Which Pos Terminal Type Is Best For Your Business

As a business owner, one of your many priorities is sure to deliver an excellent customer experience. To that end, it’s worth noting that aside from your products and services, a smooth and efficient checkout is also a meaningful part of the customer journey. 

Choosing the right point-of-sale (POS) system for your business is one of several touchpoints to create the customer experience outcomes that matter most to your business, so it’s important to carefully consider this choice. This article discusses everything you to know to choose the best POS terminal for your business. 


  • Choosing a modern, convenient, and secure POS that is right-sized for your business is an important choice. Options for POS terminals include on-site, self-service, cloud computing, and mobile devices.
  • When choosing your POS setup, there are some options better suited to certain kinds of businesses. Carefully weigh your options and evaluate which is best for your business and customer needs.
  • The biggest decision your business needs to make is choosing your payment processing provider. Your payment processor may supply the POS hardware and software and handles the heavy lifting of transaction processing—so choosing the right partner is key for cost and service.

What is a Point-of-Sale Terminal?

A point-of-sale system is most simply explained as a software and hardware combination that allows businesses to process debit and credit card transactions, contactless payments, and mobile wallets such as Apple Pay or Android Pay. 

The actual payment terminal for a POS system is the hardware. The accompanying POS software allows businesses to conduct eCommerce transactions and is also often equipped with functions such as analytics, inventory management, and integrations to other business tools. 

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4 Types of POS Systems

Choosing a modern, convenient and secure point of sale that is right-sized for your business is an important choice. Depending on your business model, some options may be a non-starter, but it’s important to understand the various POS hardware and software options available.

On-site POS terminal

An on-site POS terminal consists of the tablet or computer and card reader needed to process payments. A modern POS terminal will have a touchscreen where the transaction is built, and a payment terminal to accept credit and debit card transactions and other forms of payment, such as NFC-enabled cards and mobile wallets. An on-site POS terminal is often connected to a cash drawer and receipt printer and located in a static location in the store or restaurant. These work well in high-volume sales environments such as mid to large-size retailers and restaurants. 

  • Benefits of on-site POS terminals include having a modern system that quickly and securely processes payments. Most customers are accustomed to making debit and credit card payments at a POS terminal, meaning the level of comfort is already established, which can be a barrier for some of the other point-of-sale options such as self-service kiosks or mobile POS devices. 
  • The downsides of on-site POS terminals are rather limited as these are a mainstay of retail, service, and restaurant industries. That said, on-site POS terminals require allocating space for all the necessary components and the mostly immovable nature of on-site terminals could be considered a downside.

Self-service POS terminal

This POS system is a self-service kiosk unit where customers can scan and pay for their merchandise without the assistance of a cashier or salesperson. These include a barcode scanner, card reader, and touchscreen user interface. Most frequently, self-service POS terminals are found in grocery stores, convenience stores, and fast food restaurants.

  • Benefits of a self-service POS terminal include a quick and efficient checkout experience and reduced staffing needs. These are ideal for high-volume, low-touch shopping experiences and can lead to cost savings and a speedier customer checkout.
  • The downsides of self-service POS systems include security issues from having largely unattended checkouts, which could result in increased theft or scanning errors that contribute to inventory management and inaccuracy issues. Self-service POS terminals also experience increased wear and tear, can be more expensive to maintain, and take up a larger footprint in the store.

Cloud computing POS terminals

Cloud computing POS terminals are a widely used solution for retailers. With this type of POS terminal, the data and card processing software is hosted on the POS system’s server, meaning the business doesn’t need to host an on-site server for data storage. 

  • The benefits of cloud computing POS terminals include offsite data storage, meaning there is no need to house expensive servers or risk physical damage. Further, this is an ideal solution for retailers with multiple locations because the transaction information can easily be consolidated. Cloud technology is advanced and secure, which should give business owners peace of mind that their data is managed by a trusted partner.
  • The downsides of cloud computing POS terminals are primarily cost, and the risk of cyber attacks that could compromise customer and company data. However, with proper cybersecurity measures and practices in place, this risk is minimized. One other factor that could potentially be considered a downside is the need for internet access for the cloud-based POS system to work. While internet access is ubiquitous in today’s world to run a business, internet outages can limit the ability to do business during that time.

Mobile POS terminals (mPOS)

Mobile POS devices are run on smartphones or tablets through a WiFi connection and enable the user to process transactions outside of the typical cash register area. 

There are several mobile payment systems, including specialized handheld devices that work on an internet connection, include a barcode scanner, and can accept EMV chip cards, swiped magnetic stripe cards, and contactless payments. One popular example Stax offers that fits this bill is the Clover Flex. Another popular option for mPOS is using an existing smartphone or tablet with a plug-in card reader paired with a payment processing application. 

Mobile POS systems are gaining popularity in restaurants, allowing servers to more efficiently close out tabs without needing to take the customer’s card away to a POS terminal to process the transaction. With these terminals, businesses are able to serve their customers by bringing credit card readers to them—increasing cardholder security since their card is never out of sight.

  • The benefits of mPOS include the ability to process transactions where the customer is, making the point of sale speedier in busy retail or restaurant environments. Mobile POS terminals are fairly simple to implement and user-friendly. An mPOS system tends to work well for small businesses, restaurants, and even large retailers that process a large number of transactions.
  • Some downsides of mPOS terminals include the need to set up areas for checkout so the cashier can access items like bags, sensor removers, a cash drawer, and a receipt printer. There is also a potential risk of device theft for some mPOS systems since they are lightweight and easily concealed. In a retail environment, using a mobile device to process large transactions with many items can be cumbersome, so depending on the purchasing patterns in your business, mPOS could prove to be an inefficient checkout method.

Point of Sale FAQs: Q&As on POS terminal types

Whether you’re a restaurant, retail business, or service provider, the point-of-sale experience is an important part of the customer journey. Here, we’ll answer a few of the most commonly frequently asked POS questions.

What is the difference between a terminal type and a transaction type?

The terminal type refers to the POS hardware, all of which are listed above. The transaction type refers to the method of payment, including cash, check, EMV, or swipe credit cards, contactless cards, debit cards with PIN, gift cards, and mobile wallets. It is worth noting that depending on the transaction type or card brand, there will be varying processing fees. For example, a Visa debit card will have a lower fee than an American Express reward card. 

For more information on the various processing fees associated with card processing, check out this blog post.

How to choose the best POS terminal?

Choosing the best POS terminal for your business starts with choosing your payment processor. Payment processing service providers will have a variety of equipment to choose from, and the specs will be listed for you to evaluate the options. When considering what type of terminal (or terminals) to choose, it is important to consider customer demographics, traffic patterns, average sales volume, and industry trends for payments, just to name a few. Carefully review the specs of the terminal options your payment processor provides and consult with your provider to decide what options would suit your best. 

How does a POS system work?

A POS system works in conjunction with your payment processing provider to complete transactions and store the related data, either with an on-site server or (more commonly) a cloud-based server. Since most businesses rely on card transactions, it’s also important to understand the ins and outs of payment processing. For more in-depth information on credit card processing, check out this blog.

Ready to learn about how Stax can support all of your point-of-sale needs, including best-in-class POS terminals and award-winning customer support? 

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