POS Hardware: The Top Options for Small Businesses

Everything you need to know about POS hardware so you can find the right products for your business.
NerdWalletSep 23, 2020

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You're probably already familiar with POS hardware, even if you don’t realize it. The cash register at your local convenience store is POS hardware, as is the iPad-mounted mobile card reader at your favorite restaurant.

When it comes to purchasing POS hardware, most businesses will need a POS terminal, credit card reader and maybe a cash drawer, a barcode scanner and a receipt printer — all of which can add up to a significant business investment. And because so many options are available, it's often challenging for small-business owners to figure out which products are truly a good value. Here's what you need to know to make the best choice for your business.

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What to look for

When shopping for POS hardware, there are a variety of factors to keep in mind to ensure you get something that makes sense for your business.

Compatibility

POS hardware works in conjunction with POS software to allow your business to run transactions. But POS hardware does not work with all POS software. Typically, POS companies make software that is only compatible with certain types of hardware. Lightspeed, for example, can only work on iOS devices. When shopping around for hardware, make sure you learn the kind of software it can integrate with. Your POS provider will normally sell all the hardware that is compatible with their POS software, but if you decide to buy from third-party vendors, you may run into some issues.

Price

Depending on what your business needs, you can acquire your POS hardware for no cost at all or pay as much as several thousand dollars. For example, a merchant that wants to sell products off their e-commerce website at a live event can sign up for Square and receive a free mobile card reader. Conversely, a merchant who owns a brick-and-mortar clothing store will likely need to buy a countertop terminal, barcode scanner, receipt printer and cash drawer — all of which can cost a lot of money depending on the provider.

Another thing to keep in mind when buying POS hardware is the cost you will pay for a hardware bundle. For example, the aforementioned brick-and-mortar clothing store owner may be able to buy a retail POS system from their POS provider at a discounted price than what they would have paid to purchase each product individually. On the other hand, sometimes it’s cheaper to buy your POS hardware from a third-party vendor — as long as it is compatible with your software. The only way to find the best deal on POS hardware is to do your research. See what hardware your POS provider offers and then see if you can find other compatible hardware for cheaper on Amazon or eBay.

Some POS providers offer their own proprietary hardware specially designed for their software (as is the case with Clover and ShopKeep). Others have deals with POS hardware brands to resell their products. POS hardware providers also sometimes offer unique pricing models for their products. Square, for example, allows you to finance your POS hardware over 24 months. Restaurant POS provider TouchBistro will work the cost of your POS hardware into the monthly fees you pay to use their service.

Usability

You’re going to be using your POS hardware a lot, so you need to find something that is easy to use and responsive to the needs of your business. For example, if you sell your wares primarily from events, pop-up shops or conventions, it might make sense to use a POS system that is cloud-based so you never risk losing your data. Other things to consider are if the POS system can operate offline, the kind of Wi-Fi router the POS software needs to operate and the durability of the hardware (make sure your hardware comes with a warranty).

Many POS providers offer a money-back guarantee on their POS hardware products — so you should feel empowered to try out their hardware risk-free. Also check to see what level of support they offer (ideally you want free 24/7 support). Some POS providers also offer on-site installation and training on how to use their products.

Lastly — and this may seem obvious — but make sure the POS hardware fulfills the needs of your business. For example, if you operate a restaurant, you need a kitchen printer. Make sure your POS provider either offers one or integrates with popular kitchen printer brands.

Products

The POS hardware products you will need depend on the nature of your business. While not every business requires all these hardware options, most businesses will need at least some of these products:

Credit card reader

Also known as a credit card terminal, this device is what you will use to accept credit and debit card payments. There are three different ways a credit card terminal can take payment: by reading the credit card’s magstripe via swipe, by reading the card’s chip via an EMV (Europay, Mastercard, Visa) reader or by using near-field communication (NFC) to accept payments from a virtual wallet like Apple Pay.

Consider how your customers like to pay when selecting a credit card reader. Most people have a card with a magstripe, but some may prefer the more secure EMV payment method. Others don’t carry a credit card at all and use only a digital wallet to pay for products.

There are other features to consider when picking out your credit card reader, such as the ability to print or email receipts, suggest tip amounts or pay with a virtual terminal (punch in credit card information on the credit card reader’s pin pad). You may also want a credit card reader that works in conjunction with your mobile device in order to accept payments on the go.

All of these products are available on the market — it’s just a matter of picking the ones that satisfy your business's needs. Some POS providers sell their own proprietary credit card readers (such as Square and PayPal), while others require you to buy one from your payment processor. Credit card reader brands to consider when doing your search are Square, Verifone and Ingenico.

POS terminal

A point-of-sale terminal is also sometimes used to refer to a credit card reader, but it's really the computerized device that the POS software runs on (for old-school POS systems, the cash register is the POS terminal). Typically, your point-of-sale terminal will have an interface that the merchant uses to manage transactions. Some merchants use a desktop computer as their POS terminal, but it is much more common nowadays for an iPad or tablet to be used as the POS terminal. These are often paired with a stand to turn them into a countertop device. Keep in mind that some POS providers build their own proprietary POS terminals, such as the Square Register and Clover Station.

The POS terminal is often one of the most expensive components of a POS hardware kit. You’ll either have to pay the price of an iPad or tablet or the more expensive price tag on a proprietary terminal. Proprietary POS terminals are often more powerful than your typical iPad or tablet. Many come with a better processor and built-in credit card reader, saving you the cost of buying your credit card reader separately. On the other hand, if you use a mobile card reader, your POS terminal becomes your iPhone, with the POS app as your software. This is often the cheapest POS terminal option.

Cash drawer

Most businesses still need to accept cash payments, which means most businesses need a cash drawer. The main thing to consider with a cash drawer is the locking mechanism, as you’ll want something that can’t be broken into. You’ll also want to find a cash drawer that is compatible with your POS software, as it should open every time you complete a cash transaction via a USB or Bluetooth connection. Other considerations are the size of the cash drawer and the number of slots and coin trays. Most POS providers sell cash drawers.

Barcode scanner

Businesses that carry lots of inventory need a barcode scanner to help them keep track of stock and expedite the checkout process. Similar to cash drawers, you can have a USB-enabled barcode scanner or a Bluetooth barcode scanner — just make sure it is compatible with your POS software. Most POS providers also sell barcode scanners. Popular barcode scanner brands include Zebra, Motorola and Socket Mobile.

Receipt printers

While many POS providers now offer software that can send a text or email receipt to customers, it’s still necessary to offer a printed receipt option. Like barcode scanners and cash drawers, receipt printers can be connected to compatible POS software via USB or Bluetooth. Most receipt printers use thermal or ink printing. If you operate a food-service business, you may also want to invest in a kitchen printer, which syncs with your POS software to print tickets in the kitchen whenever an order is placed.

Receipt printers (and receipt printing paper) are another common product sold by most POS providers. Popular brands include Star Micronics and Epson.

Miscellaneous

Some additional products are specific to certain types of businesses. If you operate a restaurant, for example, you may also want to invest in a user-facing kiosk, digital menu board or kitchen display system. Most restaurant POS providers sell these items.

Other products that can be considered POS hardware (and are sold by POS hardware vendors) include digital scales, routers, kitchen buzzers, digital menu boards and customer-facing display systems.

Top options

Here are some of the best POS hardware providers on the market. Remember, some of these may require you to use their POS hardware and software together.

Square POS

Square is famous for its mobile credit card reader, which revolutionized the payments industry when it debuted in 2009. Since that time Square has launched a full line of POS hardware that is affordable, well-designed and extremely user-friendly.

Credit card reader options include the Square Reader for magstripe, which new customers receive free when they sign up (additional readers cost $10). There is also the Square Reader for chip ($45), which can accept EMV payments. The most popular option is the Square Reader for contactless and chip, which costs $49 and accepts NFC and EMV payments.

Square’s terminal options are where things get really interesting. Its flagship product is the Square Register, a countertop POS terminal with an attached credit card reader that accepts magstripe, NFC and EMV payments. You also get a customer-facing display and power adapter, plus Square’s lowest payment processing rates (2.5% plus ten cents).

A cheaper option is using an iPad or tablet as your POS terminal — both of which are compatible with Square’s software. Square sells a special stand for iPads that costs $199 and has a built-in magstripe reader. Many merchants pair this with Square’s Bluetooth-enabled EMV and NFC reader.

Lastly, there is the Square Terminal, a handheld POS terminal that is more capable than an iPhone but less so than an iPad. It retails at $299, accepts magstripe, EMV and NFC payments, prints receipts and comes with a discounted payment processing rate of 2.6% plus ten cents.

Of course, you can also buy cash drawers, barcode scanners, receipt printers, routers and even gift cards through Square. Square offers financing on its POS terminals and custom kits for retail, foodservice and beauty and wellness businesses.

Square POS

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on Square's website

Clover POS

Clover provides four unique proprietary POS terminal options. The first is Clover Go, a credit card reader that connects to a device via Bluetooth and can accept magstripe, NFC and EMV payments. The Clover Go works in conjunction with a device running the Clover POS app. Unlike Square, you can also use Clover POS hardware with non-Clover POS software. The Clover Go costs $69.

A more costly device is the Clover Flex — a handheld POS terminal that draws a lot of parallels to the Square Terminal. With it you can accept magstripe, EMV and NFC payments, print receipts and also run POS software. It retails at $449.

If you need a countertop POS terminal, Clover offers the Clover Mini for $599. The Clover Mini is an enclosed monitor with a built-in magstripe, NFC and EMV reader, plus a receipt printer. It also connects with a variety of receipt printers, barcode scanners and cash drawers via Bluetooth.

Lastly there is the Clover Station, Clover’s most complete POS terminal offering. For $1,199, you’ll get all the features in the Clover Mini with a larger display, added security features and a better processor. Additional features include a free cash drawer and a built-in barcode scanner. Like the Square Register, this product comes with a customer-facing display. Plus, all Clover POS hardware products feature a payment processing rate of 2.3% plus ten cents.

Note that Clover offers special bundles for retail and restaurant businesses. Individual hardware items available for purchase include handheld barcode scanners, kitchen printers, label printers, weight scales, PIN debit pads and printer paper.

Toast POS

For businesses in the foodservice industry, Toast offers one of the best POS hardware bundles on the market. Toast offers a branded version of the Elo Touch i-Series 2.0 AiO. The terminal comes attached with a credit card reader that can accept magstripe and EMV payments. You can also choose from three different monitor sizes: 10”, 15” or 22”. These terminals feature a hardwired connection, a top-of-the-line processor and have the ability to function offline. They are built to handle the mayhem of restaurants with heat and water-resistant screens.

Like Clover and Square, Toast sells a proprietary handheld POS terminal. The Toast Go is designed to allow servers to take orders tableside and fire them off to the kitchen with ease. It comes with a built-in magstripe and EMV reader, 40% longer battery life than iPads and is heat and water-resistant.

For fast-casual restaurants, Toast sells a proprietary user-facing kiosk that allows customers to punch in their own orders to be sent to the kitchen. This device also comes with a built-in magstripe and EMV reader and 10”, 15” or 22” monitor sizes. Toast also sells a 10” user-facing kiosk that attaches to a POS terminal and allows a customer to review their order at the counter. There is also a proprietary kitchen display screen that shows the kitchen new tickets as they come in. This tool is also heat and water-resistant and can display in multiple languages.

Toast sells a variety of wireless routers, receipt printers, barcode scanners, digital scales and individual credit card readers that can accept magstripe and EMV payments.

In terms of costs, Toast does not offer specific pricing on individual hardware items, but it does offer pricing on POS hardware bundles. A starter kit costs $450 and features a Toast Go POS terminal. According to Toast, the most popular hardware bundle costs $899 and includes a 10″ POS terminal, flip stand and magstripe card reader. There is also a bundle that costs $1,350 and comes with a 10” terminal, magstripe card reader, receipt printer and cash drawer. Toast also offers installation services and on-site training starting at $499. All hardware comes with 0% financing for 36 months and a two-year warranty.

It’s also worth noting that all Toast hardware is Android-based and the software runs on Android systems. While you can use your own compatible hardware with Toast POS, the company strongly advises using its hardware to prevent a disruption in service.

A version of this article was first published on Fundera, a subsidiary of NerdWallet.