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Learn how POS systems work, what they cost, and how the right one can make running your business easier.
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Before you choose a POS system for your business, it helps to understand what it actually does and how the right setup can make running your business easier.
In this guide, we’ll break down how POS systems work, what they cost, and the biggest benefits for your business. If you’re ready to compare options, we’ve also got a full roundup of the best POS systems for small businesses you can check out next.
Table of Contents
A point of sale (POS) system is the combination of hardware and software that a business uses to process sales and accept payments. In simple terms, it’s where a transaction happens.
Modern POS systems go beyond payment processing. They can also do things like:
Cloud-based POS systems are now the standard for small businesses. Many use lightweight hardware like an iPad or tablet paired with a card reader, while traditional setups might still include a full countertop station with a cash drawer, barcode scanner, and customer-facing display.
Even a smartphone with a Bluetooth card reader can qualify as a POS system, as long as it can securely process electronic payments. The best mobile POS systems can handle almost everything a traditional setup can — and sometimes more.
POS system costs vary depending on your setup and business size, but here’s what most small businesses can expect to pay:
| POS Cost Type | Typical Price Range | Notes |
|---|---|---|
| Hardware | $500 – $1,800 per terminal | Lower for tablet or mobile setups; higher for full countertop stations |
| Software | $0 – $300/month | Depends on features, number of registers, and plan tier |
| Payment Processing | 2.3% – 2.6% + $0.10 – $0.15 per transaction | Standard flat-rate pricing for in-person payments |
Costs can vary based on your industry, location, and number of registers, but these ranges cover what most small businesses will pay.
Many POS providers bundle payment processing with their software, meaning you’ll use their in-house payment system. While that makes setup easier, it’s worth comparing processing rates because even small differences can add up over time.
For more details about pricing, check out our guide to POS system costs.
A POS system does much more than process sales. It’s a central hub that helps you run your entire business more efficiently. Here’s what the right POS can do for you:
Together, these features help you save time, cut costs, and make smarter business decisions, all from one system.
For a deeper look, check out our guide to POS system benefits.
Getting started with a POS system is easier than it looks. Here’s how the process usually works, from setup to your first sale.
Most POS providers offer a guided setup when you first log in, either through an interactive tutorial or a live onboarding session. If you’re using a more complex system, in-person installation or professional setup might be available for an added fee.
Many providers also have video libraries, help centers, and user forums you can access anytime, so your team can get comfortable with the system quickly.
Next, you’ll link your POS system to a payment processor. Most modern POS platforms include built-in payment processing, which makes setup fast and straightforward.
If your POS supports multiple processors, you can connect an outside provider to compare rates and find the best fit for your business. Setup usually just requires your business and bank account information.
Once payments are set up, it’s time to load your inventory. You can manually enter products or upload them in bulk using a CSV file.
POS systems with strong inventory management will automatically track stock levels, flag low inventory, and highlight your best-selling products so you can make smarter restock decisions.
If you sell online, most POS systems make it easy to connect an eCommerce store or sync with platforms like Shopify, BigCommerce, or WooCommerce.
You can manage online and in-person sales from the same dashboard, keeping your inventory and reporting up to date everywhere you sell.
POS hardware can be as simple as a mobile card reader or as advanced as a full countertop station. It all depends on how and where you sell.
Some POS providers require you to purchase hardware directly from them, while others let you use your own compatible devices or reuse equipment from another system.
Here’s a look at the most common POS hardware components and what they do:
| Hardware Component | What It Does |
|---|---|
| Card Reader / Payment Terminal | Accepts credit and debit cards via chip, tap, or swipe. Mobile readers connect to smartphones or tablets via Bluetooth. |
| Tablet or Register Screen | The main interface for running your POS software, entering sales, and viewing reports. |
| Receipt Printer | Prints paper receipts for customers |
| Barcode Scanner | Speeds up checkout by scanning product barcodes and updating inventory automatically |
| Cash Drawer | Stores cash securely and opens automatically when processing cash transactions. |
| Kitchen Display System (KDS) | Sends orders directly from the POS to the kitchen of a restaurant for faster, more accurate service. |
| Customer-Facing Display | Lets customers view their order details, taxes, and totals in real time. |
Most small businesses start with a basic setup (like a tablet, card reader, and printer) and add more components as they grow.
Now that you understand how POS systems work, what they cost, and what to look for, it’s time to find the one that fits your business.
Start by thinking about your daily operations: how and where you sell, and which features matter most. Then, compare POS systems based on ease of use, hardware options, customer support, and pricing transparency.
To make the process easier, check out our full guide on how to choose a POS system, where we break down key factors and share expert tips to help you make the right choice.
A good POS system should make your life easier — not more complicated — and the right one will grow with your business.
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The vendors that appear on this list were chosen by subject matter experts on the basis of product quality, wide usage and availability, and positive reputation.
Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.
Square POS is an intuitive and simple point of sale platform. It offers customizable tools and a variety of add-ons to fit your business needs and reach your goals.
Get Started
