers to improve the productivity and efficiency of their business and improve and enhance customer service all while growing and adapting with the business as it transitions through time.

Due to the number of POS options available, it is crucial to have a firm understanding of business needs, both current and future. Some systems are designed to work more effectively with retail businesses while others are tailored to those that offer experiences. Likewise, having a brick-and-mortar location rather than a mobile business (ex. food trucks or being a farmers market vendor) can affect POS selection from both hardware and software perspectives.

Thought should also be given to the future of the business. What plans are there for business growth? The number of business locations operated, the number of system users, as well as the number of products or services offered, can all impact POS selection.

Customers have upwards of seven different methods of payment available to them. These include cash, check, debit, credit, digital wallet, pre-paid or gift cards, and virtual currency. And even within a type of method, there are options – for instance, there are several types of credit cards – Mastercard, Visa, American Express, and others. Among payment methods, credit cards are the most used non-cash form of payment (Federal Reserve, 2021). However, there are different credit card technologies that must also be accounted for. Cards utilize magstripe, EMV (chip), or NFC (contactless) technology. The use of NFC cards for in-person payments rose from just 0.8% in 2018 to 4.6% in 2020 (Federal Reserve, 2021). Therefore, using a POS system that allows a business to accept the method of payment that customers want to use is critical.

Consideration of security issues that must be addressed for payment card industry (PCI) compliance is a critical aspect of POS selection. All businesses that accept credit cards, whether in-person or online, must comply with PCI data security standards that address issues including the number of authorized users, access to hardware, hardware storage, and data storage. Many POS system providers will offer guidance through the PCI compliance process.

Businesses reevaluating their POS system should make note of all bottlenecks in the current sales process. Consider the following questions:

Are you able to accept all methods of payment that your customers present?
What is the ease of use for the current system?
What is the efficiency and accuracy of the POS inventory management system, particularly if operating through multiple sales channels, such as brick-and-mortar and e-commerce?
How responsive, and helpful is the service and support that is provided?

With clarity on business needs in relation to a POS system, a business owner can turn to assessing the multitude of POS options available. Analyze options regarding features that fulfill business needs, usability, and cost.

POS features are where vendors focus on differentiation from one another and why it is important to have fully assessed needs. Consider whether the system features will support the farm business in the future. Some of the features to consider in this respect include the reports generated, multi-store/location scalability, e-commerce integration, and third-party software integration (such as Quickbooks, UPS/FedEx, and others).

Also, consider how well POS features will support the day-to-day management of the business. Inventory management features are key in this regard. How quickly and easily can inventory be updated, new products added, or discontinued products removed from the system? If the business operates in more than one location or through multiple sales channels, is inventory updated in real-time? Some POS features provide features to assist in employee management such as time and payroll tracking and employee productivity and efficiency measures.

Customer service can also be enhanced through features offered by POS systems. Many POS systems offer features allowing a business to store and manage customer information and offer loyalty programs and coupons. These capabilities can increase the efficiency of the customer checkout process thereby improving the customer experience.

Technical and support features should not be overlooked in a POS system analysis. For instance, does the POS offer an integrated payment processor? If so, will the POS provider allow a business to use the payment processor from another provider, or will require theirs to be used? From a support standpoint, determine the level and modes of service support provided. For instance, are POS system providers available to assist the farm business outside of traditional business hours (8 am – 5 pm) and will they assist in completing PCI compliance documentation?

User-friendliness must also be considered when selecting a POS system. The full functionality of any POS system cannot be realized if the interface and operating system are difficult to navigate and understand for the users. And while all systems will require a time investment to learn how to use them fully and efficiently, consider how well each POS system enables the user to operate it to perform their tasks quickly and accurately.

The cost to obtain and maintain a POS system is the final area of consideration. There are several factors that will determine POS system cost including hardware components, software, payment processing fees, number of users, and additional fees for add-on features. Hardware may be bundled into packages or offered as individual components. Software prices may be offered in tiered levels with varying access to features or a set price per location at which it is used. Additionally, the software expense may be either a monthly subscription fee or a one-time purchase.

POS systems offer numerous benefits beyond processing transactions. The data collected through its features, if utilized, can assist in making more well-informed decisions. However, whether a business is adopting its first POS system or considering a POS system change, adequate time should be devoted to researching and analyzing the options available. Speak with other similar businesses for their recommendations and experiences and take advantage of demonstration trials that are offered by POS providers.