What is POS?

Point of Sale (POS) is where a customer pays for goods or services purchased. It combines various hardware and software needed to accept and process different forms of digital payments. 

The main objective of POS software is to monitor and record all business deals between a buyer and a seller. The most recent point of sale software goes beyond debit or credit card processing, intending to help retailers assimilate contact-free payment options, e-commerce amalgamation capabilities, and many more.

This article provides complete information about POS system and how it works. 

How Does a POS System Work for a Small Business? 

POS makes transactions more convenient by allowing businesses to calculate the price, accept payments from customers and keep track of sales. Whether you sell online, have a physical store, or both, you can take the help of POS for payment. 

Nowadays, POS systems are entirely digital, and all you need to have is a POS app and a device like a tablet or a phone, and an internet connection. Here is how a  POS system works?

1. In the case of a physical store, the customer visits your store and selects a few items to purchase. Next, the store associate uses a barcode scanner to detect the price of all the items. Some POS systems have a camera that allows you to scan the items. 

In the case of an online store, a customer visits your website, adds the items to the shopping cart and clicks on the checkout button.

2. The POS system calculates the price, including CGST and SGST. Meanwhile, it also updates the inventory count for the items sold.

3. After generating the bill, the customer uses debit or credit cards, gift cards, cash, or other payment options to make the payment. 

4. Once the customer makes the payment, your sale is successful and the POS generates a digital or printed receipt. That’s all! Next, you ship the items purchased or hand them over to your customer. 

Types of POS

Listed below are various types of POS devices available to solve the payment needs of businesses. 


Businesses previously used PSTN POS by connecting it to public switched telephone networks, also known as standard telephone lines. It was bulky and, being a wired device, lacked mobility. Even today, many businesses use them as they are pretty affordable. 

Later it was modified into GPRS POS, a wireless device with GPRS SIM card slots for data connectivity. The devices allow you to securely accept payments through debit and credit cards from any location. 


Mobile POS or mPOS was introduced to solve the problem of having a handy device that could accept digital payments from anywhere. Though GPRS POS was a wireless device, it was still inconvenient to carry as it was hefty.

On the other hand, mPos is a handy, easy-to-use wireless device that can be connected to smartphones through mobile apps. It provides multiple connectivity options to the businesses, such as GPRS, 3G, Wi-Fi, Bluetooth, USB and NFC cards. It is most suitable for merchants who offer cash on delivery (CoD) options or are involved in delivery services. 

Android POS 

Over time, Google launched Android, a mobile operating system designed for touchscreen devices, such as smartphones and tablets. It arose the need for a touch-based payment experience, which was how Android POS came into existence. 

An Android POS terminal is a wireless and portable device that runs on an Android operating system. The device minimises the need of having separate devices for different purposes as it has an integrated barcode scanner, receipt printer, and card swipe. Also, it supports various internet connectivity like 3G, 4G and Wi-Fi.

ePOS (Virtual POS)

POS was further evolved into electronic POS to eliminate the additional device costs. An ePOS allows a smartphone to be transformed into a POS device through an app that enables the merchant to accept various business payments, such as debit cards, credit cards, UPI, mobile wallets, and SMS pay. 

With the increasing demand for the ePOS segment, technologies like Pin on Glass, Pin on Consumer-Off-The-Shelf (COTS) Devices and Tap on Phone have entered the field to transform the payment industry further.

Benefits of Digital POS Solutions

Digital POS solutions provide certain benefits that directly help businesses and government organisations.

Boost Consumer Experience

Digital POS helps merchants enhance the customers’ overall payment experience by providing a hassle-free transaction process. It also offers a quick self-checkout option for buyers buying fewer products. 

Multi-Store Management

Some POS systems allow you to manage several stores within the same software. It is beneficial for businesses with multiple stores within a city or a country, or across the globe. With this facility, the overhead cost of installing separate software for each store gets reduced. 

Outstanding Inventory Management

A cloud-based POS makes it easy for businesses to track their inventories. It helps the brands to identify the first-selling products, less selling products, capital needed to stock up products and many more. 

Flexible Payment Options

POS systems come with an option to integrate different payment options connected to a single server. It offers the customer many payment choices from debit and credit cards to digital modes of payments like mobile wallets, UPI, QR etc. 

The above-detailed discussion might have provided you with a much better understanding of POS systems. It’s for sure that now you’re ready to find the right one for your business, no matter what or where you sell.

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