From the clunky cash register to the web-based Point-of-Sales system software – the management process in retail stores and restaurants has gone through a slow but very promising technological change.
An increasing trend in Cloud-based PoS systems among retailers and restaurants makes it one of the most sought-after tools in stores and restaurants.
In this article, we will go through the Past and the present of the PoS system. In addition, During the whole article, we will guide you through the best features of the modern-day PoS system and how it can help you to manage your staff, inventory, and other store-related operations.
Not only this but the article also hides the best startup idea on the PoS system which can make you your own boss! Yes, you heard it right!
Let’s proceed and dive deeper into the journey of the latest cloud-based PoS software and know what it used to be
What is PoS?
I know when I say Point of sales (PoS) you imagine a big bulky machine near the exit of a store. What you are seeing is true but a complete revolution has occurred. Let me explain to you what new-age PoS software is with a twist.
The latest PoS now comes in a compact form. As a result; now it is much more efficient in handling your staff, inventory, billing, and sales.
Let’s rewind the history of PoS and see what the ancestor of the system used to look like and what it consisted of!
The Past of PoS Systems
Well, the Image is self-explanatory. In detail; cash registers were used to give businesses the ability to ring up sales, store recipes, and, calculate taxes. You could also use it to generate the end-of-the-day reports for balancing the register and performing basic sales tracking.
But Lack of analytics & reporting and the inability to embed new technologies made cash registers obsolete.
The Present of PoS Systems
Today the cash register is an old man’s weapon now. Nowadays PC based POS systems and tablet-based PoS systems are trending.
Today’s POS comes with a lot of features that facilitate you to run your business smoothly. They have the ability to track inventories, log employee hours, manage customer relationships, and a lot more.
You can choose today from a wide variety of hardware. For the basic requirement, you can buy a tablet, cash drawers, credit card scanners, and a receipt printer. In addition, there are other components you can buy such as a barcode scanner, a kitchen printer, scales, and extra tablets for servers to get the orders digitally.
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These days PoS systems come in two models.
Let’s clear the doubt between these two
What is the Traditional PoS System?
This kind of system stores the data on the local servers and runs on a closed internal network.
For example, it’s like storing your family photos on the desktop of your own PC.
These systems come with a lightweight and significantly lower hardware cost than a cash register. All you need is to install customized software according to your use. The PoS provider helps you integrate the software and the system.
What is a Cloud-based PoS system?
Cloud-based PoS systems are also referred to as software as a service or web-based PoS. In this kind of system, your data is stored on the remote server, and makes the information is accessible online.
It’s like using Gmail and Facebook. You can get your data from the cloud anywhere. So you can manage your store on the go.
One of the benefits of cloud PoS systems is, I small of It can be a great startup idea.
It allows monthly subscription packages. So the store or restaurant owner can start using the software for a decided monthly subscription fee.
Let’s compare them profoundly:
| Traditional (legacy) PoS | Cloud-based PoS (web-based PoS) | |
|---|---|---|
| Cost | $30000-$45,000 annually | $7000 – $20,000 one-time investment |
| Software used | On-premise installation | Cloud hosted(online) |
| Hardware | Stationary terminal | Tablets & Mobiles |
| Payments | Upfront license fee + monthly maintenance | One time investment |
| Data storage | Internal back office server | Remote cloud servers |
| Maintenance | On-premise | Secure remote access |
| Limitations | Stationary hardware, data accessibility, system integration | Internet-reliant |
Why Does Existing POS System Software Need Upgradation?
You might ask why should I upgrade my traditional PoS system software. They work fine!
Well, your staff needs a compact system and you need anytime-anywhere management software.
Many retail shop owners spend a small fortune buying and updating such retail PoS systems. Although; there are certain problems with existing software-based PoS systems that we aim to solve.
The PoS system cost is high and also the maintenance and upgrading price is more compared to the cloud POS system.
Huge Machines and devices take up space in the store where you could have set up a whole new shelf.
The older billing systems in restaurants, cafes, Stores, Shops, and hotels are very bulky and hectic to use.
Bills are just a waste of paper and energy to set up printers and maintain them. New trends are direct email or SMS.
Management becomes hectic with such systems and if the system goes down everything halts, which means a loss to the business.
Why Cloud-Based POS Systems Are the Best?
It comes with a mobile app for customers as well!
There is a complete revolution coming that has changed how PoS systems look and work. Since 2014, iPad and Mobile PoS apps are on the rise and have made their way to almost every major country. And so these web-based PoS systems have leveraged that benefits to make your store operation mobile.
It’s one of the best mobile PoS systems that offer centralized or single-view systems for vendors to stay in command of various channels and stores. Many new features were added that were never tried before with the older legacy PoS systems.
Cloud-based point-of-sale systems, known as SaaS, are gaining popularity due to features such as cheaper prices, better mobility, and simpler management. Partnering with a respected vendor, such as clover app development services, provides smooth integration and continued support.
Knowing why a cloud-based POS system is best does make it attractive. However, as it is a business decision, you need to understand the value it offers to your operations.
SEE ALSO: Why Go With SaaS Application Development For Your Startup Idea In 2024?
Benefits of the Cloud-Based PoS Systems
Here are some of the key benefits and business values to expect from a cloud-based POS system.
Cloud-based POS systems are not tied to any specific hardware system. This means users can access the system from any device, such as a smartphone, tablet, or laptop, with an internet connection.
These cloud-based systems can adapt to business requirements without hardware upgrades. This also allows business owners to manage their operations remotely. It is beneficial for businesses with multiple locations.
With a cloud-based POS system, you don’t need to be present at your store; instead, you can control it remotely from your mobile or laptop at any time. So, in the future, if you want to move your business to a new location or open a new franchise, you’ll be able to do it instantly.
Whereas a software-based POS system requires setting up a manual VPN and hosting (and securing) a local server, cloud-based systems are a quick and easy alternative. They store data securely in cloud storage.
Cloud-based POS systems are designed to integrate easily with other systems, such as accounting, inventory management, and CRM tools. It provides real-time data on customer behavior, sales, inventory levels, and business reports.
Using cloud-based POS software, you can ensure quicker decisions and smooth data flow between different systems. Integrating with an accounting system allows businesses to track sales data alongside financial information, providing a more complete picture of the business’s performance.
Further, you can analyze customers’ purchase patterns with historical data access, making it efficient to design new business strategies.
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Where traditional POS systems store data locally on the business’s premises, Cloud-based systems bring robust data security with pre-built features.
Cloud-based POS software encrypts data both in transit and at rest, ensuring that sensitive information remains secure. This encryption is typically managed by cloud service providers, who ensure that the latest security protocols are applied.
Data is stored on multiple servers, which means that even if one of them fails, your data can still remain protected. Cloud-based POS systems are designed to comply with data regulation standards, such as the Payment Card Industry Data Security Standard(PCI DSS), making them far more secure than other POS mechanisms. This also needs secure data encryption and storage, which you can achieve through cloud computing. Plus, there are Advantages of Cloud computing that help establish a centralized data backup and give robust protection.
Cloud-based POS systems simplify inventory management by providing real-time visibility into stock levels and inventory movements. A high-quality cloud-based POS software can also analyze past data and forecast demand. Plus, you can track purchases and record sales quantity of products.
This ensures you have the right products in stock, reduces the risk of stockouts or overstocking, and improves margins.
Cloud-based POS systems store payment-related information like transaction history and customer card information in large remote data centers, which can handle huge numbers of transactions.
These data centers can be accessed via the Internet. If a credit card is used to make the payment, the merchant is charged a processing fee. The merchant account is the middleman between your store and the credit card company.
Cloud-based POS systems ensure that any employee of a merchant bank, payment gateways like Visa or Mastercard, or even your bank can’t access financial data. This is possible because of the Identity and Access Management(IAM) capabilities that the cloud offers.
These systems use a virtual terminal, a web-based application, to capture payment information for different types of transactions. So, in the case of a card-based transaction, the card information is tokenized.
Tokenization is a process where a piece of sensitive information is replaced by a surrogate value known as a token that can be used for authorization without exposing the actual card details.
Cloud-based POS systems also offer a subscription-based model, which can be more cost-effective than traditional POS hardware. This model allows you to pay only for the features and functionality you need, making it a more affordable option for businesses of all sizes.
Cloud-based POS systems have an intuitive, user-friendly interface. For example, in restaurants, these systems streamline operations without requiring any hardware installation. You simply install the app on your tablet, and you’re good to go.
Using a cloud-based POS system in your restaurant can decrease the time spent training employees, reduce miscommunication between staff, and minimize manual order errors. Your staff can easily assign customers a particular table and take orders for that table on the POS software.
With just a few clicks, you can access all business-related reports in one place in just a few seconds. These cloud-based systems also receive regular updates in the background, ensuring minimal to no downtime.
How AI Can Transform Your Cloud-Based POS Software System?
AI can help your POS software system become more brilliant and offer functions beyond the existing features. For example, you can track each transaction and its payment source to understand the customer’s financial condition. Fintechs can use this data to avoid the risk of lending money to borrowers with economic instability.
Similarly, there are multiple use cases,
AI-based Fraud Detection
Integrating AI into your cloud-based POS software enhances your ability to track each transaction and significantly improves security. For instance, if a person uses a stolen credit card, the POS machine can swiftly identify the fraudulent individual through AI integration.
Designing an AI system that leverages multiple technologies, including facial recognition and biometrics, you can ensure the person is the account’s original owner. This robust security measure instills confidence in your business operations.
Smarter Inventory Management
AI integration into your POS software can be a game-changer for inventory management. For instance, you can track each transaction for purchasing goods from your POS and use AI to analyze that data. This efficient process helps you understand the demand for specific products or services.
Following AI’s recommendations, you can manage inventory and prevent stockouts. This streamlined approach to inventory management can alleviate the burden of manual tracking and forecasting, allowing you to focus on other aspects of your business.
Superior Risk Management
AI can help you reduce the risk of financial loss by ensuring advanced data analytics. AI-enabled algorithms can collect data on each transaction and help financial companies make risk-free decisions. For example, fintech businesses that offer buy now, pay later facilities can decide on users’ eligibility based on their financial transaction data.
Enabling these advanced features will require integrating ready-made AI models or building custom models for your POS software system. However, you may need to fine-tune the ready-made AI models to apply custom logic. On the contrary, creating a mode specific to your needs makes sense, especially if you want advanced fraud detection and risk management features.
What did Your Customers get from Web Based Mobile POS System?
In addition to the vendor app, it is essential to incorporate cloud-based application development for the PoS system as there is a highly profitable reason for it. It provides a mobile application for your customers to place orders from your stores.
The end-users need to download a single app for all their nearby shopping needs. Every vendor that is integrated with this Cloud PoS will be shown to the users in their app.
They can choose their preferred vendor and then choose all the items that they want to purchase. If the vendors provide delivery services, the user can choose that or pick up their parcel from the store.
Now let’s come to the business model for the same!
How Web-Based Point of Sale as a Service Can Be a Great Startup Idea? (PoSaaS)
If you want to start your own business then selling PoS software to retail stores and restaurants can be the best business idea. POS software system for sale is the perfect business start-up for any entrepreneur who wants to make it huge in 2024.
You might ask how does it work?
You can build your own PoS system by hiring a restaurant app development company. Later you can sell the software (in this case an app) to various vendors on a monthly subscription-based model.
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Conclusion
Cloud-based PoS Systems seem a very promising alternative to current PoS system software. It is probably the best mobile PoS solution out there that gives a lot more than any other solution in the market.
If you run a restaurant or a retail store then web-based PoS can be a silver bullet solution for your business. Not only for users but for someone who wishes to make a fortune from this amazing PoS system, it’s an excellent startup idea.
Article By
Mayur Panchal is the CTO of Excellent Webworld. With his skills and expertise, He stays updated with industry trends and utilizes his technical expertise to address problems faced by entrepreneurs and startup owners.
