Shopping is not what it was five years ago. Today, we can purchase our groceries online. We can order food from a restaurant off of our phone and have it delivered to us in the comfort of our homes. We can waive our Apple watches over a payment processor, completing the purchase quickly and easily. In fact, the reality is that we’re just at the beginning of the Fourth Industrial Revolution, with artificial intelligence, the cloud, and automation impacting our daily lives.
How do business owners adapt to new forms of payment and changing customer demands? One way to keep up with changing payment methods is to implement a new point of sale (POS) system.
Let’s learn more about how to streamline your business while incorporating cutting-edge technology, keeping your customers coming back for more.
What is a POS system?
A POS system combines both hardware and software, allowing business owners to seamlessly process sales. With the right POS software, you’ll get the ability to track your employees’ time, see where you stand with your inventory, and what products or services your customers prefer.
Meanwhile, your hardware should include an internet-enabled payment device that accepts credit cards and runs your software. If you own a brick-and-mortar, you can incorporate your credit card reader, a cash drawer, and a receipt printer. If you take payments online, you can use a cloud-based point of sale system, requiring no hardware. In other words, your POS system should be compatible with the way you do business.
How does a POS system work?
Essentially, your POS system allows you to process transactions while handling several back-office tasks, such as employee or inventory management, while producing real-time reports or analytics for you, giving you valuable insights into your business. But, before you install or upgrade your POS system, you first must identify what time of solution you need.
For example, are you a brick-and-mortar merchant? Do you have an online store? What payments do you want to accept? How do you want to offer receipts? Do you want to sell gift cards or offer a customer loyalty program? Do you want to track your inventory while receiving reports on what your customers prefer (or don’t prefer)? By understanding how you operate your business, you can identify a valuable list of needs for your POS system.
Can POS systems process credit cards?
When a POS system runs transactions, that includes processing credit and debit card payments. Many existing POS systems run traditional magstripe credit cards, but now with new forms of payments, such as e-wallets, you should consider offering various payment methods. By doing so, you’re not only keeping up with technological advances, but you will also appeal to millennials and Gen Z.
For example, Gen Z, the youngest of the generations with buying power, currently holds $44 billion in purchasing power, according to Forbes. And the oldest of this generation is only 22. It’s time to look beyond traditional payment options and cater to the newest generation of customers.
Now, let’s look at some payment processing options you can incorporate into your POS system.
Magstripe payments are a traditional payment method, giving customers the ability to swipe their card in the store. Depending on your business, this may be all you need. However, as we discussed above, there are important reasons to diversify your payment options.
Chip card payments.
Chip card payments have become more common over the past few years. A chip card contains an embedded microchip within the card, providing advanced security measures. Unlike traditional magstripe cards, chip card payments are more secure, giving both merchants and consumers peace of mind.
NFC contactless payments.
Contactless payments include Apple Pay, Google Pay, or digital wallets. These types of payments allow the customer to waive their card (or other payment methods) over the card reader without contact. This technology is known as near-field communication (NFC), where the card reader can process the sale when the payment method is within range. Although this is a newer payment form, undoubtedly it will become more popular as more people adopt currently available technology.
With more people shopping online, we would be remiss if we didn’t mention online payments. If you run an online store, whether as a stand-alone option or in conjunction with your brick-and-mortar store, you should consider the technology needed to process transactions that don’t occur in-person.
Online payments require different technology than in-store processing systems. Online payment processors don’t need the same hardware as a brick-and-mortar system, but they do demand a secure payment gateway.
So, what’s a payment gateway? It’s an essential piece of the online credit card processing system. When a customer buys an item on your online store, the customer’s credit or debit card is processed at checkout. Once the credit card information is captured, it’s then sent over a secure payment gateway, which forwards the information to your merchant bank and then to the issuing credit card company.
Through the payment gateway, the customer’s credit card company sends authorization or denial codes back to you, letting you know if the customer can complete the purchase. Although payment gateways provide standard encryption security measures such as tokenization, many payment gateways also offer additional security features such as fraud protection, giving you extra security layers. With payment gateways, your customers can shop online at any time of the day, any day of the year.
Are POS systems secure?
Having secure POS systems in place is absolutely critical to the success of your business. One way to do this is to ensure that your POS system is PCI-compliant. In 2004, the major credit card companies, including Mastercard, Visa, and American Express, created the Payment Card Industry Security Council, which in turn established the Payment Card Industry Data Security Standards (PCI-DSS). These security standards include rules on fraud prevention, chargebacks, and identity theft, helping merchants keep their customers’ payment information secure while emboldening their reputations.
Any business offering credit or debit card payments, including for in-store or online purchasing, must be PCI-compliant. These standards not only apply to the transmission of sensitive payment information but also to the storage of that information. PCI compliance mandates ongoing compliance as the protection of payment information is not a one-time event. By offering PCI-compliant payment processing, not only do business owners reduce the risk of payment fraud, but they also improve their credibility as a business by ensuring the security of customer payments.
Know what to look for when hiring a vendor.
Offering a secure, updated point of sale system is critical to the growth and success of your business. By teaming up with an experienced, reputable POS system partner, you can be confident that you’re offering your customers a secure payment system — whether online or in the store — while giving you real-time data, helping you scale your business.
At North American Bancard, we can help guide you through the setting up of a new POS system. Our equipment is alway PCI-compliant and we even have a brand-new compliance program, PCI Plus, coming soon. We offer low processing fees and don’t require long-term contracts. We help make it easy to provide your customers with in-store or online frictionless transactions that they’ve come to expect. Further, we integrate our systems with accounting and inventory software allowing you to save both time and money while gaining valuable insight into your business.
We’ll help you customize your POS system to your specific business. To set up a consultation, contact us here or give us a call at 877.840.1952.