Picking the ideal POS system is a big decision because it can help you manage numerous areas of your business. Once you're settled on a system, it will become an essential part of your operations.

As a result of this, it's not something you want to replace that frequently. That means you need to do your due diligence and decide on the best one for your business. Part of this is understanding how much these systems cost. This piece will provide you that information so that you can select a POS system that offers you the best balance of power and affordability.


Let's start by taking a look at the two main sorts of POS systems. This post will allow you to understand the different components that make up each, and how those components affect the total cost of the POS system. We will even show you how the costs might affect your overall business.

On-Premise POS

On-premise POS systems are a heritage holdover from the times of installed applications. They are typically categorized by a network of POS terminals or computers that are connected to a central server in your business. The program is installed on each of the terminals and the server. The server also stores all the business' data like stock levels, sales performance, and more.

On-premise POS systems that are found in restaurants or pubs typically use a proprietary touchscreen interface. Those used in retail stores typically appear to be a desktop computer with a monitor and keyboard that usually sits on top of a cash drawer. Then there are all the smaller pieces of hardware like barcode scanners, receipt printers, and a credit card reader that you will need to purchase for every Magento POS terminal.

Cloud POS

A cloud POS is a system that doesn't utilize an abysmal server. Instead, the POS software runs in the"cloud," a remote data center. This is also where all your company data is stored. Rather than using proprietary hardware or a desktop computer as a terminal, this sort of POS software typically runs on a tablet, such as an iPad or Android apparatus, which may give cashiers and waitstaff mobility which they would not have otherwise.

Cloud POS systems still use the same smaller pieces of hardware, like a credit card reader and barcode scanner, but you are going to need a couple of things you won't find in an on-premise POS: a tablet and a rack.

When choosing a tablet and software, make sure both are compatible with each other.

Stand: A stand could only be something fundamental used to prop up or tabletcomputer, but getting a proper stand turns your hardware and software into a suitable POS system.

Because of the portability of tablets, cloud-based systems can also be called mobile POS (mPOS) systems. These allow you to run transactions wherever you are in your shop. Compare to an on-premise solution, it's a much smaller setup which translates into lower costs on hardware as well applications.

Additional advantages of a mPOS include features like included customer support, automatic software updates, and 24/7 access to your business' data. You'd have to pay extra for those with an on-premise setup.

Many smaller businesses use cloud POS systems. Think of your neighborhood cafe or boutique. Have you ever noticed your payment information and signature is taken on an iPad? That is an iPad POS at work. While on-premise and cloud systems have some of the same components, lots of the costs, as well as the best way to actually pay for the hardware and software will vary. Let's look at some of the different costs that come with every system.

Cloud POS software can be sold three unique ways: upfront, per transaction, or a subscription.

The most common way to cover cloud-based software is through a monthly subscription fee. While you don't technically own the software in this situation, you do have access to free automatic upgrades, included customer service, and several other benefits like managed PCI compliance. This monthly cost can be anything from $50- $130 per month each POS terminal, in addition to the cost of add-ons.

In some situations, you can get around paying a monthly fee. Rather, some companies will let you pay for a year or more up front. In doing so, you typically pay less than you would if you pay month-to-month. If you do this you can expect a year of support to begin at $900 per POS terminal.

Pay Per Transaction

With this payment method, the software itself is free, meaning there's no monthly or upfront fee to pay. However, that doesn't mean it's totally free. Instead, you pay a transaction fee each time you conduct a sale through their software. With this method, take the time to compare vendors to understand what their fees include and how that affects your profit per sale in addition to the overall profitability of your business.

These fees can fluctuate depending on your provider. However, on average you can expect to cover your POS vendor between 0.5% to close to 3% per transaction. This can end up costing your company thousands of dollars per year based on the quantity of sales your business has.

On-premise POS software only has the option of being bought upfront and you have to pay for things like customer service individually. Together, the software and hardware for an on-premise system can cost up to $5,000 for a single terminal. And that doesn't include the additional customer support you likely want to buy. That can cost you another several hundred dollars per month, depending on the service package you select. Bear in mind, with on-premise software, you'll most likely need to rebuy the software whenever there is an upgrade to it.

Whichever kind of POS system you use, you will still require POS hardware. Let's look at how hardware differs between the two kinds of systems, as well as how that will influence the overall cost of your POS buy.

For an on-premise system, you may notice things getting pricey because of all the extra equipment involved, like keyboards and monitors for each POS terminal. Typically this hardware is proprietary, meaning that it is made or licensed by the exact same company that makes the software. You want to either buy it from them directly, or sometimes, you may be able to buy it from an approved reseller. You can't simply buy these things on Amazon. Not only is this inconvenient, but it is also more expensive. This could add up to $3,000-$50,000 annually (including the cost of software) because of yearly maintenance fees.

Having a cloud POS, the largest cost is typically the tablet computer that functions as your register. Tablets can cost from $400 to as much $1,200. While technically almost anything can serve as a POS stand, we highly recommend purchasing a purpose-built tablet enclosure. Expect to pay between $100 -- $200 for a tablet POS stand.

You can save additional money based on the fact that cloud POS systems used commodity hardware. By way of instance, you can an buy an iPad from millions of vendors. Nothing is stopping you from waiting for a Black Friday deal at Best Buy and saving a couple hundred bucks.

These things are essential to keeping your business running smoothly and simplifying the checkout procedure. Here are just some examples of things you should consider buying:

Barcode Scanner

Make it easier on yourself and your employees. There is no need to type in a recorder manually, or search for products available. Just use a barcode scanner to speed up that process. Don't have barcodes? Many POS systems can create them automatically.

Wireless barcode scanners can be used all over your business (if you want to bust some lines). They can also be a handy tool when managing inventory. Barcode scanners can cost you as low as $30 for a simple scanning gun, but you could pay over $2,000 if you're looking for the stationary scanning beds found in many department and grocery stores.

Credit Card Reader

Many people don't carry cash with them on a regular basis, so a credit card reader, particularly one that can accept mobile payments such as Apple Pay and EMV payments (chip cards), is all but essential for meeting customer demand. There are affordable options which run from $50-$150, but there are also more costly choices offering additional functionality. By way of instance, a reader that connects to your POS over Bluetooth is going to cost you more than a wired option. Some readers can cost you over $500.

Cash Drawer

Many businesses are going cashless, but consider your target audience and general location before making the decision to give up cash completely. Cash drawers also aren't very expensive and typically cost between $50-$200.

Give your customer the option of a physical receipt by including a receipt printer to your setup. The cost of the printers can be as low as $20 and as high as about $350.

In a restaurant setting, you will need to be a printer for a printer for the kitchen. This extra printer sends orders to the kitchen directly from a restaurant POS in a clear format so there's no need to write orders and send them by hand.

Individually, these items might not cost much, but the price tag for everything can easily accumulate, especially if your shop has more than one POS terminal. Some POS companies make it simple to get started by selling starter kits with gear based on your business type. Start with a budget in mind, and then pick and select the hardware choices that will fit within it.

In spite of the flexibility to pick and choose a POS system that works for your budget, some merchants prefer to use cash registers. A cash register plus a credit card reader will provide you what you need to run a business at a very basic level. However, the additional functionality of a POS more than makes up for the higher cost.

POS vs. A Cash Register

The debate on which one is better for business is as old as POS systems themselves, and cost is one of the principal factors business owners use to pick between them.

While cash registers are less expensive, you still have to purchase extra hardware like a card reader individually. That said, you can get a basic register for around $100. You can even purchase them on Amazon.

On the other side of this coin, cash registers are very limited in their functions. All they can essentially do is accept payments. A POS system makes up for the higher price by helping you manage many other aspects of your business. It can be the central hub for all your critical business tasks like inventory management, analytics and sales information, client and staff management, and much more.

Which is Best for Your Business?

As the business owner, only you understand enough about your business to make the ideal choice. Consider all of the functionality that you and your employees want from a system. The answer to that, in large part, comes from what your customers value about your business, in addition to how you prefer to operate.

With that said, here are some points to consider:



Mobile POS systems offer you the freedom to manage your business where and the costs are much lower than more stationary systems. If you're ever away from your business, a mPOS provides you the ability to access your store's data without needing to pay someone to export it for you making it more difficult to handle multiple locations.




Add-ons are POS features which don't come standard with your POS software. This includes things like email marketing and ecommerce. Both these options can drive business to your physical location and boost your profits without the costs of you having to keep your doors open 24/7. Add-ons for things like accounting software ensure that the numbers and data from your sales are almost always correct and that you're always working with the most accurate and recent information. Add-ons increase the amount you pay for your POS applications depending on how many you decide to have.


Cloud POS providers make sure your business data is encrypted so that no sensitive data may be used against you or your customers.


But a modern cloud POS has a very simple layout which you can personalize to your liking. Everything will be a tap away.


Staff Management

 Usually, staff need to clock into and out of their changes using a timeclock or other method beyond your POS systemCloud POS systems have staff management capabilities built in so that staff members clock clock in directly from the POS.




On-premise POS systems have much older and slower processes. It takes much longer to get business data and even total sales. Cloud-based systems give you access to your store's information even if your shop's Internet connection is down.


Overall Costs


With a cloud POS system, you pay for your software, hardware, and run your company. An on-premise POS system may have you paying tens of thousands of more dollars per year for software upgrades, having someone come and fix and replace hardware, customer support, and more.



The cost of a POS software or a cash register varies and it can be a huge expense if not selected correctly. It can be a hard choice, but arming yourself with knowledge is the best first step.