What is a POS system?

A point of sale (POS) system is more than a simple cash register. It’s a technology that allows merchants to process payments, log transactions, manage inventory, monitor buying trends, create invoices, collect marketing data, and sometimes implement customer loyalty programs.

A POS system can be used by any business that processes sales, including restaurants, retail stores, beauty salons, cafes, hotels, and much more.

How POS systems work

POS systems can be physical tools or cloud-based; either way, they enable businesses to process transactions. Items can either be scanned with a barcode or input into the system manually. The POS identifies the items, calculates the total cost, takes payment, and logs the transaction for future records.

Most POS software can record data, including the name and quantity of items, making the system very useful for businesses that need to manage inventory and track the most popular items.

These systems usually take multiple types of payments.

• Card payments – POS systems will include the hardware and software to enable card swiping, chip reading, and encrypted data readers.
• Cash payments – POS systems designed to accept cash payments usually include a way for customers to insert cash or a place for the cashier to store it. The system can also track cash transactions, ensuring the proper amount is paid.
• Contactless payments – With ever-increasing technology, contactless payments have grown in popularity. Whether by tapping a card or using a stored payment method on a cellphone, POS systems can detect and process contactless payments.

Benefits of using a POS

Businesses that use a POS system can expect many benefits. Not only does it streamline transactions for both customers and the business, but it also increases efficiency and accuracy with payments, inventory management, and customer satisfaction.

POS systems automate the process of tracking important sales data. Depending on the software’s features, a POS can generate reports about sold items, inform management about what needs to be restocked, and track sales patterns.

Knowing what customers want most and when allows businesses to increase potential profit and adjust pricing as needed. Most POS software can also protect both customer and business data, preventing data theft and fraud.

What do POS providers do?

POS software providers offer a variety of POS systems to meet the needs of businesses across all industries.

Providers can offer businesses all the needed hardware and software to complete transactions at their location, including mobile payment devices, a cash register, inventory tracking software, and much more.

Essentially, POS providers work with businesses to meet all their point-of-sale needs. Some providers even send technicians to install, repair, and maintain POS systems.

Industry-specific POS systems

Depending on the type of industry your business is part of, your point-of-sale needs will likely differ from those of a business in another industry. As such, many of the best POS software providers tailor their services to adhere to industry-specific requirements.

Below, we highlight the best industry-specific POS software providers and briefly explain what each industry might need from their POS system.

Restaurant

Restaurants need a customizable and efficient POS system that can handle hundreds of unique orders at once while ensuring accurate prices. The system must also account for promotions, tips, and coupons and ensure the security of customer data. For restaurants with table-side checkout options, the interface needs to be user-friendly so customers can easily pay their bills.

Many restaurants also need help tracking inventory. With detailed POS reports, they can easily identify which items are bought most as well as identify any spending trends.

Discover the best restaurant POS providers in 2025.

Coffee Shop

Coffee shops fall under a similar category to restaurants; however, they have unique needs that larger restaurant chains may not need. Coffee shops generally only need one or two registers that accept all types of payment. They also need a system that can help manage inventory, generate reports, and process tips.

Many local coffee shops also sell non-drink items, such as baked goods, sandwiches, local art, plants, and sometimes even cocktails. As such, they need a customizable POS system to meet their unique sales requirements.

Bakery

Similarly, a bakery needs a POS system that can track ingredients and items sold. The system must also handle advanced bulk orders and immediate single orders. If the bakery offers customer loyalty programs, the system must accurately store and track that information.

Retail

Retail POS systems may be the type most people are familiar with. They process cash and card payments, track inventory, generate reports, and manage customer data, whether loyalty programs or banking information.

Many retail stores have an online store in addition to a physical location. As such, the POS system must handle online transactions at all times. It needs to be able to accept online payments and connect securely with banks securely to ensure the protection of both the business’s and the customer’s data.

Discover the best retail POS providers in 2025.

Convenience Stores

Convenience stores will have similar needs to retail stores; however, the breadth of items will vary greatly. From food and stuffed animals to makeup and medication, convenience store POS systems must track and manage different items, applying any taxes that might accompany some items but not others.

Discover the best convenience store POS providers in 2025.

Beauty and Health

The beauty and health industry mostly uses POS systems to manage appointment scheduling, inventory tracking, customer data management, sales transactions, tipping, payment processing, and reporting.

This allows spas, salons, and other beauty businesses to streamline operations while providing efficient service to their clients.

Liquor Stores

Liquor stores must adhere to different state laws about the sale of liquor; as such, their POS systems must be customizable to meet those requirements. In addition to processing sales transactions and tracking inventory, these POS systems must also ensure customers meet age requirements, either by including an age input prompt for the cashier to fill in or by scanning the customer’s ID to ensure its validity.

POS statistics

B2B Reviews recently conducted a study into the most important POS statistics. Take a look at our key findings to get an overview of this growing industry:

• The global POS software market is expected to grow to $74.7 billion by 2032.
• 71% of restaurants prioritize cloud-based POS functionality, and over 60% of recent POS purchases are cloud-based.
• The mobile POS market will reach $5.63 trillion by 2027 and 1.9 billion global users by 2026.
• Over 72% of businesses use data mining and analytics to prevent fraud.
• Square dominates the POS software market with a 27% share, followed by Toast at 24%.

The Bottom Line

POS systems are more than simple cash registers. They’ve become essential tools for businesses across all industries. From streamlining transactions and inventory management to enhancing customer satisfaction and data security, POS systems provide many benefits.

With the market continuing to grow and technology constantly advancing, businesses have more options when it comes to choosing POS software to optimize their operations. Choosing the right provider can increase efficiency, improve sales tracking, and ultimately support long-term success. Take a look at our industry-specific guides to see which POS might be best for your business’s unique needs.