Traditional POS vs Cloud-based POS

When it comes to choosing a good Point of Sale (POS) system, it can be great stress because it’s a one-time thing. You want to make sure you choose the right one since a good POS system is an essential tool for business owners to increase sales, manage inventory, and build a customer base. Not only are there many brands to choose from, but you must first decide between a traditional and cloud-based POS system.

Not sure what the difference is and which is better? Let us help you!

A traditional POS, also known as legacy POS, runs on closed networks and the data is stored on local servers. A simple analogy of this is storing your personal data only in your computer at home, which cannot be accessed from anywhere else.

Mobile POS, also called cloud-based POS or Software as a Service POS (SaaS-POS), is web-based and runs on a cloud service, meaning that the data is stored online. Following the analogy as above, this would be like storing your data in a place such as Google Drive or Dropbox, which can be shared with others and accessed from anywhere with internet.

There are many comparisons when it comes to these two types of POS:

Data accessibility

Traditional:
The data can only be accessed on-site, meaning that the owner or manager has to be physically present in their business facility to make any changes to the menu or items, to check employee clock-ins, to see sales report, etc.

Cloud:
The data can be accessed from anywhere, anytime. The owner or manager can monitor all of the reporting in real-time from anywhere with internet access using any device (a desktop, tablet, mobile, or laptop). They can also make any changes online, giving remote accessibility and eliminating the need to be there in person to do everything.

Data Loss Risk

Traditional:
Since all the data is stored on local servers and run on a closed internal network, there is a risk of losing everything if the system crashes or encounters a bug.

Cloud:
Since all the data is stored online on remote servers, the risk of losing data is minimized. Even if the system crashes, the data remains safe because they are backed up automatically in the cloud, and can be restored easily.

Cost

Traditional: 
Traditional POS systems usually have high upfront costs. They also require a maintenance fee because the software needs to be updated manually on-site, which requires additional labor and time. Also, in case the system crashes, the cost of re-installation can be expensive.

Cloud:
Cloud-based POS is often cheaper because the installation is not as complex. It usually has little to no upfront costs and follows a subscription model of a monthly or yearly fee. The software is also updated automatically by the service providers, in which the cost is already included in the monthly or yearly charges. However, the cost of the subscription can differ depending on the size of the business; for example, the number of stores, number of employees, and number of devices can affect the pricing, thus making it just as expensive as the traditional POS in the long run.

There are also many free cloud-based POS apps that can be downloaded to a device with optional add-ons or upgrades at a low cost, so all you need to pay is the hardware cost (devices, scanners, cash drawers, printers, etc.) and the add-ons if you wish.

Frequent updates

Traditional: 
For many traditional systems, the server needs to be updated manually on-site, which results in fewer updates (often once a year at most).

Cloud: 
For cloud-based systems, the provider implements the updates automatically and remotely, meaning there is no need for on-site visits to update the system. They usually update more frequently than the traditional systems, and it updates in real-time, ensuring that you are always utilizing the current version of the software.

Internet Dependency

Traditional: 
Traditional systems do not rely on the internet, so even if there is no internet, it can continue to run smoothly and efficiently without affecting the service.

Cloud: 
Contrary to the traditional systems, cloud-based systems are heavily dependent on the internet, so if the internet connection is poor or lost, this can affect the service greatly. However, some cloud-based systems have offline capabilities, allowing you to continue to make sales and run the business as usual even without internet. The data can be synced later when it is connected to the internet again.

Hardware

Traditional:
The hardware of the traditional system is usually quite big, bulky, and heavy.The most common size of the traditional POS screen is 15 inches. Some people see this as an advantage because it prevents theft, but many see it as a disadvantage as it is not portable.

Cloud:
Cloud-based POS, unlike the traditional POS, uses portable devices, such as tablets and mobile phones. This makes it easier to carry it around anywhere. However, most devices have a short battery life and must be constantly connected to the charger.

Integrated systems

Traditional: 
For traditional POS systems, it is often difficult to integrate new modules, and features, and updates. This makes it harder to customize the system, and the business has to use it as is.

Cloud: 
With the cloud-based POS system, it is possible to fully integrate higher functionality modules and connect with third-party software programs to customize the POS according to the business’s needs. These modules include loyalty programs, online ordering, CRM, inventory management, accounting, and many more.

The needs of each business are different, but each business should have a POS system that matches their requirements and values. I hope these comparisons can help you better understand the differences and find the right POS for you!