A Quick Guide To Point Of Sale ... because it's more than a card swipe machine!

Jan 13th, 2017

Point of sale is an overused phrase in the retail world. To legitimise the popularity of the word, we have researched how trendy 'point of sale' is on Google Trends.


Google Trends showing Point of Sale results in India over last 12 months.

As indicated by the above graph, the topic has trended towards the end of the year 2016. The key topics for POS that are searched online are financial transaction, cash machine, pos machine etc.

The state of Manipur has the most POS searches. In a recent report by Business Standard, the digital transaction via point of sale volume has grown up to 95% in Manipur.

Is it a bird? Is it a plane? It is… POINT OF SALE!

As much as the internet is raving about the term 'point of sale', it's definition is quite confusing.

We are here to simplify POS for you.

Point of sale can be defined as the technology of financial transactions at retail establishments. Wikipedia also calls POS as POP ( Point of Purchase) as it's a point where the transaction is completed. For instance, the point where you stand at the checkout and buy something and a transaction happens, that point is called as the point of sale. POS also serves as the point of service, as the counter is not only where the customer makes the purchase but comes back for customer support or to return any items.

Now, retailers mostly overuse the word POS for many other terms causing a bubble of confusion. Let's look at them-

1) POS mistaken as a cash register or a card swipe machine

Before POS became a technology, it was mostly known as a cash register in some small stores or just a card swipe machine. The simplest form of POS is perhaps a cash register. The sound of 'ting' as the cash drawer opens is an example of cash register nostalgia.

A cash register is actually the mechanical device used to calculate transactions at the point of sale. Where cash registers are hardware that can be attached to a printer, card machine etc, POS system is more of a computerised version.

Cash Register

A cash register tallies all day sales. Although, it can help in looking up the price of the product but it doesn't have the ability to scan the barcode of the product for finding it's pricing and details. Another backdrop is that it may or may not allow all the staff an option to track items and their categories. It doesn't have the ability to provide customer centric data with reports and customer relationship management(CRM) while handling large inventories.

Since the POS system is associated with face to face transactions with customers, it is also mistaken for EDC(Electronic Data Capture, also known as card swipe machines). EDC machines are nothing but payment terminals provided by banks for a secure payment process via debit or credit cards, prepaid cards, checks, electronic benefits transfers (EBTs) and other electronic transactions. They are generally integrated with cash registers or POS systems.

EDC machine

Under sales, POS system defines promotions, specials and discounts and also allows connection with EDC or card swipe machines for seamless transactions. It can integrate with the financial software, exporting relevant sales and inventory data. One can get monthly or annual reports of the sales and understand patterns in purchases. Apart from providing accuracy in transactions, POS system also gives an insight of the inventory and lets a merchant know what products are running low.

2) POS mistaken as ERP

Enterprise resource planning is another big term, that in many ways, gets mistaken for POS.

POS is a software that manages the 'front end' of the store. It is responsible for customer service, CRM, tracking store inventory and front-end sales and transactions. ERP is the software that provides cross-functional capabilities and takes care of business processes such as inventory, logistics and warehouse. Since ERP is responsible for retail planning, it is also known as Retail System Management in the retail world. A retail specific ERP keeps track of inventory, purchases, ordering and replenishment, payroll, finance etc.

One of the famous ERP systems is provided by Tally Solutions, a Bangalore-based company. One of their case studies includes Aarti Industries that have 10 units across Gujarat and Maharashtra. They integrated Tally ERP into their systems because their objective was to synchronise all units and corporate office and make business critical information available.

The new retail: Integration of ERP with POS

"Point of sale systems used to be standalone and front-end only but we are seeing far more integration across the whole business because of demand for information and the ability that gives people to make better decisions.", New Zealand Retailers Association chief executive, John Albertson.

In India, Tally ERP dominates the retail world. The system of buying and selling has become more complex as now retailers are putting customer data at the centre of their businesses.The data collected at the point of sale has become the most important.

What happens when POS and ERP are not integrated? Let's consider the scenario below-

As a store owner, you have a fabulous ERP installed and when a shipment of a new SKU's (stock keeping units) arrives, it is entered into the POS system. The POS system generates a sales report, daily or monthly. However, someone, perhaps an IT guy has to manually enter the data from sales report to the ERP software. Here, you are doing the redundant work.

Because if POS and ERP are integrated, as soon as the shipment arrives, the data is first stored in ERP system and ERP automatically updates the POS system. Similarly, when the stock finishes up, the POS system will update the ERP system. It digests sales, updates production and makes proper reports. There's also a less chance of data entry mistakes.

The integration also helps in the price management. When POS and ERP are integrated, the data such as what product is moving or just consuming shelf space will help in making right pricing decisions. Here, the customer data is shared within the stores that give surprising results.

The case of Surya Electronics in Pune is an example of POS-ERP integration. They were using Tally as both POS and ERP. However, Tally POS was cumbersome for their sales team. Thus, they were looking for an easy tool to replace their Tally POS that could provide mobility to their sales team, but without replacing their Tally ERP. Infinia retail has introduced an Ipad based POS solution for their offline stores that is now connected to their tally ERP and all of their business data has been synchronized cost-effectively.

Types of POS available in the market

From the invention of cash registers in the 1870s, the process of payment and transaction has evolved at the point of sale. With the advancement of technology, the form of a POS system has transformed. Here are the few types of POS available in the market-

Traditional or legacy POS

They are also known as terminal POS or standalone POS as they sit at the terminal or the checkout line. They are focussed on payment and checkout processes and support three main activities: payment, sales registration and customer relationship management( gift cards and loyalty programs). They are more suitable for small stores as they are more payment focusses and static.

Traditional POS System

Cloud-based POS

More evolved from the cumbersome, green screen traditional POS, cloud-based POS are accessed via Tablets or Ipads. Hence, they are also called as tablet POS. They have the most important feature of portability. The idea behind Tablet/Ipad POS is that the point of sale should be where your customer is. Retailers these days want more data on customers to provide a successful customer experience. Cloud-based POS are more focussed on assisting sales staff and create customer-centric reports anywhere. A good analytical data on customers helps build customer retention and loyalty.

Some tablet POS services are free with credit card processing and other required low subscription fees at the same time, allowing you to choose your own credit card system. Infinia retail provides a cloud-based POS runs on both iPad and tablet.

Infinia POS system


Also known as mPOS, they follow the idea of movability and portability of a tablet POS. mPOS allows the feature of contactless payment making it easier to swipe a credit card and add tip through smartphones apps like Google Wallet and ApplePay. One of the examples of mPOS in the international market is Square.


In India, Paytm is in news for bringing mPOS. Quite in controversy is Prime Minister, Narendra Modi's Aadhar card based 'paytm' rival BHIM app. The Bharat Interface for Money app will work like this. Merchants will download cashless merchant app on their smartphones connected to a biometric reader. During the transaction, the customer will feed his/her Aadhar number in the app, select the bank and the biometric scan will work as a password for transactions.

Over to you!

Still think POS is just a card swiper?

As digital transformation is hitting Indian retail's doorsteps, the clear understanding of POS has become imperative. The understanding of POS is directly associated with the requirements of your business.

What kind of POS will compliment your businesses? If you already have an installed POS system, is it the right one? Keep in touch with Infinia retail to find out more about the features of POS systems and how it can help drive up your sales and business profits.

By- Gaurav Soni | Jan 13th, 2017 | Restaurant

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