We’re hit up for POS recommendations all the time. Since we partner with so many POS companies, we feel we know the space pretty well. And when we do reply to these inquiries (and we reply to every one) we never offer just one POS option. While it would be great to only pass these leads to our POS partners, sometimes we don’t agree with all of what our partners are doing. When their approaches or tactics don’t fit what the customer wants, we don’t recommend our partner. Obviously these partners get miffed, but at least we can look at ourselves in the mirror every morning.
Pursuant to these questions, what attributes would we recommend someone look for in choosing their next POS? Glad you asked…
1.Is your POS company shipping new code often?
For starters, POS is now about software. Yes, we understand most people use POS as a vehicle to capture the payments processing business, but let’s not get ahead of ourselves: POS is fundamentally about software. Has been since 2009. If your POS provider is worried about scoring 40% margins on POS hardware, they’re not a software company. The best way to measure if they’re a software company is to examine the cadence of software updates – whether bug fixes or new features. In software engineering parlance software is built according to “agile” methodologies. While there are nuances in here, best-practice says you should release updates about every 2 weeks.
2. Is your POS company actively investing in a stable API and are integrations financially onerous?
Second, is the POS company investing in a stable API? This should come as no surprise, but the world is about connecting systems to do powerful things. Maybe it’s integrating a reservation tool, booting up an ecommerce platform, or using the latest scheduling software. Whatever the business need, chances are your POS is involved. How will these third party systems communicate with your business? Through a POS API endpoint, of course. Is your POS company investing in a stable API that enables such communication? And further, is the API reasonably economic or more analogous to the type of usury Apple is being sued for in Federal Court? If 30% fees are too high for Apple’s App Store, they’re much too high for a POS provider.
3. How does the POS company work with partners and what solutions do they prefer you source from them?
Third, how does your POS provider view the role of partners in delivering value? No company has ever been able to do everything… Google failed at Google+, Amazon has a history of sizeable failures, and these are arguably the richest, most innovative software companies on the planet. Your POS company is not an exception to this reality. Does your POS believe it will monopolize all the products you can access or is there freedom of choice? A great litmus test is to learn what other “modules” the POS provides and if those modules are simply there to check a box in an RFP, or if they’re a real focus for their business. If the answer is the latter, run away.
4. Does the POS only offer one payments processing option?
Now back to payments processing. Taking cards is a necessary evil. As anyone who has been in any business that accepts cards knows, payments processing is intentionally nebulous and very much crooked. This is an unfortunate truth. Given the history of payments processing and the pain of replacing a POS system – which is similar to a major operation – doesn’t it make sense to choose a POS that offers payments flexibility? In our view this is simply a no-no: you should never opt for a POS that only offers one payments option. If the POS company starts screwing you on rates (which just about every merchant acquirer does), what’s your recourse? You really want to rip out that POS? Just say no to drugs.
5. Does the POS boast “Free POS”?
Fifth, the POS company should never tell you they offer “Free POS”. This is a sham. Nothing in life is free… if you believe otherwise you deserve what’s coming to you. A responsible POS company should explain how “Free POS” is a loan, and the effective APR you’re paying on that loan. Are the rates higher than you would otherwise secure from a bank? We’d bet the “Free POS” variety are double those from the bank. Use our POS calculator and find out for yourself. If the POS can’t openly walk through the math of how much your system will cost upfront AND over the lifetime you care to own it, then ditch them.
6. How does the POS company handle their mistakes?
The sixth characteristic is something you should expect from anyone you do business with: how do they act when they’ve screwed up? Do they blame someone else? Refuse to admit fault? Never ever return your call or email? This says a lot about the culture and quality of the people you’re getting in bed with. Since merchants tend to own POS systems much longer than they should, do you want to be married to Charles Manson for the next decade?
7. What does the POS company do with your data?
Next, what is the POS company doing with the transaction data on your system? Cloud data storage is cheap and any POS worth its salt should be replicating the data up to the cloud at a minimum. Some newer systems do this automatically, but has an older system invested in this necessity? Once your data is up to the cloud, what are they doing with it? Are they finding partners to create more value for you? Are they simply monetizing it without giving you anything in return? We’re strong believers that a POS company absolutely should have the data rights to your transactions. Why? Because there’s nobody with more alignment in finding value in the data than your POS partner. But hold their feet to the fire on the value they are providing for this high privilege.
8. Does the POS offer offline and online capabilities?
In the early days of cloud POS the POS companies were writing directly to the cloud. When the internet failed, so too did your POS. Many of the cloud POS providers have gotten smarter about this and have invested engineering resources to make sure your POS works offline. But how well does it work offline? Can you move tickets between registers in an offline environment? Operate offline for weeks without issue? Like moving data to the cloud from a legacy POS, cloud POS needs to answer questions for redundancy.
We hope this is a useful list to start with. You should demand that your POS company fully and honestly answer these questions, and if they won’t you can always reach out to us for our unfiltered opinion.
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