A point of sale (POS) system can be a great addition to your business. Capable of far more than simply taking credit cards, POS systems offer features like inventory management, reporting, and even time clock options.

In my work for CardFellow, a leading resource for small businesses looking for credit card processing and terminals, I regularly test, research, and write overviews of equipment. As a result, I field a lot of questions about POS systems.

But one question always comes up: “There are so many options. How do I choose?”

The good news is that picking the right POS system doesn’t have to be a chore. Follow these three steps to find the right POS system for your business.

1. Know what’s most important to you

There are two approaches to deciding on a POS system: choosing based on features, or choosing based on costs.

Choosing by features

If particular features are the most important thing, you should choose a POS system first. But if low costs are a priority, you’ll actually want to find a credit card processor, then choose from the POS systems that processor can support.

Know which features you need

When I say that you should find your POS system first if specific features are most important, I’m talking about less common features. POS systems offer basic capabilities standard, including credit and debit card acceptance, reporting, and inventory management. For restaurants, the ability to split checks and add tips is also common.

So, what sort of features do you need to look for specifically? Here are the main ones:

  • Online ordering for in-person pickup (restaurants)
  • Delivery tracking for food or non-food businesses (pizza shops, florists)
  • Age verification/ID prompt (liquor stores, tobacco sales)
  • Integrated appointment or class calendars (healthcare, beauty salons, yoga studios)

If those features sound like must-haves for your business, it’s worth finding your preferred system first. Be sure to explicitly ask the POS company or processor if the feature you need is included, or check the POS company’s website.

Use a product directory

The easiest way to research POS systems and find specific features is to use an online POS system product directory, like the one we have. These directories provide overviews of POS systems, so you can view important information quickly. You’ll be able to narrow down choices by the manufacturer, features, processor, and more.

Note that choosing your POS system first may limit your choice of processors, which can result in higher costs overall. We’ll get into that more in a minute.

Choosing by cost

If you scanned the list above and decided that standard POS system features will suit your needs, finding a processor first is likely to save you time and money. While POS systems (and costs to take credit cards) aren’t cheap, you may be able to reduce expenses by finding a competitive credit card processor and then choosing your system from the available options.

Picking a processor before a system gives you a much larger pool of options. Credit card processors usually offer multiple different brands and models of equipment, so you’ll still get to choose a system that fits both your needs and your budget.

When choosing a processor, start by getting quotes from multiple companies. A quick search online for credit card processing comparison sites can help you find services that will allow you to compare quotes privately, without sales calls. After you get quotes, you can ask about available POS systems. You’ll have a smaller range of choices, but the systems will be some of the most popular and user-friendly.

Many of the businesses I work with take this route when choosing a POS system, and find that it’s helpful to choose from tried-and-true popular systems even if it’s a smaller selection of the total systems on the market.

2. Decide if you’ll accept proprietary POS systems

Some POS systems are proprietary, meaning that you have to work with a specific processor in order to use that system. This isn’t inherently good or bad, but you should be aware of possible pros and cons.

A pro is that it may require you to do less research, as you won’t need to review pricing from multiple processors. You’ll get pricing from the processor that supports the equipment and that’s that.

A con is that you don’t have as much ability to negotiate your costs. Since the processor knows that you have to work with them to use the system, your competitive advantage disappears. You can’t simply go to another processor. Moreover, if you decide to switch processors in the future, you’ll have to purchase a different system, since your current one won’t be compatible with another company.

When making your decision, think about the worst case: If you switch processors for some reason, can you afford to buy new point of sale equipment even if your current system isn’t outdated? If not, a POS system that only works with specific processors might not be the best choice for your business.

You can identify systems that require specific processors by disclosures on the manufacturer’s website. It will often state the name of the credit card processing company that can support the system. By contrast, if it works with multiple processors, the site may mention that the system is “processor agnostic” or list multiple processing partners. If in doubt, you can also ask the POS manufacturer directly. They’ll advise on processors that support their system.

3. Decide if you’ll lease or buy

Another consideration when deciding on a POS system is how you’ll pay for it. Since POS systems are more expensive than basic countertop credit card machines, you’ll want to think about what makes sense for you.

Some companies will offer the option to lease equipment instead of purchasing it outright. The benefit is that there’s little or no upfront cost, but remember that leasing equipment can cost you a lot over time. The monthly fee you’ll pay could add up to many times the retail cost of the system. Be sure to check the math yourself, and scope out what it would cost to buy the machine outright.

It’s also worth noting that leasing often comes with a contract that can’t be cancelled for four years or more. The contract is often with a separate leasing company, not your processor, so even if you stop using your POS system, you’ll still be on the hook for the equipment lease.

Purchasing a POS system outright is a bigger upfront commitment financially, but you’ll have the benefit of owning the equipment. Many POS companies offer free software updates, which will help keep your system current. If you choose to buy, you may want to consider purchasing a system with the newest technologies, like contactless (NFC) capabilities, so that you’ll be able to take a wider range of payment types.

The tips outlined above will help you find the right system for your business in no time. Just remember:

Decide if you’ll shop by features or by processor

  • Choosing by features: Use a product directory to research POS systems and choose the one you want, then set up a merchant account with a processor who can support that system.
  • Choosing by processor: Choose a processor with competitive rates and fees. Then choose a POS system from the processor’s supported systems.

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Ellen Cunningham
Ellen Cunningham

Ellen is the Marketing Manager for CardFellow, leading provider of free credit card processing comparison tools. She has a degree in English and spends her days researching and writing about everything related to credit card processing.