Why POS with Payment Processing?
The top performers in our review are Square, the Gold Award winner; Shopify, the Silver Award winner; and iPayment, the Bronze Award winner. Here’s more on choosing a system to meet your needs, along with detail on how we arrived at our ranking of POS systems.
What Do These POS Systems Provide?
The POS systems we reviewed provide the ability to process and track sales. Some process sales using iPad apps and others come with complete POS hardware systems along with POS software. All provide at least basic inventory, sales and customer management features. They also offer compatible peripherals such as stands, receipt printers, barcode readers and cash drawers if needed. Some perform more advanced functions such as integrating with your online store, processing mobile phone payments and communicating with your customers.
The point-of-sale systems in our comparison include those that provide credit card processing along with its POS solution. Some require you to sign up with their processor, others will allow you to use the processor of your choice. If you're looking for a solution that is more specific to your industry, you may want to consider our Retail POS or iPad Restaurant reviews. We also have reviewed Android point-of-sale solutions. If you are not sure what point-of-sale features you require or what type of system might work best for you, you can learn more from visiting our articles about POS Systems.
How We Compared POS Systems
We compared the monetary and time investment required of the POS systems. Many new businesses do not have a lot of startup capital, so we tried to determine which services can give you the most value for a small upfront investment.
The services that can get you going almost instantly with a card reader, a processing agreement and no long-term commitment have the lowest initial costs. Those that provide you with hardware and a processing agreement often require a long-term contract if you do not buy the hardware outright. Some provide low-cost hardware you can buy upfront and add your own processor, which is not a bad option for certain businesses.
Is Bundling With Credit Card Processing a Good Idea?
Like most complex decisions, the answer is – it depends. It may depend on your credit rating, sales volume and active contractual agreements. Ideally, you have good credit, a steady flow of revenue, startup funds and freedom to rate shop. However, that may not be your situation. If you are starting up a new company and don't have a lot of startup money, POS systems bundled with a processor may help you get going with little upfront investment.
Ideal situation: good credit, steady revenue, cash reserves
If your business is already generating steady profits, you can still benefit from a bundled solution. While you would still receive the same hardware and software options as everyone else, your advantage is that you can shop around for the best rates. Credit card processing rates can vary greatly and add up quickly. The better your financial situation is, the more bargaining leverage you have. Bindo, Clover Station, Gotmerchant and others will allow you to negotiate credit card processing rates. The other advantage is you can buy your hardware upfront rather than having to lease it or finance it, which will cost you more in the long run.
Common situation: marginal credit, new business, little startup money
Not everyone starts a business on optimal terms. That is why services that offer POS software or hardware in exchange for a processing agreement are attractive. While some may require a long-term contract, the startup costs are minimal. You could start processing sales using Square, Shopify, iPayment or PayPal with just an iPad and a credit card reader. Other services such as Touch Suite, Gotmerchant and Harbor Touch provide POS hardware and software in exchange for a processing agreement.
Other Features to Consider
New POS systems include more than just the ability to process sales. Other features that modern POS systems offer – such as employee time-worked tracking, customer management features, social media tools and online store integrations – can help you run your business more smoothly.
Employee Management Tools
If you have employees to manage you may save time by integrating POS employee management features with your accounting or payroll solutions. Many point-of-sale systems include tools for managing employee profiles that can control access and permission levels as well as schedules and time worked. The time trackers can be used to help you process payroll. Some even include messaging systems so you can send your team a message online directly to the POS system so they can see important information immediately at the workstation. Shopify, Clover Station and Bindo offer employee management features.
Customer Management Features
Since managing customers is closely tied to sales, all modern POS systems will include some customer management tools. At the minimum, they will track customer contact information and sales, with associated reporting. You can use customer contact information and sales data to create customized customer outreach emails or social media campaigns.
Social Media Features
Twitter, Facebook and other social media sites offer a free way of increasing your online presence. Many POS systems can collect customer email addresses and social media contact information so you can reach out to your customers with new products, sales and other information easily. Some will even directly post to Twitter or Facebook for you.
Online Store Integrations
Retail and restaurant businesses may benefit from allowing customers to place orders online. The most well known is likely Shopify, which can integrate with its own online store. POS systems with this type of integration can track inventory between the physical and online stores. Restaurant versions can support menus and speed up the take-out order or delivery process.
Our Verdict and Recommendations
Square, our top choice, only requires a minimal upfront investment and will approve nearly anyone regardless of credit history or sales volume, making it an especially good fit for those who are just starting out or looking for a low-cost upgrade. Our Silver Award winner, Shopify, is a good option if you are looking to easily add a companion online purchase option to your retail store. If you are primarily concerned about your bottom line, the Bronze Award-winning iPayment is a good option as it strives to provide the lowest swipe fees. However, keep in mind that your swipe fee rate may vary depending on your financial circumstances, so be open to negotiation. Another POS system to make note of is Clover Station. This POS unit is available via numerous banks – maybe even your own bank – so you might have the ability to negotiation rate fees, and the terminal itself is simple to use and durable.
Contracting with the right POS service makes a big difference to your bottom line. We recommend that you contact three to four POS companies to help find the best fit for your business. If you only process a few sales per month or are a short-term or seasonal business, intense scrutiny may not help you much. But if you are looking at a long-term contract, you'll want to do your research. Those looking for options with the lowest upfront costs will find our side-by-side comparison a good place to start comparing rates. If you have an iPad, you can start processing right away with Square, Shopify or iPayment.