Point of sale systems have been around for decades, with cutting-edge sales technology making old-school cash registers obsolete. But from those original PoS systems in the 90s to the cloud-based software of today, lots of people are still a little hazy on what exactly PoS stands for.
Turns out, PoS is used in several contexts with different implications. Let’s take a look at 4 examples of PoS usage and what it actually means for you, personally and as a business owner.
What is a POS?
PoS stands for Point of Sale, and refers to any place where a transaction might occur. You might have also seen the term ‘point of purchase,’ and it means the exact same thing.
Using that broad definition, a PoS can be as big as a water park or a movie theater. But generally when we talk about ‘point of sale’ we’re talking about the area immediately surrounding a cashier or payment counter—the precise location where money is exchanged at your business.
What is a POS System?
PoS systems are any system of hardware and software engineered to help businesses with all the data relevant to your point of sale—that means inventory management, data analytics, employee management, sales tracking, and anything else you could dream of.
Businesses as diverse as amusement parks and burger joints use PoS systems to help manage the hordes of data that accompany their daily sales activity. Your setup may vary, but a basic point of sale system might include a computer to run the actual software, a scanner, printer, card reader, and server.
However, it’s cumbersome, expensive and sometimes frustrating to run your own on-site server, which is why many businesses have made the switch to cloud-based PoS systems. Cloud-based systems can run from any device with an internet connection and don’t rely on vulnerable on-site servers to keep your data safe and easily available since all of your information is kept and backed up securely online.
What is a POS purchase or POS transaction?
A point of sale purchase is the exact moment when a payment is tendered or transaction finalized in exchange for your goods and services, whether that’s a piping hot cheeseburger or a weekend park pass. The form of payment doesn’t matter—cash, cards, PayPal and Bitcoin can all be used in a PoS transaction.
For a PoS transaction to ‘count,’ it must be finalized with some form of verification, such as a signature, PIN, or even a fingerprint scan. Once the verification information reaches the buyer’s issuing bank or other financial account, the transaction can be denied or accepted, depending on the type of transaction and how much money is in the buyer’s payment account—assuming, of course, that the PIN or other security check was successful.
What does POS mean on a bank statement?
If you take a look at your bank statement, PoS is one of the myriad descriptions used to categorize your transactions. PoS should only show up next to transactions where your debit card was used—not credit.
You’ve probably guessed that if you see the ‘PoS’ label pop up on your bank statement but don’t use (or own) a debit card, that should be a red flag. Get in touch with your bank ASAP to make sure you aren’t a victim of fraud.
Point of Sale, Clarified
While point of sale carries slightly different meanings depending on the context, by now you should have a good handle on what PoS means both for your business and personal finance.
From museums to restaurants to family fun centers, a huge number of businesses across the US rely on PoS to make a profit, which means relying on PoS systems, too.
Keeping your company streamlined and efficient means running a cloud-based PoS system that’s as affordable as it is powerful—otherwise, you’re spending more time managing your management tools than you are managing your business.