The POS system refers to the combination of hardware and software required to accept and process different forms of digital payments. The hardware includes a card acceptance machine, and the software handles the remaining payment methods, processing and other peripheral value-added services.
POS terminals have gradually become the core of business operations, especially for retailers. The first POS terminal ever launched is only used to accept card payments. Over time, POS devices have been further enhanced to allow for other contactless payment modes, such as mobile wallets. Today, technological advancements have given us ePOS, a payment acceptance software that runs on smartphones that can be used to accept a limited number of digital payments without a physical credit card machine.
Today, modern POS systems come in various shapes and sizes, and can accept all forms of payment, including:
The data required for the transaction is transmitted in encrypted form through radio waves, and the connection is established to make the transaction fast and safe. This eliminates the need to swipe or insert the card or even hand the card to the merchant.
POS terminals come in various shapes and sizes, and can provide all types of businesses with the ability to accept payments. POS devices range from small, stylish and simple card acceptance devices to a full range of Android smart POS. Each digital POS system has some specific functions that companies can use according to their use cases. These include:
The GPRS POS terminal is one of the oldest POS versions. Initially, it was a wired device that worked by connecting to a standard telephone line. Today, it uses a GPRS SIM card for data connection.
GPRS POS is bulky and cannot provide any freedom of movement. Therefore, there is a need for a stylish and convenient wireless POS device that can be carried with you.
As customer experience pressure increases, so does the demand for a seamless and perfect payment experience, which is why Android POS came into being.
Payment service providers are trying to find innovative low-cost solutions for brick-and-mortar retailers to allow payments to be accepted without equipment costs. In this direction, POS devices are further evolving into ePOS (electronic POS).
As the demand for the ePOS market segment continues to grow, technologies such as Pin on Glass, Pin on COTS (consumer off-the-shelf devices) and Tap on Phone will further revolutionize the payment industry.
In order to further expand the functionality of the POS system, payment providers provide additional peripheral solutions as services. These can transform simple POS terminals into complete payment solutions. These are designed to improve business efficiency and serve as an important tool for more than just accepting payments. These include:
Let’s take a look at some of the key advantages of digital POS solutions that directly help businesses and government organizations.
Providing consumers with their choice of payment methods and the ability to accept payments anytime, anywhere can help merchants improve the overall customer experience.
Automated processes and interconnected systems can significantly reduce the hassle in the payment process.
By bypassing the checkout queue and fast-track transactions, you can provide customers with an excellent experience. For example, for customers who only purchase one or two items, self-checkout options can be provided.
Under the current circumstances, every company needs to gain an advantage in the competition to maintain growth. The point-of-sale experience can make or break sales.
The digital POS with a technically supported payment platform has integrated payment acceptance and value-added services, allowing merchants to focus on their core business, thereby eliminating the hassle of cross-touch point payments and related experiences.
A powerful POS tailored to your business needs will only help your business grow by providing you with the tools you need to expand your business.
The new era POS solution comes with integration options. The equipment or solution is integrated with the existing back-end systems: ERP, billing and other systems into an interconnected system.
Instead of running the decomposition process of different systems on multiple payment methods, it accepts all types of payments through a single solution and connects to a single server at the back end.
This is done across all touch points, which means that a fast checkout process can be achieved while providing a seamless payment experience.
The manual process of capturing payments is inefficient and offers limited options. This can cause delays in payment processing and reconciliation.
Digital POS systems can help simplify operations through end-to-end payment processing and automatic daily settlement, reconciliation and reporting, and automatic reporting.
This improves overall efficiency by eliminating manual errors and reducing total payment processing time.
With the introduction of new technologies in the payment field, current customers have many payment options. Customers’ payment preferences have largely shifted from cash to digital payment methods, such as mobile wallets, and now contactless payment methods, such as UPI, QR, etc.
To help merchants meet changing customer expectations, digital POS systems provide the convenience of accepting multiple payment methods.
Digital POS solutions are the answer to simplify some key business processes related to payment and customer satisfaction. However, when choosing the right option, you must keep some of these key elements in mind:
There are many types of digital POS devices on the market, and you should choose the right one according to your specific payment needs.
For example, for companies that accept payments at the door of their customers, light-weight devices are preferred. The device should be small enough so that delivery personnel can easily carry it with them and be able to use mobile data. Similarly, smart Android machines are great for the in-store queue cancellation experience, because you can accept payments anywhere.
When choosing a digital POS machine, you must ensure that it is upgraded with the latest technology and accepts all forms of payment-debit and credit cards-magnetic stripe cards, chip cards, UPI, QR codes, etc.
The customer’s data is very important, and ensuring its security is equally important. Therefore, you must ensure that the digital POS system has a strong encryption function for transaction data, and the device should comply with PCI-DSS (Payment Card Industry Data Security Standard) and EMV standards.
Connectivity is another key factor that must be considered to ensure a superior customer experience.
Digital POS devices with multiple connection options via Bluetooth, Wi-Fi or 4G/3G can make payment very easy and fast. The device should be able to operate seamlessly in your specific environment.
Traditionally, after the transaction is completed, only paper receipts can be printed for customers. In addition to the environmental impact, this makes record keeping a serious expense. When choosing the right POS machine, you can choose a safe and easy-to-maintain digital receipt function.
Since the beginning of the Covid-19 pandemic, there has been a greater demand for digital receipts because people have begun to maintain social distancing and avoid direct contact as much as possible.
Before choosing a digital POS machine, you must ensure that it accepts a variety of cards. It will be futile to purchase a POS machine that restricts you to only accepting a few bank and online payments.
In order to provide customers with the best payment experience, POS machines must process all bank cards or network cards (such as Mastercard, Visa, American Express and RuPay cards) payments.
Providing customers with simplified affordability solutions is essential for companies with high-priced goods.
In today’s era, POS devices are equipped with a monthly installment (EMI) solution that allows any transaction to be converted into instant EMI through banks, brand discounts, and non-bank financial company (NBFC) programs. In this way, the purchasing power of customers can be increased.
Modern digital POS terminals are more intelligent and provide a tailored payment experience that can meet the needs of various organizations. The new era POS system can save valuable time and energy while minimizing errors. With additional ancillary services, the digital POS system becomes more powerful and allows easier access to data and insights, thereby helping your business grow as a whole.
Byas Nambisan is the CEO of Ezetap, a universal payment platform. In previous positions, Nambisan served as the financial director of Intel India, and held leadership positions at Intel in the United States. He holds an MBA from Tepper School of Business (Carnegie Mellon University) and a Master of Science in Mechanical Engineering from Marquette University.
Aman is the Deputy Editor-in-Chief of India for Forbes Advisors. He has more than ten years of experience working with media and publishing companies to help them build expert-led content and build editorial teams. At Forbes Advisor, he is determined to help readers sort out complex financial terms and do his part for Indian financial knowledge.
Post time: Sep-17-2021