Traditional POS vs cloud-based POS – how the two systems differ
A POS system is a really valuable tool for businesses seeking to increase sales, manage company inventory and build a solid customer base. But the first decision a business owner needs to make is whether to choose a traditional or cloud-based POS system.
What is a traditional POS?
Also known as on-premise and legacy systems, a traditional POS system will run on closed networks with the data stored on local servers. In a retail setting, the business owner will have a device to take orders and make payments, and these communicate with the POS server. The network will manage the traffic flow between the device and the POS server.
What is a cloud-based POS?
This is a mobile POS system that is web-based and all data is stored online. Unlike the traditional POS system, cloud-based POS doesn’t require a server to communicate the information to a data centre – or the cloud in this case.
What are some of the differences between the POS systems?
Besides the practical differences between traditional and cloud-based POS systems, here is a look at how the two systems compare.
1. Integrated systems
Cloud-based POS is able to integrate with third-party software so as to customise the POS depending on business requirements. Some of the features you can expect with cloud-based POS include inventory management, accounting, loyalty programmes, and online ordering. Traditional POS systems have more difficulty integrating and, therefore, customising for business use.
2. Updates
As with all software, updates are needed and, in the case of traditional POS systems, this will take place manually, possibly once a year. Because of the nature of cloud-based POS systems, updates are automatic and can be done remotely. They also require more updates, but this does ensure the system is always current.
3. Data
For a traditional POS system, all the data is on-site, so any changes or checks need to be done physically. The storage of data is on local servers using a closed network, so a crash could result in a total loss of data. However, with a cloud-based system, data can be accessed anytime and anywhere, with real-time monitoring via any device. There is also less chance of data loss as it is automatically stored in the cloud.
4. Price
Because of the complex installation of the traditional POS on-site, and the maintenance fee for software updates, these are usually quite a costly option. With the cloud-based POS, installation is less complex and there is usually a subscription fee inclusive of updates, making it somewhat cheaper. However, there are factors that will increase these costs, such as business size and the number of connected devices.
5. Hardware
The traditional POS system is quite bulky and generally immovable, unlike the cloud-based POS system which uses portable devices. These do require constant re-charging, however.
6. Internet
Because traditional POS systems aren’t web-based, there’s no need for internet connectivity, whereas cloud-based POS systems are dependent on the internet. Some cloud-based systems do have offline capabilities so that certain activities, such as sales, can continue offline.
7. Scalability
The mobile, web-based nature of cloud-based POS systems makes them easily adaptable as a business grows, with new technology added as needed. For a business that has reached its maximum capacity, a traditional POS system would work well.
Both systems have their place, but it’s vital that business owners consult with providers who are responsive to customer needs and experience in the respective field. This way, whatever POS system is implemented – whether new or an upgrade it will work seamlessly with the existing business setup and enhance the value of the business overall.
