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Point-of-Sale Terminals: Transforming the Way Of Doing Business

Global POS Terminal Market

ICT | Mar, 2021

Operating a retail store requires a range of administrative management and marketing skills, which can range from putting together monthly sales reports to regulating inventory to run business smoothly. Having an efficient and reliable point of sale (POS) terminals make running business a little less overwhelming as they are modern and easy-to-use solutions to facilitate a store’s necessary operations. A POS system, synonymous with POS Terminal, can help to reduce paperwork, track inventory and market to your customers, which gives more time for the store owners to manage business rather than getting into details.

Point of Sale (POS) Terminal is an electronic payment processing system that enables customers to make transactions for goods and services at the time of checkout. POS terminals are extensively used in industries that have a point of sale such as a service desk, including physical retail stores, restaurants, lodging, entertainment, and museums. The network mainly consists of a main computer linked with several checkout terminals that are supported by different hardware components. The basic hardware features in POS systems include POS display, barcode scanner, receipt printer, payment terminal, and cash drawer.

·         Barcode scanners scan billed items

·         POS display unit shows billing

·         Payment terminal allows cashless transactions through debit card, credit card

·         Receipt printer prints the receipt

·         Cash register stores cash generated from sales

US Market Overview- Point of Sales Terminal

In 2018, North America held the largest market share of 22.23% in global POS terminal system, out of which United States accounted for the more than 75% share, according to TechSci research report. The growth can be attributed to booming cashless economy in the region, which has accelerated the adoption of POS systems, especially in retail and hospitality industries. The technological advancement in the payment industry, and greater focus on offering customized business specific solutions and EMV compliances in the region is expected to enhance POS terminal market in the region.

According to TechSci research report on “Global POS Terminal Market By Product Type (Fixed, Portable & mPOS), By Deployment (Cloud & On-Premise), By EMV Compliance (EMV & Non-EMV), By Industry (Retail, Travel & Hospitality & Others), By Region, Competition, Forecast & Opportunities, 2026”, Global POS terminal market is forecast to exhibit a CAGR of more than 9% during the forecast period of 2021-2026, growing from USD15 billion in 2019, owing to increasing use of Europay, Mastercard and Visa (EMV) cards. Point of sale (POS) terminals are used for handling payments and checkouts. Modern POS terminals integrate multiple systems into a single terminal to manage operations such as printing, card payments, billing, and cash collection. Moreover, need for user-friendly, secure, and convenient payment options is bolstering the growth of global POS terminal market. Large number of debit and credit card transactions is pushing the demand for POS terminals among retailers and other end-users. Additionally, reduction in the cost of POS systems and government initiatives to promote cashless transactions in various countries are expected to fuel global POS terminal market in coming years.

Benefits of POS Terminals for businesses

In recent years, POS terminals have evolved from just a sales portal to a comprehensive payment processing system that integrate with other business tools and offers advantages such as:

·         Automate Sales Processes

POS Terminals make transactions faster and easier for businesses as well as customers. Rather than sitting with a pile of cash and checks at the end of the day to evaluate sales, retailers can simply track the total number of transactions, average revenue per transaction, amount of refunds or returns, and customer’s payment methods with an efficient POS terminal. The business owners can also learn about the products that are not selling, the days and times they sell the best and evaluate how they perform at different price points.

·         Inventory Tracking

Powering the sales terminal, the store owners can check the inventory at retailers or more locations with stock counts and automatically reorder inventory every time a barcode is scanned into the POS. Also, the POS system automatically updates inventory when items are returned. Most POS inventory system also consists of ring sales, count inventory, and provide basic reports.

·         Card-Reading Capabilities

If you do not have a large space for a large cashier, mobiles POS systems can help, converting your smart phone or tablet into a POS for accepting card payments. Just connect card reader to the smart device, keep the POS open and when prompted, ask the customers to swipe, dip, tap their card for making the transaction.

·         Increased Revenue

As the transactions are increasingly becoming cashless, customers do not tend to have cash-on-hand, and they prefer to use debit or credit card for shopping. POS terminals enable transactions anywhere on a brick-and-mortar location to a popup store, so the customers do not have to find the nearest ATM to make purchases. POS vendors are enhancing security of customer data and chargeback protection to reduce losses and avoid fraudulent purchases.

·         Customer Management

The POS terminal captures data to personalize customer’s experience while shopping. Using contact information such as phone number, e-mail id, etc., businesses can send order updates, create targeted email campaigns based on their past purchases and other behaviours or demographics. Loyalty programs are effective tools to promote repeat purchases and attract potential customers, aligning rewards with their interests.

How POS terminal work?

The POS terminal can be on-site and web-based but the day-to-day operation to process sales remain the same with both mediums. On-site software is generally installed on the terminal of your server and vendors do not need any internet connection to process payments and the data is stored locally. On the contrary, web-based POS terminals are more common and easy to setup but requires internet connection to process cards and the information is generally stored on the cloud.

POS Setup

Create an account locally and login into the online interface. Add products and service offered by the store or business into the POS database. Add merchant account and payment gateway for credit card sales and set up sales tax rates. Set up tipping options, if applicable. Customize receipts with business information and return policy. Create employee logins and manage permissions. Connect to third-party software.

Logging into your local or web-based account, connect the hardware components such as card terminal, barcode scanner, receipt printer, and cash drawer.

Steps to process transactions

·         Scan the product barcode with barcode scanner to look up the item’s price. For online stores, this step happens when a customer finishes adding items to their cart and clicks on the interface.

·         POS system calculates the price of item, including sales tax and then updates the inventory count to show the status of item.

·         To finish the purchase, customers either use a credit card, tap card, debit card or other means to make the payment go through. Depending on the payment method, the customer’s bank authorizes the transaction.

·         The payment goes through, and the printer generates a printed receipt.

Technological Advancements in POS Terminal Systems

Thanks to rapidly evolving technologies, POS systems have undergone major transformation for more efficient operation. Here are some of the major POS terminal system trends dominating the market.

·         Mobile Wallets

Customers are replacing old payment hardware with new ones therefore physical stores are increasingly adapting NFC-terminals ready to take digital wallet payments. Replacing the use of credit cards or debit cards as well as cash, mobile wallets not only add to the convenience of the customers but also adds to the flexibility of business operations.

·         Cloud-based POS Systems

The web-based POS terminals are cloud-based, allowing data storage into the cloud. Unlike traditional POS systems, the modern cloud-based POS systems are more secure, reliable and take minimal time for system maintenance. A cloud-based point of sale system can help to streamline operations, increase customer satisfaction, and accelerate payment process, opening greater channel of integrating the system with other systems.

·         Data Analytics

The data collected through processed payments on POS systems provide useful insights for improving the business operations and make decisions that pertain sales and customer service. Some of the useful data include tax information, number of sales, employee productivity, and customer details.

·         Mobile POS Systems

With mobile POS systems, the attendants can reach to the customers to facilitate the payment process. The systems also enable customers to view different products and their respective product information for convenient purchase. With the advanced mobile payment methods, customers can avoid queue in business premises and avoid the waiting time.

·         Bluetooth Payments

Although online payments are convenient, the payment process may experience interruptions due to weak connections. Bluetooth mobile payments allow the making of connections to facilitate easy, fast, and secure payment methods.

·         On-Demand Purchases

On-demand purchasing applies when the customer shops at their convenience from e-commerce platform and only passes by the store to pick up goods. The POS systems with this feature are becoming more popular as they provide convenience and saves time.

·         EMV Payment Security

Newer POS terminals come up with built-in security features and EMV card readers is one of them. EMV stands for Europay, Mastercard, and Visa and is a worldwide standard for cards with computer chips. Using this technology, the transactions can be made safe and secure. Older magnetic strips keep the same data for every single purchase, which make them easy to copy and more vulnerable to hacking. Merchants can easily add EMV card readers to their POS system to reassure customers of their security for every purchase.

·         Self-Service Kiosk POS

Self-service kiosk POS systems are interactive terminal that allow customers to display a piece of information and streamline wait or cost by giving control to the customers to get the things done as per their convenience. Different industries such as airlines, retail, and hospitality are using self-service kiosk for enhanced infrastructure and eliminate the need for person-to-person interaction as they prevent passing back and forth of credit cards and other payment modes which can act as virus transmitters.

According to TechSci research report on “Australia POS Market By Product Type (Fixed and mPOS), By Deployment (Cloud and On-Premise), By Industry (Retail, Travel & Hospitality, Media & Entertainment, Healthcare, Education and Others), Competition, Forecast & Opportunities, 2024”, Australia POS market is anticipated to grow at a CAGR of more than 10% during 2020 - 2024 on account of technological advancements, affordable internet connectivity and increasing penetration of smartphones. Point of sale (POS) terminals are used for handling payments and checkouts. Modern POS terminals integrate multiple systems into a single terminal to manage operations such as printing, card payments, billing, and cash collection. Moreover, need for user-friendly, secure, and convenient payment options is further bolstering the growth of Australia POS terminal market. A large number of debit and credit card transactions is pushing the demand for POS terminals among retailers and other end-users across the country. Additionally, factors like low cost of the point-of-sale devices and easy deployment backed by the increasing inclination towards cashless economy are anticipated to positively influence Australia POS market through 2024.