How Much Does a New POS System Cost?

With so many businesses now knowing what point-of-sale systems are and the value they bring, there are now more affordable options than ever. Businesses can choose to purchase or lease, and there are hundreds of customization options that can make your company's next POS system into exactly what you need.

The exact cost of a POS system depends on what kind of software and hardware your business needs, as well as how much customization you'll be doing. In addition, much of the cost variance comes from credit card processing rather than the hardware or software, especially for small businesses. 

Since there are so many options, discerning the differences can be challenging. To help, we've put together a list of the types of POS systems available, with general pricing information. We've also included applicable business types and a short list of suggested POS providers. Using this information, you can decide which option fits your budget and requirements.

Editor's note: Looking for the right POS system for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

POS software costs 

From our research, we know that when choosing POS software, you have choices that can cost as little as $10 to around $250 a month, depending on the features you want. A basic POS system with one card reader will be much cheaper than POS terminals spread across different points and multiple locations. Merchants can choose an on-premises POS system or cloud-based POS software. The latter is cheaper and more popular among merchants and restaurant owners. [Ready to purchase a POS system? Check out our reviews and recommendations of the best POS systems.]

POS hardware costs

Businesses that process payments in person, on the go, and tableside have several hardware devices to choose from. A basic POS station uses a tablet or touchscreen, credit card reader, receipt printer, and cash drawer to accept payments. Others only need a mobile card reader, while some require a variety of POS hardware spread across different locations. With POS hardware, you incur an upfront cost that can be as little as $20 to around $2,000, depending on your needs.

FYI: The total cost of your POS system depends on what features you need. The more complex they are, the more you should expect to pay.

Additional POS system cost factors to consider

Outside of POS hardware and software expenses, several other fees are associated with a POS system. Here's a look at the big ones.

• Payment transaction fee: This is the fee for each transaction made with a credit or debit card. Typically, it's a couple of percentage points of the customer's purchase plus a few cents. For instance, Square's processing fee is 2.6% plus 10 cents for every swiped transaction, 2.9% plus 30 cents for invoices and e-commerce payments, and 3.5% plus 15 cents per transaction for virtual terminal and keyed-in transactions.
  
  
• User accounts: Most POS software packages cover a set number of staff accounts. The more logins you need, the more you may have to pay. Some POS vendors offer unlimited accounts to stand out from their rivals.
  
  
• Extra hardware: Whether you need more registers or additional card readers, extra hardware will cost you more.
  
  
• Software plan upgrades and add-ons: POS systems are so much more than simple payment processors. They can manage inventory, automatically reorder stock, and provide access to custom reports. But all those extra features aren't free. The number of features you want will dictate your monthly cost. Lightspeed, for example, has several packages, with pricing starting at $69 a month for its basic plan to $229 a month for its advanced plan.

Types of POS systems by cost

Whether you are a one-person retailer or have several stores, there is a POS solution for you. Depending on your needs and budget, you can do it on the cheap or spend a ton of money. With that in mind, here's a look at the offerings available at different price points. [Read related article: Buying a Retail POS System? Here's How to Choose the Right One]

Mobile payment processing

Mobile payment processors provide you with a card reader that attaches to your mobile phone. Usually, the card reader is free and you pay per swipe. Here are some things to keep in mind if you're considering this type of POS system:

• Pricing may vary by the volume of your transactions. Average swipe fees are around 2.7% if you choose a processor that doesn't charge any other fees. Some may charge a certain monthly subscription fee for a lower swipe rate. Most do not require a long-term contract; you pay as you go. Avoid signing long-term contracts for any type of credit card processing; most companies will give you the option of month-to-month terms if you ask.
  
  
• Many mobile processing apps are free and have basic POS features. Typically, these include a product catalog, basic inventory tracking and customer management tools. More features may be available as paid add-ons.
  
  
• Many companies offer a free or very affordable ($10 to $15) card swiper. However, these are often basic models that only read the magnetic stripe on payment cards. You should plan on purchasing an upgraded model that accepts chip cards and contactless payments. This will protect you from liability for counterfeit fraud that occurs at the point of sale and enable you to accept contactless cards, Apple Pay, and Google Pay.
  
  
• Hardware options are often available. Many mobile processing apps are compatible with hardware like receipt printers and barcode scanners (some are Bluetooth enabled). Most of these card readers also work with the iPad or Android tablets (with 4G) in addition to the iPhone and Android phones.

Here are some of the options for mobile payment processing: 

• Square: This mobile POS processor is ideal for growing businesses, as it doesn't charge account maintenance fees. You pay a flat rate per transaction, which makes it affordable if you are accepting a couple of sales a day, but it can also grow with you as you expand. When reviewing Square, we found that its free POS app is rich in features, enabling you to accept payments, offer discounts, and track inventory, among a host of other things.
  
  
• PayPal: PayPal is a popular mobile payment processor, enabling small business owners to accept credit, debit, and PayPal payments on the go. Through our review of PayPal, we found the company offers flat-rate pricing and pay-as-you-go terms, which can save you money if you don't process that many credit card payments per month.
  
  
• QuickBooks Online: QuickBooks Online from Intuit is very popular accounting software for small businesses and also includes the ability to accept payments. QuickBooks offers a ton of features and integrations at an affordable price, which is why, after reviewing QuickBooks Online, we recommend it as one of our best picks. 

Applicable businesses: These systems are a great option for any small business, including farmers market and art fair vendors, small restaurants, freelance contract workers, and small retail shops or kiosks. However, they are most cost-effective for businesses that process less than $5,000 per month.

Bottom line: Mobile POS systems are great for small businesses that want to accept payments on the go. From Square to PayPal, there are many POS vendor options in this area of the market.

Tablet and online POS (iPad and Android)

Tablet and online POS apps are increasingly popular. Upfront costs are minimal if you already own the hardware. 

• Most charge a monthly fee for software. Some providers charge a low monthly subscription rate (ranging from $30 to $75 per month for a basic plan, and $120 to $230 for an advanced plan) and allow you to choose your own credit card processor. Some allow you to use the app if you use the company's credit card processing services. Look carefully at what the plan supports and what features it includes.
  
  
• Monthly plans are usually available. Most POS software providers do not require a long-term contract, offering a choice of month-to-month or annual upfront payments. You get more flexibility with a month-to-month plan, but you may be eligible for discounts with an annual subscription.
  
  
• They come with a lot of POS features. Many of these apps include inventory tools, customer management, reporting options and other POS features. 

These are some of the available tablet and online POS options:

• TouchBistro: TouchBistro is a leading POS provider for the hospitality market, serving all sizes of restaurants. Its POS software is affordable and has a ton of built-in features. In our review of TouchBistro, we found it to be a standout for restaurant owners for several reasons, including its robust inventory management, tableside ordering and payment processing tools, and online ordering options. You can also easily create loyalty and rewards programs with TouchBistro.
  
  
• Toast: Toast is an all-in-one POS system that comes with everything necessary to run a restaurant or cafe. The vendor offers a variety of hardware, from handheld devices to contactless kiosks. The software, which lives in the cloud, has a ton of restaurant-friendly features. For instance, through our full review of Toast, we found you can easily manage seating and menus, track inventory, run reports, and get actionable analytics and insights.
  
  
• Lightspeed: A POS provider to both the retail and restaurant industry, Lightspeed offers customers an impressive set of hardware and software to manage their businesses. Lightspeed's standout features include tableside ordering, inventory and customer management tools, and third-party integrations. In our comprehensive review of Lightspeed, we found it to be an affordable and feature-rich POS system. 

Applicable businesses: This type of POS is often used by coffee shops, food trucks, boutiques, small and midsize retailers, professional service providers, salons, pet groomers, and quick- and full-service restaurants (integrated with a full restaurant POS for tableside ordering and payment processing).

Tip: When shopping for a POS system, make sure it has features and functionality geared toward your type of business. A POS that specializes in e-commerce isn't ideal for a cafe, for instance.

All-in-one POS for payment processing

These POS systems are most often touchscreen terminals with associated POS software, barcode scanners, receipt printers, and cash drawers.

• Free hardware offers require noncancelable contracts. Some companies provide the POS system for the cost of shipping and a monthly service fee (usually about $29 to $39 per month per terminal). But you must agree to a long-term, noncancelable contract that includes a credit card processing agreement. Contract terms are typically three to five years.
  
  
• Hardware may be proprietary. Some POS companies, like Clover, require you to purchase their proprietary hardware, use their software (which often has a monthly fee), and process payments through their service. Depending on the company, though, the contract may be flexible. Some include migration services, installation assistance, backup services and training.

Clover is one option for an all-in-one POS provider, giving customers access to an array of affordable hardware. When you select this POS vendor, you get a one-stop shop for your processing needs. Our review of Clover found that you get fast credit card and digital payment processing; the ability to accept orders online, curbside, or via mobile devices; and easy-to-create loyalty programs, all for an affordable price.  

Applicable businesses: These systems are often scalable. One terminal would fit in a boutique, quick-service counter, large retail store, or full-service restaurant. Since these systems require a greater commitment, we recommend speaking with a consultant to tailor your solution to your business.

Traditional POS systems

This option costs the most upfront, but it allows you to choose exactly what you want. In most cases, you can choose your own hardware, software and payment processing service to create a custom solution. In some cases, this type of POS allows you to continue working with your current credit card processor.

• Upfront costs are high. The initial costs for one terminal start around $1,500 and go as high as $5,000, depending on your needs. Most offer a service agreement or extended warranties if you need them.
  
  
• Many peripherals are available. Many full-service POS companies offer a wide variety of peripherals, such as age verifiers, kitchen printers, omnidirectional grocery scanners and scales, and handheld inventory devices. Some are compatible with other types of POS systems, such as the tablet and online systems we discussed above. 

Applicable businesses: A traditional POS suits any business that has the startup funds for it and the desire to customize a POS solution. Some of these services are also helpful if you just need to add peripherals to your existing system. Most provide point-of-sale consulting should you require assistance.

Is there a free POS system?

Some POS vendors lure you in by offering so-called "free" POS terminals. But going the seemingly free route will often cost you more in the long run than if you'd just purchased the equipment. Typically, to get the deal, you must sign a contract for the POS vendor's credit card processing service, which locks you in for one to three years. You'll also be on the hook for a monthly maintenance or insurance fee in addition to the credit card processing fees and your POS monthly subscription rate.

Any business, whether it has a dollar in startup capital or thousands, can now easily acquire a POS system that suits its needs. Since price is mostly tied to credit card processing for small businesses, we recommend you pick out a few solutions that will work for you and then compare transaction rates and fees (including monthly, monthly minimum, PCI compliance, and gateway fees). Many services will even match competitors' rates, so it is worth trying to negotiate; a few percentage points could save you thousands in the long run.