POS System Buying Guide: What to Know Before You Choose

Why Your POS Choice Affects Your Processing Costs

Many merchants do not realize that their POS system and their payment processor are separate decisions — and that they can and should be evaluated independently. Some POS systems are tightly integrated with a specific processor, which means you have no ability to shop for better rates. Others are processor-agnostic, giving you the freedom to choose the processor that offers the best pricing.

Before choosing a POS system, ask explicitly: Is this system locked to a specific processor, or can I use any processor I choose? The answer will significantly affect your long-term processing costs. For more on how processing rates work, see our guide on interchange-plus vs. tiered pricing.

Types of POS Systems

Key Features to Evaluate

Payment Acceptance

At minimum, your POS system should accept chip (EMV), contactless (NFC/tap-to-pay), and magnetic stripe. Chip and contactless acceptance is important for two reasons: it reduces fraud risk, and it qualifies transactions for lower interchange rates. A system that only accepts magnetic stripe swipes will cost you more in processing fees and expose you to greater fraud liability.

Reporting and Analytics

Good POS reporting should show you sales by item, category, employee, and time period. For restaurants, you want table management, tip tracking, and split-check capability. For retail, you want inventory tracking and low-stock alerts. If your current system cannot tell you which products are your top sellers or which hours are your busiest, you are leaving money on the table.

Processor Compatibility

This is the most important question to ask before signing anything. Some systems — particularly those from Square, Toast, and Clover — are designed to lock you into their processing ecosystem. Others, like many Dejavoo and PAX terminals, are processor-agnostic.

If you are considering a processor-locked system, calculate the total cost of ownership including processing fees over the life of the contract. A system that appears free or low-cost upfront may cost significantly more over three to five years if it locks you into above-market processing rates.

Support and Reliability

Your POS system needs to work when you need it. Ask prospective vendors about uptime guarantees, offline mode capability (can you still process transactions if your internet goes down?), and support availability. For a retail or restaurant business, a POS outage during peak hours is a serious problem.

Also ask about the support model. Is support included in your monthly fee, or is it billed separately? Is it available 24/7 or only during business hours? Our merchant services include direct support from David — not a call center.

What to Avoid

• Equipment leasesNever lease a terminal. A $300 terminal leased at $40/month for 48 months costs $1,920. Always purchase outright or negotiate free equipment as part of your processing agreement.
• Long-term contracts with high ETFsAvoid contracts longer than two years with early termination fees above $300. Month-to-month agreements are available and worth seeking out.
• Processor-locked systems without a cost analysisIf a system locks you into a specific processor, get a full cost analysis before signing. The processing fees over three to five years may far exceed the apparent savings on the hardware.
• Systems without offline modeIf your internet connection goes down, you need to be able to keep processing. Confirm that any system you consider has a reliable offline mode.

Frequently Asked Questions