For many modern businesses, making use of a Point of Sale (POS) system is an essential component that contributes to the optimization of sales. This includes aspects such as providing marketing insights based on the demand for products and the management of expenses, inventory, and staff. Many people use POS-related terms interchangeably, yet each one holds a different meaning. Terms such as POS transactions, POS systems, and POS terminal are often confused.
Point of Sale or POS refers to the place where a transaction takes place. The POS transaction involves a customer and a merchant along with a product or service that is being purchased through the POS system. This means that any monetary exchange processed through POS software is called a POS transaction. To perform the sales transaction, electronic equipment is required. This represents the POS terminal through which credit card payments are being processed. The POS system comprises of the software and hardware that goes into the creating the billing process. Such elements include display unit, device in which to enter the data about the products that are being purchased, barcode scanner, receipt printer, cash register, and software interface.
PaymentGenes partners with payment and FinTech companies around the world to create an environment where professionals and businesses are empowered to advance the ever-evolving payments industry. Curious about how we can help your business grow? Get in touch here
It was back in the 1970s when the first POS system was introduced by IBM. The terminals used back in the day were wired to a mainframe “controller”, which processed everything. This meant that the terminal itself possessed no processing power. In the last decade, three main payment methods have existed in terms of in-store POS systems – cash, card and APM (alternative payment method). If you want to read more about APMs, you can read our blog here.
MPOS or Mobile Point of Sale consists of transactions processed via mobile wallets, which are mostly smartphone applications. The most famous providers of these services include ApplePay, Google Wallet, and Samsung Pay. In the case of MPOS, the payment happens through a contactless interaction of the smartphone app and the payment terminal. The payments data could be transferred through scanning a QR code, or via a wireless standard NFC (Near Field Communication). The customer could use a digitally stored credit or debit card (Host Card Emulation) or a mobile wallet application.
Understanding how the POS system and all its components work is essential, as it is usually referred to as the heart of the business. It is implemented in variety of core tasks such as inventory, staff and customer management, price adjustments, labour reporting and much more. POS systems assist businesses in gaining insights into the products and services they offer, measuring progress and maintaining digital records of almost all aspects of their businesses. If you’d like to learn more about the payments industry, then read our blog: Key Insights Into Alternative Payment Methods. Alternatively, you can schedule a call with PaymentGenes Consultancy to see how we are able to assist you and your business with your payments strategy development.
PSD2 and Open Banking are transforming the industry. They require the implementation of strong customer authentication (SCA) for online financial activities. Its purpose, along with many other things, is to reduce the risk of fraud and to increase security through additional authentication factors.