What is a point-of-sale system (POS)?

No one wants to wait in line. So it’s likely not a surprise that “retailers are losing a collective $37.7 billion in potential sales due to long checkout lines,” according to a recent Ayden report.

That number includes giving up “$15.8 billion in potential sales to their competitors, and the industry itself forfeited $21.9 billion after customers opted against a lengthy wait” abandoning their purchases altogether.

Now, more than ever, it’s essential to use the right point-of-sale (POS) system for your store, restaurant, or pop-up to keep your checkout lines moving and to ensure your customers’ transactions are fast and secure.

Your POS system must also enable them to pay the way they want, wherever they are. Read on to learn what is a POS system and how to select the right one.

Table of contents:

What does point-of-sale (POS) mean?

Generally speaking, a POS means a location where customers pay you in exchange for your goods and services. To complete the transaction in a physical retail location or on the go at an event, pop-up, or farmer’s market, you’ll need a payment device that’s hooked up to a POS system.

POS system definition

Point-of-sale systems typically include the hardware needed to scan a product bar code, QR code, or manually input the product price. They also come with the software to calculate taxes and securely process the payment.

GoDaddy’s POS system, for example, features an easy, fast and encrypted payment experience that helps small business owners unify their selling across multiple points of sale — in-store, in-person, and online.

It seamlessly integrates with your GoDaddy Online Store, so you can easily organize and access your online and in-store sales data in one place via a dashboard.

That’ll save you time and money that could be better spent dealing with your customers — who can also buy online and pick up in-store or book online and pay in-person using our POS system.

How does the POS system connect to my payment provider?

Your point-of-sale system is the middle man between the credit or debit card merchant and your financial institution. So as a payment from a sale is processed through your POS, it must first be verified with your customer’s bank (for debit cards) or with their credit card merchant before the transaction can be completed. Once the payment is approved, the POS system will then work with your bank to make sure that money is deposited into your account as soon as possible.

Read our quick reference guide to ecommerce payment processing for more details.

What forms of payment does a POS take?

Your POS system should process all major credit and debit card transactions and offer additional ways for customers to pay via a digital wallet on their phones.

For example, GoDaddy Payments and point-of-sale system accept all major forms of payment, including Visa, Mastercard, American Express, and Discover, across all of our devices and solutions — for online, in-store, and in-person payments. Our dual screen GoDaddy Smart Terminal also accepts contactless payments via a customer’s phone with Apple Pay and Google Pay.

Many shoppers adopted this payment method during the global pandemic and plan to continue using it in the future. If you sell on the go at a local farmer’s market, pop-up, or event, you can use a card reader like GoDaddy’s portable Card Reader with a docking station for all of your card and contactless payments.

Be sure to get a card reader or POS terminal with a battery that lasts all day and enables your customers to tap, dip and swipe to process your payments anywhere you sell.

To process payments via the GoDaddy Card Reader, and manage your online orders from anywhere, you can download our app for IOS or Android. Then connect your preferred card reader to accept credit and debit cards, and record cash payments on your phone.

What are some common POS system features?

Here’s everything you’ll need from a POS system to start selling quickly, easily, and securely across all of your sales channels.

POS systems hardware overview

GoDaddy’s sleek and powerful Smart Terminal (or POS device) comes ready out of the box with everything built-in for a convenient in-person checkout process. It has a one-year limited warranty and a 30-day refund to ensure you’re completely satisfied with your product.

GoDaddy’s Smart Terminal POS system hardware includes:

  • GoDaddy Payments processing of all major credit and debit cards
  • Dual screens — a dedicated screen for you and one for your customers
  • A paper receipt printer
  • A barcode scanner to quickly scan product UPCs and QR codes
  • End-to-end encryption with strict payment cards industry (PCI) security compliance
  • Fast and easy setup
  • Lightweight enough for in-store mobility
  • The lowest payment processing fees in the industry, with no contracts or hidden fees
  • Payouts as fast as the next business day

GoDaddy Payment receipts are customizable and enable your customers to opt for email or text receipts (instead of printing).

You can also opt to use our Card Reader with docking station for contactless payments.

GoDaddy card reader

GoDaddy’s Card Reader features:

  • GoDaddy Payments processing with all major credit and debit cards
  • A pocket-sized design for easy mobility
  • An all-day battery life that comes with a charging docking station
  • Customers can tap, dip and swipe to process payments from anywhere
  • Contactless payment processing with Apple Pay and Google Pay
  • Can set it on a tabletop to go hands-free and take care of other things

POS system software overview

Both GoDaddy POS hardware solutions mentioned above seamlessly integrate with our GoDaddy Payments processing software.

You can also configure your new Smart Terminal online before your shipment arrives. For example, you can add your product listings in advance, upload company logos, and customize printable receipts.

Your device is then ready to accept transactions as soon as it’s out of the box and connected to your Wi-Fi.


GoDaddy’s POS payment processing software seamlessly integrates with GoDaddy’s Online Store to unify in-person and online sales using our new Commerce Hub. The benefit of a service like GoDaddy Payments is that it is scalable and versatile. So you can easily manage and track every sale you make online or in-store, rather than using software that can only be installed locally on your device and does not integrate with other payment data.

It comes with a dashboard that keeps you organized and enables you to quickly track your inventory and view metrics on how your small business is performing — with the help of visual graphs to map your sales and orders.

The dashboard also lets you compare the performance of sales across all the places your business sells — giving you access to in-person sales and online orders from Amazon to Google Shopping, Instagram, Facebook and more.

How can I use customer data rendered from a POS system?

Once you start collecting sales data with your integrated POS system, you can analyze it to optimize various business functions.

Here are some common ones to consider:

  1. Monitor your inventory and stock levels: So you know when to replenish inventory and learn which items are selling better than others.
  2. Profile customer segments for future marketing opportunities: You can segment them into lists for email marketing or targeted ads in the future.
  3. Evaluate individual sales rep performances: To track commissions and for future performance reviews and promotions.
  4. Compare sales data across all of your platforms (e.g., online, in-store, social media, and email) to find trends in the most popular items or product categories sold in a specific period. Or to inform future product launches and seasonal sales promotions.
  5. Track how customers engage with your small business: To find out what times of the day of the week they’re more likely to buy, identify trends in consumer spending habits (e.g., average order values and products they commonly buy together), and the frequency of repeat purchases from your top customers.

Tracking all of this data helps improve your overall customer shopping experience. You can also give your best customers more of what they want through exclusive sales on their favorite items or by inviting them to join a loyalty program for future discounts and rewards.

For additional insights and ideas, read “8 ways to use your point-of-sale data to remarket to customers.”

Do I need a POS system?

Not all small businesses need to invest in POS systems to start processing customer credit card transactions.

Pros and cons of using POS systems

Here are some pros and cons to help you decide whether or not to invest in a POS system at this time.

POS System Pros:

POS System Cons:

  • Some POS systems providers have hidden fees or long-term contracts
  • Some POS systems are hardware-dependent
  • Many require you to sell while a customer is present
  • Some POS systems are less reliable than others and harder to set up to start selling right away
  • A POS system might not fit your current business model or clientele needs
  • Quality of customer service varies between POS systems

Who can benefit from using a POS system?

Small businesses with a large number of SKUs, as well as businesses that sell in a physical retail location, pop-up, or farmer’s market, are the most likely to use POS systems with a Smart Terminal or Card Reader.

Some examples include:

  • Boutique managers who sell unique, high-valued items
  • Bodega owners who sell everything under the sun
  • Bakeries, coffee shops, or tea shops that might sell premade taxed food items, along with dry goods or kitchenware
  • Restaurant or food truck owners who need wireless solutions
  • Pop up shops or events where retailers can promote and sell items on the go

Other ways to process payments without a POS system

If you’re on the fence about investing in a POS system, you can also consider using a Virtual Terminal or Pay Link solution instead.

What is a Virtual Terminal?

You don’t need to purchase any extra hardware to use GoDaddy’s Virtual Terminal. It’s a secure way to get paid whenever your customers aren’t standing in front of you.

GoDaddy Virtual Terminal

Virtual Terminal enables you to transform your smartphone, tablet, or computer into a credit card terminal, and no card reader is needed. With your mobile device and internet connection, simply sign in to your GoDaddy account and open Virtual Terminal on your Payments dashboard.

Then key in your customer’s credit card information — taken over the phone or via text or email — and confirm the charge. The payment is processed quickly and securely, and you’ll receive your funds by the next business day. Many small businesses that offer food delivery, or book appointments on the phone in advance, like this payment option.

What are Pay Links?

In cases where your customers prefer to input their credit card information themselves, you can also create an Online Pay Link via your GoDaddy account. Then, share it with them through their preferred communication channel — via text message, social media, email, or even in-person.

Additionally, you can transform an Online Pay Link into a scannable QR code with one click. Then post or print it anywhere to let customers quickly scan and pay the way they prefer.

GoDaddy Pay links

GoDaddy Pay Link Payments are processed quickly and securely as with the Virtual Terminal, and funds arrive in your account as early as the next business day.

Neither of these solutions requires you to have an ecommerce website.


However, if you’re interested in digital payment options for your website, watch the video below.

Evaluating your POS system options

If you’ve decided to invest in a POS system, but don’t know where to start, let’s discuss some options.

Different types of retail POS systems

As you do your research, you’ll discover that many retailers will choose between a legacy POS system and a cloud-based POS system.

Legacy POS Systems

Traditional POS machines and systems store your sales data on local servers in a closed internal network. However, this scenario can make you vulnerable to system crashes and technical issues — leading to long checkout delays and angry customers. Many grocery stores and big-box stores might still be using these legacy systems.

Cloud-based POS systems

These newer POS machines and systems can process credit and debit card transactions anywhere and store your sales data in the cloud. If there is an online technical problem, most cloud-based systems also work offline to save you from lost sales and customers. Cloud-based systems work with mobile-optimized POS machines to process customer payments however they want and wherever you interact with them.

Additionally, you can view and analyze your sales data from anywhere in real-time via a cloud-based dashboard across all of your sales channels.

Cloud-based POS systems are also often easier to use and more affordable.

GoDaddy’s Virtual Terminal and Card Reader are just two of many cloud-based POS system options, with the lowest payment processing fees per in-person transaction among leading providers in the industry. GoDaddy also offers 24/7 customer support to help you troubleshoot any issues you may face. For more help in making this important purchase decision, watch: How to choose the right POS system.

How much does a POS system cost?

Finally, let’s look at how much you’ll need to invest in a good POS system.

According to MerchantMaverick.com, POS systems can range in cost from $0 to $1,700 for your POS hardware and $0 to $300/month for the software (per terminal). Some companies offer free POS software, and some even include free POS hardware.

These costs are dependent on:

  • The number of registers you’ll need: Additional registers may come at a discount if you’re buying in high volume
  • Your inventory size: Managing a large number of SKUs will sometimes cost more
  • Employee numbers: Some POS systems charge for each employee in the system
  • Industry specificity: For example, it may cost more to use some restaurant POS systems, which need to integrate a kitchen cash register with hand-held restaurant POS devices
  • Add-on features: There may be an additional monthly cost for adding gift cards or loyalty programs to your POS system

GoDaddy charges $249 for the Smart Terminal, and it comes with GoDaddy Payments software built into the cost. We also offer a one-year warranty and a 30-day refund, with free two-day shipping to get you up and running quickly.

The GoDaddy Card Reader is $49 and comes with a charging dock and free two-day shipping. It also integrates with the GoDaddy Payments app for free, which you can download for iOS and Android.

On top of the hardware and software costs, you also need to factor in the fees you’ll need to pay per in-person transaction. The Motley Fool reports that the average payment processing fees for credit card payments can range from 2.9% + $0.30 for platforms like Square and Stripe, all the way up to 3.49% + $0.49 for PayPal.

GoDaddy Payments offers the lowest fees per in-person transaction (2.3% + $0.30) in the industry. There are no long-term contracts or monthly minimums and no unexpected fees, either.

Most GoDaddy customers can set up GoDaddy Payments in minutes, and you’ll get paid as early as the next business day. And if you have any questions, our customer service team is available 24/7 to help.

Finding a versatile and transparent POS solution

Now that you know what is a POS system, and how it works, take the time to carefully evaluate your options.

You don’t want any surprises when you receive the hardware and find out that it doesn’t integrate with your online system. Or that the transaction fees are steeper than you anticipated.

Look for a scalable and integrated POS software solution that lets you sell wherever your customers are and enables your customers to pay the way they want.

To learn more about GoDaddy Payments and credit card processing, read: How to accept credit card payments in-store and online.

Image by: sofiacarhair.com

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