A POS (Point of Sale) is a valuable tool for retailers and merchants seeking to increase sales, build a solid customer base, and manage business inventory. However, every merchant’s first decision is whether to choose a cloud-based or traditional POS. This post will compare Cloud-based POS and Traditional POS in several different areas, including features offered, cost, and many other aspects, to help you decide which POS system is the right choice for your business. Let’s get started!
| Cloud-Based POS | Traditional POS | |
|---|---|---|
| Hardware | Hardware installation is not needed | Requires hardware installation |
| Accessibility | can be accessed from anywhere | Can only be accessed on-site |
| Software updates | Easy and frequent automatic updates | Manual updates |
| Security | Features advanced security tools | Less secure |
| Cost | Subscription model; no to a little upfront fee | High upfront fee |
| Maintenance | Online | Offline |
Sections
Cloud-Based POS vs Traditional POS: A Quick Comparison
Cost
Cloud-based POS edges Traditional POS as it charges little to no upfront fee.
Cloud-based POS is generally cheaper as its installation is simple. It often charges little to no upfront fees and follows a monthly or annual subscription model. The service providers automatically update the software, and the cost is already included in the monthly or yearly subscription charges. However, the subscription fee varies depending on the business size.
For instance, the number of employees, stores, and devices can influence the pricing, making Cloud-based POS just as expensive as traditional POS in the long run. Moreover, there are hundreds of free cloud-based POS apps that you can download to your device with optional upgrades and add-ons at a relatively low cost. Therefore, you will only be required to pay the hardware cost, including devices, cash drawers, scanners, printers, etc.
When using Traditional POS, you often need to pay a flat upfront fee for sales data collection software and specialised billing equipment. This upfront fee is relatively high and is one of many you will be charged. You will also be charged a maintenance fee as this software needs to be updated manually on-site. This requires extra time, labour, and money. Moreover, when your system crashes, the re-installation cost can be expensive.
Software updates
Cloud-based POS edges Traditional POS by offering frequent updates.
For Cloud-based POS systems, the POS vendors handle the updates automatically and remotely. No software engineer or tech professional needs to come to your store to update the system manually. Besides, Cloud-based POS systems are usually updated frequently in real-time. This ensures that you make effective and good use of all functions and features immediately after updating.
For most Traditional POS systems, when a software update is needed, a technologist or software engineer has to visit your location to program the update process manually. You can not do the regular update process with Traditional POS systems, perhaps once a year at most, because manual updates are time-consuming.
Hardware
Cloud-based POS edges Traditional POS as it does not require hardware installation.
Cloud-based POS uses portable devices, such as smartphones and tablets, making it easy to carry anywhere. You only need to connect your portable device to the internet. For instance, your POS system integrates receipt printers, credit card readers, and other business tools through an internet connection. Being independent of hardware allows for quick and inexpensive system installation. However, most Cloud-based devices have a short battery life and should constantly be connected to the charger.
Traditional POS systems are often made up of relatively large, bulky, and heavy hardware devices. They take up a significant amount of space on the desk or counter. For instance, the most common screen size of a traditional POS system is 15 inches. Besides, Traditional POS devices are stationary and difficult to move. This is why you must stay at your store to manage your business. However, most merchants see this as a pro as it prevents theft of the devices.
Integration capabilities
Cloud-based POS edges Traditional POS systems by providing full integration with other applications, software, and modules.
Cloud-based POS allows you to fully integrate your POS system with other software, applications, and other functional modules. This helps you to customise your POS according to your business needs and manage multiple tasks (jobs) on a single system. These modules include CRM (Customer Relationship Management), inventory management, online ordering, loyalty programs, accounting, etc. Besides, it allows users to communicate with their online shops via eCommerce or social media platforms.
Traditional POS systems are often complicated and challenging to integrate with other programs, software, or modules. The lack of integration functionality restricts your system’s ability to grow with additional new features. This makes it challenging to customise your system to suit your business requirements.
Data management and accessibility
You can access Cloud-based POS systems from any device, anytime, and anywhere, while Traditional POS can only be accessed on-premise where the hardware is placed.
With a Cloud-based POS system, all your data is stored online, making it accessible anytime and anywhere. For instance, no matter where you are, you can easily manage and access your data in real time. Cloud-based POS systems give users remote accessibility, eliminating the need to always be in their store to do everything. You only require a stable internet connection and an electronic gadget such as a tablet, laptop, or smartphone. If, for any reason, you lose your internet connection while running your store, do not panic. Your business will continue running, and the data will sync when a stable internet connection is established.
With Traditional POS systems, data can only be accessed and managed on-site. For instance, you must be physically present in your business facility near the computer to manage product or item data, see and examine sales reports, and manage product data. Moreover, since Traditional POS systems run on closed networks and local servers, users can not access their data via multiple devices.
Security
A Cloud-based POS system is more secure from security hazards and data threats than Traditional POS systems.
Data stored from Cloud-based POS systems can be accessed from any device and anywhere as it is stored online. Therefore, POS vendors are in charge of system security. For instance, they have the technical know-how and resources to store data securely online. Besides, your data is backed-up automatically in the cloud, and it is easy and quick to restore the backed-up data if your system crashes. Every data is stored in the cloud, so you shouldn’t worry about your data getting lost.
Data from Traditional POS systems can only be viewed or accessed locally unless you have installed a terminal server. The business owners are responsible for data security. Your data can be at risk if you do not implement adequate security measures. Moreover, data can’t be recovered if your server is stolen or damaged, crashes, malfunctions, or gets hacked.
Data Storage
Cloud-based POS stores data on remote servers, while Traditional POS stores data on local servers.
Cloud-based POS systems store business data on remote servers. The data is safe and backed up; your data will be typically unaffected even if anything happens on your physical device (system). It also allows users to update their data automatically and in real-time easily. Although Cloud POS exposes users to cyber attacks, its security is robust to counter them.
Traditional POS systems run on a closed internal network and store business data on local servers. This secures it against potential hackers. Besides, most vendors use industry-standard security protocols to keep their data secure. However, if a system fails or a virus attacks your system, you might lose your unbacked-up business data forever.
Scalability
Cloud-based POS edges Traditional POS as it allows users to upgrade or downgrade their subscriptions to meet the changing business needs. With no requirement for proprietary hardware, you can upgrade or downgrade
Cloud-based POS subscriptions according to your business needs and demand. For instance, you can launch temporary pop-locations or new branches.
Traditional POS systems are only allowed to be utilised in one location. You must purchase new hardware and systems to run them if you want to open a new business branch.
Internet dependency
Traditional-based POS edges Cloud-based POS as it does not depend on internet connectivity.
Cloud-based POS systems heavily rely on the internet. Therefore, business operations are significantly affected if internet connectivity is poor or lost. However, some Cloud-based POS systems are designed with offline capabilities. This allows users to continue making sales and running their businesses without an internet connection. Your data will be synced later when the system is connected to the internet again.
Traditional POS systems don’t rely on internet connectivity. Therefore, your business will continue running efficiently and smoothly without affecting the service, even if there is no internet connection.
Final Thoughts
Overall, both Cloud-based and Traditional POS have their pros and cons. Although Cloud-based is more popular and outstanding, Traditional POS has unique features that suit some business types. Therefore, the best choice between the two POS depends on the business type, scale, and needs.