How Much Does A POS System Cost?

A point of sale system is a major investment for any retail or restaurant business, and not one you should undertake lightly. Your POS is what allows you to take payments, and any issues with your point of sale can potentially impact your bottom line. An unreliable POS system might not let you accept payments during outages; a POS that charges exorbitantly high payment processing fees can cut into your profits as well.

POS pricing can vary widely. Some products may require purchasing costly hardware up front, while some may look like a bargain but lack necessary functions like advanced customer service or a loyalty program (which then must be purchased as add-ons).

These days, in addition to performing the essential function of accepting payments, POS systems can do a lot to keep your business smoothly running. Indeed, many modern point of sale systems are also full-fledged business management systems that have the ability to track inventories, log employee hours, manage customer relationships, and much more. 

Our Top Picks for Point of Sale Software 

There are many POS systems out there, ranging from basic to advanced, cloud-based to onsite, Apple to Android. And of course, there is a wide range of prices for these systems as well. In this article, I’ll try to give you a good idea of how much a retail and/or restaurant POS system costs.

POS Hardware Costs

Hardware is actually not the largest component of a POS system’s long-term cost. However, it can seem like a major expenditure when you’re first getting started. To determine the actual magnitude of this expenditure, you’ll need to figure out what POS hardware you really need — you may be able to get by with a few basic pieces like a tablet, cash drawer, credit card scanner, and receipt printer. Or, you may require a barcode scanner, a kitchen printer, scales, extra tablets for servers to take orders digitally (in a restaurant scenario, obviously), or even self-serve checkout kiosks.

Fortunately, today’s lightweight, cloud-based POS systems come with significantly lower hardware costs than the clunky, on-premise systems of yore. Most modern systems use a slim touchscreen “register” — typically an iPad or Android tablet — and operate on a software as a service (SaaS) model. No huge Microsoft machines; no expensive Windows software licenses. 

While the older legacy (on-premise) POS systems in use 15-20 years ago could easily set you back $5,000-$7,000 just for the hardware, with a modern cloud POS, you should be able to get a complete, single-register hardware setup for somewhere around $1,000 to $1,500. The standard hardware setup typically includes a credit card reader, iPad or Android tablet, iPad/tablet stand, cash drawer, and receipt printer.

Often, you can buy hardware bundles for your POS directly from the vendor. These bundles don’t always include the iPad itself, in which case you can purchase the device separately. Unless you’re using a proprietary system, you might be able to save money by sourcing the hardware yourself, or you can use the hardware you already have.

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Here are some examples of hardware bundles you can purchase from various POS providers or their partner vendors:

• Square iPad Air 2 bundle — $1,033 (including iPad)
• Clover Station bundle — $1,699 (complete system with barcode scanner)
• Shopify iPad Air/Pro/Mini bundle — $749 (not including iPad which can add another $400 or so)
• ShopKeep iPad Air bundle — $829 (not including iPad)

In addition to a bundle providing the basics, you may also need to purchase a router, networking cables, and in some cases a local server (Mac or PC). A barcode scanner, debit pin pad, and receipt printer may or may not come with your hardware bundle.

Your type of business will dictate how much you can expect to spend as well. A retail store will often require different kinds of hardware than restaurant POS systems. Optional kitchen printers, weight scales, and additional tablets can potentially push your total initial hardware cost to up to $3,000 or so for a 1-2 register setup. Of course, the more registers/terminals you have, the more expensive your system will be. Most companies do offer additional registers at a discounted price, however. Generally, Apple hardware is more expensive than Android hardware, and proprietary systems like Clover require even pricier hardware.

Some POS providers (like Lightspeed) give you the option to lease POS hardware for a monthly charge, rather than buying the hardware upfront. To lease your POS hardware, you might expect to pay something like $100/month.

POS Software Costs

In the past ten years or so, most software businesses have moved into “the cloud,” and POS software is no exception. Software-as-a-service (SaaS) systems use a monthly subscription model rather than offering one-time upfront fees, but this is actually a good thing because there is a stronger emphasis on support. Not only does the monthly fee allow you to use the POS service, but it generally also includes access to support and frequent updates, both essential features for a well-oiled POS system.

In addition, cloud POS software fees almost always include remote data storage, which means you don’t need to house or maintain a local server for your POS.

POS software typically includes features like sales reports, inventory management, employee management, marketing features, CRM, and more. Most systems that are fairly robust can be purchased for around $50 a month on the low end to just over $100 on the higher end depending on what services you’re looking for.

The following are some examples of current monthly rates for single-location businesses from popular cloud POS systems:

Our Top Picks for Point of Sale Software 

Larger businesses with multiple terminals and/or multiple locations may pay several hundred dollars per month in software and support fees, but these businesses may also be able to negotiate custom rates based on their size, industry, monthly sales volume, etc.

POS Payment Processing Fees

Credit card processing fees aren’t technically a POS system cost, but since more POS providers are offering integrated merchant account services these days, I thought it would be worthwhile to touch on this expense too. In some cases, a POS will pair with a handful of merchant accounts from which you can choose, and in others, you must use the POS provider itself as your merchant account.

In cases where the POS provider is also the merchant account provider, sometimes the monthly service price you pay is commensurate with the rate you’ll pay for credit card processing. For example, with Shopify POS, you’ll pay 2.4% with the $79/month “Pro” plan, or 2.2% with the $179/month “Unlimited” plan. Square, on the other hand, has no monthly charge, but the credit card processing fee you’ll pay is 2.75% — which is kind of on the high side.

Sometimes you have the option to choose between your POS’s in-house processing solution or your existing merchant account. For example, you can get a Clover Station merchant account through Clover Connect, or opt for another merchant account provider like Bank of America. ShopKeep offers processing through ShopKeep Payments, or you can use the POS with a compatible outside merchant account of your choosing. However, with a system like Toast, you can only use Toast’s in-house payment processing.

The Best Credit Card Processing Companies for Small Businesses

Our Top Picks For Credit Card Processing

Of course, your total merchant account fees will depend on your sales volume; learn more about how much you should be paying in credit card fees. If you want even more information about negotiating rates, download our free beginner’s guide to payment processing or check out our cost analysis workbook for credit card processing.

Total Cost Of A POS System

To generalize a bit, single-register businesses can expect to pay about $1,250 for their initial investment, plus about another $1,000 per year to use the POS software (including updates and customer support, but not including credit card processing transaction fees).

If you’re still curious about the cost of a POS system, Toast has a pretty good article on legacy vs. cloud POS system costs. One of my colleagues here at Merchant Maverick has also written an excellent post on the benefits of a low-cost cloud POS system compared to traditional point of sale software.

Final Thoughts

So how much does a POS system cost? As you can see, the answers can vary, but hopefully, this has given you a ballpark idea of what you can expect to spend.

That leads to the next conundrum — which system should you buy? As I’ve made pretty clear in this post, there are quite a few systems to choose from.

If budget is a concern, you will probably want to minimize your POS system costs. It’s definitely possible to get away with paying less than $1,000 for your hardware and $50 or less for your monthly software fees, especially with a POS system like Square. But if you have a growing business and you want a system that will scale as you expand, the most cost-effective thing to do in the long term is to invest in a more expensive system that will grow with you.

In either case, you can count on us to help steer you in the right direction. Check out our POS software reviews for more info.

Our Top Picks for Point of Sale Software