How Point-of-Sale Applications are Changing Small Businesses

By now, you know the statistics. In the US alone, 99.7% of businesses are small-medium businesses (SMB). They make up an enormous part of the statistic but they often don’t have the same capabilities as their larger counterparts.

What does this mean?

Unlike large businesses, SMBs don’t have the resources or funds to adopt large solutions or even develop them in-house like staying up to date with point-of-sale (POS) applications.

Cue POS app marketplaces – platforms, developed and deployed by POS providers that give SMBs third-party business applications the magic of modern POS systems at half of the cost or frustration.

SMBs’ growing needs present a huge opportunity for POS terminal providers, software providers, and resellers. Small businesses once strictly relied on cash payments because debit/credit machines created too large a fee and hassle to make their bang worth their buck.

In 2019, Fundera released a report that showed that 70% of consumers preferred card payments to cash. As these things do, cash made way for card.

And once they do buy in, POS systems are a significant investment for SMBs that they’re now stuck with. But, as cloud and mobile based POS systems continue to grow and improve, small business owners may be unaware of the benefits they could be missing out on.

According to a recent article by PYMNTS.com, the mPOS terminal market will be worth $55 billion by 2024.

History

Since their inception, POS systems have evolved and come a long way to match the ever-changing needs of businesses and consumers.

In 1879, the first cash register was patented in the hopes of keeping bartenders honest. 100 years later, in 1986, the first graphical POS software was trademarked allowing businesses the ability to not only ease transactions, but also keep track of pricing and inventory.

The machines continued to get smaller (even becoming cloud-based around 2002), physical buttons turned to screens, and gave businesses more control and ease over the POS.

In 2012, the next wave of innovation for POS hit the mainstream in the form of consumer grade tablets. Rather than clunky machinery, businesses were able to purchase and utilize application based software to match consumer needs in the technology space.

Mobile applications like Square, a handy tool that when plugged into your mobile device, allows you to accept debit and credit transactions. But once again, the fees can be quite substantial if you’re a rather small SMB.

Benefits

Optimized POS systems are a godsend for SMBs. They are easy to use, allow for faster processing, manage inventory (and even track price changes), keep track of employees, and offer better security for both the consumer and business. They also have the capability to allow small business owners access to a plethora of data, enabling ease of consolidation for reports and better business intelligence.

POS systems are an all-in-one solution to basic but daunting everyday issues that owners face in their day-to-day small business needs. Using a tablet POS with a mobile card reader for instance gives you the flexibility to offer a traditional checkout experience when you’re in your retail location, but with the option to move the POS to another location if needed. For SMBs, this means easier accessibility for events or pop-ups.

Future

Unlike the traditional machines that took up a lot of counter space and were expensive to install and maintain, there are now many streamlined POS cloud-based applications. Not only are these systems more cost-effective compared to their predecessors, but they are also significantly easier to update.

Being able to keep up with updates for POS systems makes it easier to follow customer trends, add new functionality, and fix bugs or issues if they arise.

POS systems have proven themselves to be the way of the future, but the proliferation of new and different POS systems has also presented some challenges. For example, Square is increasingly encroaching on the payments industry, putting pricing pressure on payment hardware and service giants. According to Business Insider, this has diminished client loyalty as merchants seek out the most affordable solution, and it’s resulted in lost revenue for providers.

SMB Content

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According to a recent survey by Intuit, 68% of SMBs stated that they use an average of four apps to run their businesses. Multiple operating systems and applications between fixed and mobile POS can also cause integration and inoperable issues leading to more headaches for small business owners.

With that being said, POS systems have the capability of improving customer engagement by making it easier to make a sale. As POS technology continues to improve it has the capability of omnichannel – a cross-channel content strategy that organizations use to improve their user experience. So rather than working in parallel, communication channels, their supporting resources are designed and orchestrated to cooperate.

Veem is a great example of diverse financial services streamlined for optimal user experience. Veem helps SMBs send and receive payments, and synchronize all financial data in their chosen accounting software. Moreover, Veem even offers financing solutions to businesses in need.

* This blog provides general information and discussion about global business payments and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.