As a small business owner, the right POS system can serve as the heart of the operation, not only processing transactions, but also maintaining inventory and handling CRM. The only problem is that comprehensive programs of this sort can far exceed your business’s budget. So what’s the compromise? An increasing number of providers are bridging the gap with the goal of providing small business owners with affordable, comprehensive POS systems.
Transaction Costs
Small businesses typically look for a few key elements in a POS system, as exemplified by some of the current top performers. First, they need a basic card swipe system. In the past, companies typically rented card readers, paying a set rate each month to process transactions. With new devices, though, companies often pay per transactions, which makes the process more expensive. Square, one of the more popular platforms, for example, charges 2.6% + 10¢ per transaction, a comparatively reasonable rate.
There are lower rates out there, but typically you can only get them by opting for a lower quality system. Sam’s Club charges 1.29% + 15¢ through Clover, a free app, but the tool doesn’t do much besides run transactions. The same goes for Costco’s POS. In other words, if you want a POS that does more than run credit and debit cards, the affordable options may not really be options at all.
Hardware Pricing
One of the prime reasons that small businesses opt for systems like Square, PayPal, or even Sam’s Club for their POS needs is that budgets are already tight; small businesses are constantly hemorrhaging money just because they’re badly organized or have a lot of employee turnover. Luckily, the hardware for these basic systems, often known as a dongle, typically runs between $50 and $100. That falls within a small business budget, and it leaves room for other processing fees, such as those assessed by the credit card companies themselves.
Of course, if you’re looking for greater functionality in your POS system, you may have to resign yourself to paying a lot more – a complete restaurant POS system typically costs $1,000, minimum, but is usually more. And don’t forget to tack on any fees assessed by the credit card companies. As Sobel & Co. describe in their paper, “Check Out Fees Causing Headaches for All,” and their more recent updates, card companies wield significant power over fee assessment, and that’s on top of whatever charges the POS company applies.
Balancing Functions
Since most companies can’t afford – or don’t want to pay – thousands of dollars for their POS system and added fees, one option for businesses is to choose a free POS with paid functions. For companies that choose this option, the first step is to decide what operations the system needs to perform. Do you need your POS to do inventory, or does your business operate well with a separate inventory program? What about employee management? Some POS systems will handle scheduling and can separate users, while others are limited to a single account. The possibilities are endless.
Once a business has narrowed down its needs, it’s easy to determine what affordable options remain in play. Square is heavy on analytics and product listings, but some find the percentage fee too high. Other popular, free POS systems like Loyverse perform well offline, with a reasonable fee schedule for adding on employee management. It’s all about finding a system that’s affordable, intuitive, and a good fit for each business. But at least now small businesses have options.
Choosing a POS system remains overwhelming for businesses, but affordable and functional options do exist. Though high-end systems remain the gold standard, most have more features than even large businesses can use. You’ll be better off finding a POS system that’s just the right size for your small business.
