CLOUD POS vs TRADITIONAL POS: WHAT’S THE BEST?

Are you confused between Cloud POS and Traditional POS? Don’t worry this guide will help you understand the key advantages and disadvantages of both so that you can better analyze which one to choose for your business model. 

WHAT IS CLOUD POS?

Cloud POS (Point of Sale) is software that allows businesses to manage sales, inventory, and other operations through an online platform, accessed through the Internet.

 It is hosted on cloud servers, as opposed to on-premise hardware solutions, and allows businesses to process transactions, manage inventory, analyze sales data, create reports, and more. This technology enables retailers to manage their businesses more efficiently, with access to real-time data and seamless connectivity across multiple devices and locations. 

Cloud POS is a subscription-based service, which means businesses pay a monthly fee to access the software and regular updates. It is becoming an increasingly popular solution for small and medium-sized businesses looking for an affordable, scalable point-of-sale system.

ADVANTAGES OF CLOUD POS

• Flexibility and Scalability: Cloud POS systems offer flexible and scalable solutions for businesses of any size. You only need to pay for the features you need and can easily add more as your business grows or changes

• Lower Costs: With cloud POS systems, there are no upfront hardware costs, as these systems are hosted on remote servers. You can also save on maintenance costs as the provider takes care of updates and patches.

• Improved Security: Cloud POS systems are equipped with advanced security features like data encryption, two-factor authentication, and regular backups, keeping your business data secure and protected from unauthorized access.

• Real-time Data Access: As cloud POS systems run online, you can access your business data in real time from any device with an internet connection. This feature enables you to manage your business operations remotely, reducing the need for physical presence.

• Training and Support: Proper training and support are not an issue with POS systems. The reason being with the internet connectivity anybody can access the remote system, check the issue, and fix it without actually waiting for a long time. Hence, the issue can be immediately fixed.

• Integration with other Business Applications: Cloud POS systems can integrate with third-party applications like accounting software, inventory management, and CRM systems, streamlining business processes and reducing manual data entry.

• User-Friendly Interface: Cloud POS systems have a user-friendly interface that requires minimal training, speeding up checkout times and reducing errors in the sales process.

• Better Customer Experience: Cloud POS systems offer numerous features like mobile payments, online ordering, and loyalty programs, providing customers with a seamless and convenient shopping experience.

DISADVANTAGES OF CLOUD POS

• Internet connectivity dependency: Cloud POS is heavily reliant on 4G or 5G internet connectivity. If the internet connection completely goes down or is weak, business operations will be affected.

• Potential Data Privacy and Security Risks: With multiple users accessing the platform, there is a risk of unauthorized access to the system and data breaches. However, if you use secured cloud servers like AWS, Azure, and Google Cloud, this risk can be minimized. 

• Cost: Cloud POS systems require a subscription or monthly fees, which can add up, especially for businesses that have multiple points of sale.

• Limited Offline Functionality: In the event of an internet outage, cloud POS systems may or may not be able to operate offline. This can result in a loss of business and revenue. However, some of the cloud systems also work offline in case of being out of the internet, later it synchronizes the data once the internet connection is restored. 

• Potential Dependency on Third-Party Providers: Businesses may be reliant on third-party providers for updates, system maintenance, and technical support, which can result in downtime if issues occur with the provider.

WHAT IS TRADITIONAL POS?

A traditional POS (Point of Sale) system is a hardware and software-based system used for managing sales transactions in a retail or hospitality business. It typically includes a computer, a cash drawer, a receipt printer, and a barcode scanner. The software used in a traditional POS system allows businesses to track sales, manage inventory, process payments, and generate reports. These systems are often used in brick-and-mortar stores and have been used for decades.

ADVANTAGES OF TRADITIONAL POS

• Reliability: When it comes to reliability and stability, traditional POS systems are the king. They are designed to perform consistently and without interruption, which allows businesses to maintain a steady workflow.

• Security: Traditional POS systems offer high levels of security that protect sensitive customer information and prevent data breaches. These systems are designed with robust encryption and authentication protocols that ensure safe transactions.

• Compatibility: Traditional POS systems are compatible with a wide range of hardware and software, making them flexible and scalable. They can integrate with other business applications like inventory management, accounting, and marketing tools.

• Offline Operation: Unlike cloud-based POS systems, traditional POS systems can operate offline without an internet connection. This allows businesses to continue processing transactions even when there is no internet connectivity

• Availability of Support: Traditional POS systems have been in use for many years and there is a large ecosystem of vendors who offer support, maintenance, and upgrades. This ensures that businesses always have access to the help they need.

• Customization: Traditional POS systems can be customized to meet the specific needs of a business. This means that businesses can tailor the system to their unique workflows, processes, and requirements.

DISADVANTAGES OF TRADITIONAL POS

Limited Mobility: Traditional POS systems are usually bulky and tethered to one location, which makes them less mobile and inaccessible for employees when they need to move around.

High Costs: Traditional POS systems are often expensive and require constant maintenance and upgrading. This can run up a significant cost for businesses, especially small ones.

Prone to Malfunction: Traditional POS systems are not as reliable as modern POS systems. Older hardware is more prone to hardware and software failures that can cause disruptions to the business.

Security Risks: Traditional POS systems are more vulnerable to security breaches, including data breaches and identity theft. These systems store sensitive data, including customer credit card information, which makes them an attractive target for hackers.

Limited Features: Traditional POS systems have very few features, which makes it difficult for businesses to keep up with changing technology and customer needs. Modern POS systems offer more advanced features that allow businesses to customize their point-of-sale system.

TRADITIONAL POS

• A traditional POS system is a locally-installed software that is installed on a computer terminal or server

• All the data pertaining to sales transactions, inventory, customer data, etc. is stored on the local hard drive or server.

• Users access the system from the computer terminal or server where the software is installed

• Data backup and security measures need to be implemented manually

• Software updates and upgrades may need to be manually installed and can sometimes require hardware upgrades

SUMMING UP: WHICH ONE IS BETTER?

TRADITIONAL POS: ADVANTAGES

• Generally more reliable, as they do not depend on an internet connection.
• Can often offer more advanced features than cloud POS systems.
• Easier to control and customize.

DISADVANTAGES

• Inflexible, as they are hardware-based and cannot be easily modified.
• Generally more expensive than cloud POS systems, as they require the purchase of additional hardware.
• Requires more maintenance, as hardware may break or become outdated.

CLOUD POS: ADVANTAGES

• Generally more affordable, as there is no need to purchase additional hardware, and software updates are typically included.
• Offers more flexibility, as it can be accessed from anywhere with an internet connection.
• User-friendly onboarding is generally easier than traditional POS systems

DISADVANTAGES

• Dependence on a stable internet connection.
• The risk of cloud storage vulnerability, e.g. cloud hacks and phishing.
• Transaction processing is reliant on allowing third parties to access your account information.

In a nutshell, Some businesses will benefit more from a traditional POS, while others may benefit more from a cloud POS. It is always best to do your research and choose the system that will work best for your business.  

Neither option is inherently better – it depends on your specific business needs and priorities. However, if you have to choose one Cloud POS is definitely a much better, and more convenient option considering the current market trends.