What is a POS Purchase? And Other POS Term Clarifications

What is a POS Purchase? And Other POS Term Clarifications

Editor’s note: POS tech has changed a lot since 2015 when this blog was originally written. Click here to read our most recent blog defining a modern-day POS, its key benefits and some of the advanced featured you should look.


Point of sale systems have been making the lives of retailers, merchants and restaurateurs a lot easier for years. As technology advances, more traditional cash registers have started falling out of favor; new point sale systems make it easier for business owners and their employees to learn and operate a more efficient and useful system that quite simply functions as another employee.

As we move forward, let’s get back to basics and clear up any confusion between the terms POS, POS system and POS purchase.

What’s a POS?

“POS” is an abbreviation for point of sale. A POS or point of sale generally means any location where a sale or transaction may take place. For retailers and restaurateurs, POS traditionally means the area surrounding the cashier or counter where payment is accepted during checkout.

If you look at the bigger picture, a POS or point of sale can easily mean a mall, a market or a city because these are locations where something likely is going to get bought or sold. Point of sale is also referred to as a point of purchase.

What is a POS


What’s a POS System?

A POS System or point of sale system is the term used to describe a system of software and hardware that aid retailers and restaurants with sales, inventory management, analytics, reporting, and employee management. A typical POS System consists of a computer that runs the POS software, a receipt printer, barcode scanner, credit card reader and an on-site server for legacy based point of sale systems. Cloud-based POS systems that run on iPads and other handheld devices don’t need a physical server on-site because everything is accessed, saved and synced online.


What’s the difference between a POS and cash register?

When you want to do more than ring up sales, you know it’s time to move from your cash register to a cloud-based POS system. While a cash register is a great place to store your…well, cash, a POS system acts an additional employee (or several employees) to your business. From helping you manage inventory to tracking customer preferences, managing loyalty programs, offering the tools to create a more personalized customer experience, tracking employee sales performance and giving you the data to run reports that will help guide your business decisions, a POS becomes a key component of any commerce or hospitality business.


What’s a mobile POS (mPOS)?

Bringing your entire business with you wherever you go is only possible when you use a mobile, tablet or iPhone-based POS system. From busting line ups within your store by ringing in sales from the line to showing customers images of additional products and bringing your entire store to a trade show with you, a mobile POS allows a whole new level of management.


How do retail stores benefit from using a POS?

Retailers using a POS system will be able to run reports based on past sales, track employee performance, remember what visitors bought on past visits and ensure that they’re keeping the right stock on their shelves. A POS system saves store owners, bookkeepers and sales staff time by taking care of repetitive tasks and automating manual processes.


How do POS systems work within restaurants?

A restaurant POS accelerates and improves the entire ordering process for servers and guests. Whether using the POS to take orders tableside and send the order directly to the kitchen or bar, creating a self-order station where guests can place their own order or using the POS to ring through orders at a counter, a POS makes running a restaurant business more efficient.


What kind of hardware is typically used with a POS system

A typical POS system consists of a desktop computer, laptop, tablet or smartphone that runs the actual software, a receipt printer, barcode scanner, and an EMV-compliant credit card reader. Restaurants would also use kitchen receipt printers and other restaurant-specific tools.


What’s a POS purchase or POS transaction?

A POS or point of sale purchase is the “point” where a transaction is finalized or the moment where a customer tenders payment in exchange for goods and services. Any form of payment can be used, such as cash, debit cards, credit cards, mobile payments, and even Bitcoin.

In order for a POS purchase to be completed, a PIN number, signature or for newer mobile payment technology, a fingerprint scan usually needs to be authenticated before an authorized transaction can be made. The authentication information from the PIN number or other security features then travels through the ATM networks until it reaches its destination – the issuing bank. At this point, the bank can either authorize it or deny it depending on the transaction type and how much funds are present.

Point of sale system


What does POS mean on a bank statement?

On a bank statement, a POS transaction is one of many labels used to describe the type of sale. The POS label only appears on a bank statement when a debit card is used to complete a transaction. Credit card purchases don’t carry the same label. When you see “POS” under the transaction type in your bank statement, but you don’t own a debit card or haven’t used yours for that purchase, contact your bank immediately because you may be a victim of fraud.

We hope the terms surrounding EPOS are a bit clearer now and you can make a distinction between the different terminologies in play.