In the world of retail, the term “point of sale (POS) transaction” is widely used. But what does it really mean? And how does it impact your business?
Whether you’re a seasoned retailer or a brand new business owner, understanding the mechanics of a point of sale transaction is a must for managing efficient business operations.
So, what is a point of sale transaction? Simply put, it’s the point at which a customer makes a payment in exchange for your goods or services.
But this seemingly straightforward process actually encompasses a lot more than just the exchange of money for products. Let’s dive in a little deeper.
How Does Payment Processing Work?
Payment processing is a simple process that includes the authorization, authentication, and settlement of a payment. Basically, the customer’s information is processed by their bank, and funds are sent to the vendor as the transaction is completed. Then, the bank verifies the customer’s card number and PIN. The transaction can take up to a few days, depending on the system used.
There are many ways to pay for goods and services — and not every POS solution offers a wide variety of payment options.But the best point of sale systems accept almost any type of payment option — from cash to credit to contactless pay — giving customers as much flexibility as they need.
What Types of Point of Sale Transactions Are There?
There are many different types of transactions in the point of sale world, and the right one comes down to how the customer prefers to pay for your goods or services. Any point of sale system should strive to serve all customers, catering to what they need most. Let’s dive deeper into a few different types of transactions.
Cash Transactions
Cash transactions are as simple as it gets. The customer exchanges bills and coins for the product. It’s easy for both the customer and the merchant, and even with the retail industry’s shift to card and contactless payments, there’s still a need to accept cash payments.
Debit and Credit Transactions
In recent years, debit and credit cards have become the most popular way to pay for goods and services. While debit cards take money directly from the customer’s bank account, when someone pays for a product with a credit card, they are using a line of credit with a bank (which can also help people build a better credit score!).
Mobile and Contactless Pay Transactions
Mobile and contactless payment methods are the quickest and most convenient way for customers to pay for products — it allows them to wave a card or phone near a payment terminal to complete a transaction.
Mobile wallets such as Apple Pay and Google Pay are becoming more mainstream, making it more important than ever to consider offering contactless payment options to your shoppers. Doing so not only makes things more convenient for them, but also decreases waiting times for any lines while reducing the inherent risk of handling cash.
Do You Need an Industry-Specific Point of Sale System?
A liquor store and a clothing boutique don’t need the same things, so why would they use the same system? Having a POS system that’s tailored to your business’ specific needs can help streamline your operations.
Most systems share a number of features, like inventory, employee, and marketing management features — and all POS systems have the ability to process sales transactions.
But every industry is unique, and that means that these features need to be tailored to your specific needs, whether you run a small grocery store or a multi-location liquor store. Make sure to look for a point of sale system that’s designed for the needs of your unique business.
Point of Sale Transactions Made Simple With POS Nation
Your point of sale system should make your life easier as a small business owner, which is why we offer industry-specific solutions for everything from small markets to cigar shops to liquor stores. From real-time dashboard notifications to multi-location pricing and inventory features, POS Nation can do all things point of sale.
If you’re interested to learn more about how POS Nation can help streamline your business operations, schedule a demo with our team today!