There are many pros and cons of online, cloud-based POS systems. If you’ve been in the retail business for a while, you may have encountered a POS system that is “paperless,” with all transactions processed digitally instead of on paper. You can expect to see more and more businesses implement this method as time goes on because it fits the needs of consumers in this digital age.
However, not everyone is convinced about its benefits. Some critics say that the benefits of cloud-based POS systems are greatly in overstate and that it will hurt your business in the long run. So before you put all your hard-earned money into a cloud-based POS system, consider the following pros and cons of online, cloud-based POS systems.
Pros of Online POS Systems
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The greatest advantage of online, cloud-based POS systems is cost. Since no ongoing software costs are involved, you can save a tremendous amount of money by switching to an online POS system.
No Hardware Expenses
If you’re upgrading your equipment, like adding a new computer to the existing system, you’ll have to pay for the upgraded hardware and its installation. However, with an online POS system, there’s no need to buy expensive hardware because it runs on a server somewhere in the world. All you need to do is find a web-based system that fits your needs and install it yourself.
No Installation Expenses
Since you don’t have to buy any hardware, you also won’t have any installation expenses. You can save a lot of money by installing an online POS system yourself. Instead of paying a few thousand dollars for professional installation, you’ll only pay the low one-time fee to subscribe to the service provider’s data service and POS software package.
Less Expensive Software
If you’re on a tight budget, the software required to run an online POS system is considerably cheaper than the software for a normal point-of-sale system. You can subscribe to a cloud-based POS solution that offers free POS software as an attractant.
More User Friendly
Since your users don’t have to work with the hardware physically, they will find it much easier to use an online POS system. They don’t have to worry about installing any special equipment or going through lengthy setup procedures. The software and hardware already exist, so users can log in and start using them.
Option to Add More Vendors
According to Lightspeed, “Some online POS systems like restaurant pos systems allow you to add more vendors to the software, which gives you more options for expanding your business. You can add more vendors at a later date if your business grows.
Cons of Online POS Systems
Risk of Loss if Server Goes Down
The biggest issue with an online POS system is that you don’t have any products to sell if your Internet connection fails. If the server goes down for any reason, you won’t accept payments or process orders. You also won’t be able to view data related to transactions or inventory levels.
Just as security is a problem with paper-based point of sale systems, so is it a problem with online systems. Although some cloud-based POS system providers offer more security than others, there’s still some risk involved with storing your data in a remote location. If your POS provider isn’t secure enough, you could be giving cybercriminals access to sensitive customer data and financial information.
Higher Risk of Fraud
Online, cloud-based POS systems can help you reduce transaction costs and streamline your operations. However, fraud will likely happen unless you have a fully automated system that monitors every interaction with your customers and employees. If the system is not programmed to catch fraud early enough, there could be losses to be recovered from customers or possibly even lawsuits filed against you.
Higher Perceptions of Risk
There’s always some risk involved with online POS systems. Even though providers may claim that their security measures are the best in the industry, the risk is still there. Without personally seeing your POS software installed and configured, you can’t be sure it’s 100% safe. If you have an online POS system installed for you or don’t fully understand how it works, customers may be wary of using it.
Higher Cost of Business
Because you’re required to buy your hardware and pay the monthly service fees, you may experience higher operating costs due to the equipment costs.
Building a strong business requires planning and preparation, including hiring employees and maintaining the right salesperson training program. There’s also the cost of product inventory to consider. All these expenses take money out of your pocket. If you’re operating online, you’ll need to invest in extra computing power if you want to boost production levels.
The advantages and disadvantages of online, cloud-based POS systems can go either way. It depends on what type of business you’re operating and what your needs are. If you’re looking to upgrade your sales and inventory management system, an online POS system may be the perfect choice for you.