Digital payments have seen a manifold increase in India in the last decade. India has progressed by leaps and bounds in adopting digital means of payments and transactions. The government’s digital campaign has sought to achieve a digitally empowered economy through Faceless, Paperless, and Cashless transactions.
The COVID-19 pandemic has surely pushed citizens to embrace cashless transactions in a big way. Although challenges remain for its widespread usage across the nation, the overriding convenience that digital payments offer has convinced both businesses and consumers to use them. Credit & Debit Cards, IMPS-NEFT-RTGS bank transfers, Unified Payments Interface (UPI), Mobile Wallets, PoS devices, and Internet-Mobile banking have increasingly become common.
A POS terminal or machine is now an integral part of a Store – be it a small neighbourhood grocery store, a multi-brand retailer, or an online shopping portal. It is an essential requirement for small businesses or a large national retail chain to carry on and expand their business operations.
Did you know? India had more than 4.5 million POS terminals by the end of FY 2020-21.
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What is a POS device or Machine?
POS means Point of Sale - and refers to the place where a business accepts payment for the sale of goods or services and where a customer makes payments on the spot for the purchase of goods and services.
Typically, the term “PoS machine” refers to a card terminal, Point of Sale system, or interface. Although the PoS machine is used to refer to one device, in reality, it comprises several hardware and software elements:
- Computer Monitor or Tablet
- Card machine
- Cash drawer
- Receipt printer
- Barcode scanner
- Electronic point of sale (EPOS)
A POS machine or a Card Reader is the hardware that enables a Store to accept payment from customers by swiping their Cards – Debit cards, Credit cards, Prepaid Cards, or Gift Cards. A Point of Sale transaction is completed each time the customer makes a purchase.
The POS machine or POS terminal is the digital equivalent of a Cash Register while also enabling streamlining processes and managing other business operations.
POS Technologies:
There are primarily four types of technologies. They are:
1. On-site server: Adopted by busy sales agencies like Grocery stores, Restaurants, the technology involves being physically deployed within the stores. The technology is renowned for its simplicity and quick absorption
2. Cloud terminals or Cloud machines: Considered to be the most modern POS system, a Cloud POS machine does not need a Server installed in a store, as the supplier manages it. Likewise, if any issue is faced with the terminal, the Supplier will resolve the issue. Business users, therefore, can focus on sales and managing the company instead of giving time for managing the server, etc.
3. Mobile terminals: As the name implies, mobile terminals, or m-POS, is the POS machine system that works on a Smartphone or Tablet. With the downloaded mobile transaction application or app, any mobile device can be a POS machine. This technology is appropriate for small businesses with a limited budget for going digital. With data stored on a cloud server, it offers the advantage of selling and conducting transactions anywhere.
4. Self-service terminals: This technology involves the customer performing their transactions to purchase a product or service. Businesses with large customers desiring quick transactions are likely to go in for this technology. POS examples using this technology are movie theatres, grocery stores, and restaurants too.
Types of POS Machines:
A POS device or POS machine is made up of all the hardware that together helps in smooth and secure checkout comprising of billing, payment, and receipt. The POS machine is supported by related hardware devices like a barcode scanner, epos machine (electronic point of sale) software, receipt printer, and cash drawer to complete the sale transaction successfully. The card reader, often referred to as a POS machine, comprises all types of hardware and software to facilitate payment via cash and credit or debit cards. These POS machines ensure hassle-free payment via cash, debit, or credit card.
The three main types of POS terminals or POS devices are:
1) Standalone Card Terminal: As the name implies, this type of POS terminal works without a cash register or POS software. Once the sale items are tallied and verified, the next step is to enter the sales amount on the card machine or card reader keypad. The machine follows up further by connecting with the merchant bank and the Card issuer for transaction approval and prints the receipt.
2) Integrated Terminal: This POS type is integrated with the electronic point of sale (ePOS) software. It facilitates sending the transaction amount from the till screen to the card terminal much easier. The total payment is calculated automatically, and a receipt is printed.
3) Cash Drawers: Cash drawers are usually connected to a computer or tablet. It opens automatically as soon as the payable amount is entered on the till screen. Further, the balance amount to be returned to the customers is also displayed, helping prevent pilferage.
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Common POS Systems in the Market
The POS devices widely used in the market include:
- Clonet POS
- AirPAY Mobile POS
- Rugtek POS Printer
- Posiflex Jiva
- NGX Billing Machine
- Android POS Device- by Nukkad Shops
- Mswipe Wisepad
- WeP Billing Printer
- Snapbizz Turbo
- Rugtek Cash Drawer
- NGX Bluetooth Thermal Printer
Types of POS Machines for Retail
There are several types of POS systems and POS devices. The POS system and device that is best suited for a business are procured as per the features and functionality it offers. The key features that determine the choice of the POS system include:
- Compatibility of POS system with 3rd party software and hardware
- Integration with existing business systems
- Ease of usage
- Functionality range
- Implementation and training services
- Ability to track real-time sales data
- Competitive Pricing
- Customer Support services
The most common POS systems for retail are:
a) Mobile POS system
b) Terminal POS systems
c) Self-service Kiosk POS
d) Online POS systems
e) Multichannel POS systems
Benefits of Different POS Systems to Small Businesses
A ‘Point of Sale’ machine or terminal is an important requirement of all businesses that are into the sale of products - be it online or offline. They help conduct sale transactions efficiently. The Latest POS systems are much more than Card Readers, as they help integrate and streamline other business operations, providing useful data for managing inventory, and sales personnel, amongst others.
Some of the important benefits, especially to small businesses, along with POS examples, are:
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Saves Time and Improves Efficiency:
A traditional cash register involves manual input of data, with the possibility of a wrong entry and subsequent correction leading to wastage of time for the business and the customer. POS machine-based system brings in a high degree of efficiency by using barcode readers, card readers, and receipt printers which involve minimal data entry and, therefore, almost nil chances of mistakes. Fast processing at billing counters leads to a better customer experience and reduced drudgery for manual counters. This directly impacts faster customer turnover at the counters and higher sales revenue for the company.
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Improved Accuracy of Data Entry and Storing:
With manual data entry eliminated, the chances of error are drastically reduced.
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Provides Non-Cash Payment Options:
Due to the acceptance of credit and debit cards for payments, the need for cash payments is drastically reduced and eliminated.
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Automates Repetitive Tasks:
Repetitive tasks like accepting payment or inventory management are now automated, helping to make operations efficient.
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Better Inventory Management:
Modern POS terminals come with inventory management features. This enables all fresh stock to be scanned upon delivery and updated in real-time to a digital database. Sales counters and channels can, therefore, accept orders against specific availability while the companies can make judicious purchase decisions. Small businesses can use this feature to implement a “Just in Time” Inventory policy, helping them avoid the costly consequences of overstocking and understocking.
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Streamlined Sales Management From Multi Locations and Multi-Channels:
POS systems enable businesses to expand and conduct business from multiple and remote locations, including online channels while ensuring operations are streamlined, and customer experience is good. Mobile POS systems help small businesses expand and conduct operations, including remote locations and sales at fairs and promotional events.
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Real-Time Sales Data Tracking:
POS helps streamline and simplify sales data management. The POS system offers real-time sales data from multiple locations and multi-sales channels, which enables tracking and managing sales performance and metrics anytime. This helps in taking quick corrective measures when required.
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Helps in Enhanced Employee Management System:
POS systems help monitor sales by individual employees and teams, enabling employers/management to monitor the performance of sales teams and reward accordingly. Employees can also track their sales performance and progress towards targets and objectives. POS system is, therefore, a powerful tool to track and improve sales performance and provide a better customer experience.
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Manage Taxes and Compliances:
Modern POS systems for retailers help compute specified taxes automatically, resulting in transparent billing and tax compliance. It, therefore, helps minimize taxation errors and save time.
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Conclusion
The era of digital payments has truly arrived and is here to stay. Changing mindsets of people and businesses, apparent convenience to all stakeholders, and conducive government policies have all meant that the POS machine systems would only find growing acceptance and adoption by businesses-small and big.
Changing technology has led to the POS system going beyond just a “Point of Sale” device to a system that offers integration with other business operations. Therefore POS system provides businesses with a powerful tool to monitor and improve sales performance, do inventory management, do real-time analysis of sales data, improved employee management, and grow the business.
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