The backbone of every retail company is point-of-sale (POS) software. It allows businesses to accept consumer payments in return for the goods they purchase. However, the typical POS device costs between $500 and $3,000 per station to own a point-of-sale system, which can be prohibitively expensive for a startup or a small business on a tight budget.
Fortunately, today's companies have various choices, including leasing equipment and getting the expense built into your monthly charge. However, before you make a final decision, make sure you give enough considerations and find the right option for your specific situation. Here is everything you need to know about the 2 main choices available to have a point-of-sale system - own and lease.
Why should you lease POS hardware?
One of the most compelling factors for businesses to lease is the low cost. For a small company that is just getting started, paying a small monthly charge is better than paying a significant one-time fee. You'll also benefit from leasing because you can claim the sum you paid last year, rather than having to amortize it over many years as for a purchased system.
Another advantage of leased equipment is that it can keep you up to date with the latest technology advances. Many retailers with an existing lease discovered that the upgrade was included in their lease agreement for free. However, some leaseholders found that their provider could not upgrade, leaving them helpless and with no other options. Therefore, it is beneficial for businesses to check the ability to upgrade before signing a lease contract.
What are the major problems in point-of-sale lending?
Meanwhile, another way to have a POS system is to lend it from a provider. This activity is based on the concept of “buy now, pay later” where you can get the system first and pay for it over a certain period of time. Although point-of-sale lending can be beneficial for those who are strapped for cash, the interest rates can be as high as 30%. Moreover, retailers can easily overspend. Therefore, point-of-sale lending can considerably add up to your loan bills.
Why should you own your POS?
Due to the high cost of POS hardware, many companies avoid buying it. However, this choice will save money throughout your company's relationship with a credit card processing company.
With leased equipment, you will be forced to sign a long-term contract or pay a termination fee, while other companies that offer a purchase option will allow you to cancel at any time. Unlike a lease agreement, if you buy equipment that doesn't perform as well as you expect, you will be able to return it.
Businesses who can save enough money upfront to buy POS hardware can be better off in the long run, so that they may avoid a higher monthly charge. You will be able to take your terminals to another processing services provider once you own them, depending on whether your equipment is compatible with their program. If you lease, you'll be forced to either buy new equipment or find another provider that will rent to you at a reasonable rate.
Conclusion: Some POS systems you can have a look at
From the points above, it is advisable that you choose a suitable way of having a POS system depending on the specific situation. Lease and own are the most two recommended options: if you have a tight budget, a POS lease might be for you. But if you have more budget, require more complex customization and would like to go in the long run, owning a POS system might be better.
There are various point-of-sale providers with different options in the market. Some leading POS systems are ConnectPOS, Lightspeed, Shopify POS and Vend. All of these providers have options from which you can choose depending on the specific needs of your businesses.
We hope that this article can help you to decide on the appropriate form of having a POS system. ConnectPOS is a point-of-sale provider that has multiple options for retailers to choose from. Contact us if you have any questions.