Also called: POS, POS system, point-of-sale system, point-of-sale payments, in-person payments, POS provider, POS solutions provider
What a point of sale (POS) is
A POS is the equipment and software you use to complete a sale. The equipment might include a register, touchscreen, barcode scanner, receipt printer, cash drawer, or payment terminal. The software records items or services, calculates taxes and discounts, and keeps transaction records.
A POS system is more than the spot where a customer pays. A restaurant might use it to enter an order and tips, while a retail store scans products and updates inventory. Some systems also connect in-person sales with online orders, accounting, or customer loyalty records.
Your POS bill and your card-processing bill pay for different things. Compare them separately.
How a POS handles a sale
You add products or services by scanning a barcode, selecting them on a screen, or entering them manually. The POS calculates the amount due, including applicable tax and discounts. For a card payment, the terminal sends the transaction for authorization through your payment setup. An approval lets the sale proceed; the POS records it and produces a paper or electronic receipt.
After the transaction, connected software can update inventory and sales reports. That gives you a record to compare with your till, orders, and deposits. If the internet connection drops, some systems offer offline processing, but stored transactions are not approved at the time of sale. That creates a risk of declined payments or lost sales when service returns.
What a POS means for your costs
Separate the cost of the POS equipment and software from your card-processing bill. A March 2026 cost estimate lists subscription software at $60 to $200 per terminal each month and standard terminals at $300 to $2,000. These are buying-cost estimates, not card fees, and add-ons, installation, or support can add to the bill.
Your card-processing charge has three layers: interchange paid to the cardholder’s bank, network fees, and processor markup. Only the markup is negotiable. As of 2026, Visa’s assessment is 0.14% on credit sales; that network fee is not a charge for POS software or hardware. Look at your processing statement separately from your POS subscription or equipment invoice.
What to check before choosing a system
Check that the terminal, software, and payment setup work together before you buy. A system that cannot connect to your accounting or inventory tools leaves you re-entering sales and increases the chance of mismatched records. Confirm which features require paid add-ons, such as extra registers, loyalty tools, or customer-facing displays.
Ask what happens during an outage, how offline transactions are stored, and when they are sent for authorization. Confirm who handles updates and support, and whether your setup meets PCI DSS requirements. A POS that stores or transmits card data affects your security responsibilities, even when another company supplies the equipment.
What you can actually change
- Separate the bills. Compare POS equipment, software, and add-on charges with your card-processing statement. Do not treat a terminal purchase as a processing fee.
- Check the markup. On your processing statement, separate interchange and network fees from the processor’s markup. The markup is the negotiable part.
- Test the workflow. Before signing, test a sale, refund, receipt, inventory update, and outage procedure. Confirm the system supports your payment methods and required business integrations.
Frequently asked questions
Is a POS system the same as a card terminal?
No. A card terminal captures payment details, while a POS system includes the software and connected equipment used to ring up and record a sale. A POS setup may include a terminal, register, scanner, and receipt printer.
Does a POS system set my credit card processing rate?
The POS itself is separate from the three processing-cost layers: interchange, network fees, and processor markup. Only the processor markup is negotiable. Review your processing statement to identify those charges.
Do POS systems work without internet?
Some systems offer offline processing, which stores transaction data for submission when the connection returns. An offline transaction is not approved at the time of sale, so a later decline can leave you without payment.
What should I compare when buying a POS system?
Compare the upfront equipment cost, monthly software charges, paid add-ons, support, and integration requirements. Also test how the system handles outages and confirm your setup meets PCI DSS requirements.