Point of sale most commonly refers to in-store electronic cash transactions, although it can refer to online transactions too. Point of sale terminals are used to register these transactions via card. This includes contactless and mobile payment in newer devices.
The term ‘point of sale’ refers to the time and location a customer buys a product or completes an electronic cash transaction. Different devices are commonly used to complete transactions in-person, e.g. PCs, tablet computers, etc. These are known as POS terminals or POS devices.
Nowadays a wide variety of devices can be used to complete POS transactions, including:
Electronic cash registers and POS terminals
Tablets and iPads
Besides dedicated POS terminals, which already have all the necessary hardware and software, each of these devices need to use special POS software. Portable devices, like smartphones, are becoming increasingly popular as POS terminals. This is because they allow transactions to be completed outside the usual restrictions of a store.
The majority of modern POS terminals use cloud-based POS software. The main benefit of cloud-based POS software is that data doesn’t have to be stored locally and therefore facilitates providing an omnichannel solution. Instead, it’s stored in the cloud and accessed by each device when necessary as actions are completed. This increases data security, gives users remote access, and gives much better flexibility for businesses that need a portable solution. As long as the POS device can log in to the POS software, it can technically be used anywhere.
POS software usually performs a number of additional functions other than simply registering transactions. This includes inventory management, reporting, loyalty and referral program management, staff rota functions, etc.
Because of the constraints of monolithic systems, there’s a growing call to modernize the point-of-sale - with what Forrester calls a “new generation” of POS applications. “By judiciously exploiting cloud and mobile distributes data and functionality for secure reliability”, the point-of-sale goes “from transaction to experience”.
Forward-thinking brands in particular are turning to modular-based or headless POS solutions, and breaking out features such as reporting, price calculation and promotions from their monolithic POS. Companies can build their ideal POS stack from the ground up - adopting a best-of-breed approach to the products or vendors they shop from, and embedding scaleability and flexibility into their workflows.
From a technical perspective, a headless approach means decoupling the front-end (user interface) from the back-end (data management and processing) of the POS system. By removing the divide between the front- and back-end, a headless POS system enables easy integration with other systems and services, such as inventory management, CRM, CDP, promotion and loyalty platforms and marketing automation software.
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