Point of sale (POS) is the place and system where a customer completes a purchase: the checkout counter, till software and card terminal that together record the sale and take payment. In payments the term usually means in-person, card-present transactions. The software holds catalogue, prices, tax rules, staff logins and stock; the hardware adds a scanner, printer, cash drawer and payment terminal, technically the point of interaction. Integrated setups pass the amount to the terminal automatically, while standalone terminals need it keyed twice. Authorization runs through the acquirer and card network to the issuer, and funds usually settle the next business day. EMV chip cryptograms make card-present payments cheaper and safer, and POS integrations drive merchant acquisition for acquirers.
What a POS system is made of
A modern POS combines software and hardware. The software holds the product catalogue, prices, tax rules, discounts, staff logins and stock levels, and increasingly runs in the cloud on a tablet. The hardware includes a screen, barcode scanner, receipt printer, cash drawer and a payment terminal. Retail and hospitality POS systems differ mainly in software: restaurants need table maps, split bills and kitchen tickets.
How does a POS system work
A cashier scans three items, the software totals €42.50 including VAT and sends the amount to the payment terminal. The terminal, technically the point of interaction (POI), reads the card by chip or tap. The POS then records the sale, deducts stock and prints the receipt once the payment is approved. Integrated setups pass the amount automatically; standalone terminals need the cashier to key it in twice, which invites errors.
POS payment processing explained
Behind the terminal, the authorization request goes to the merchant's acquirer, across the card network to the issuing bank, which checks funds and fraud signals and replies within a couple of seconds. At the end of the day the terminal closes its batch, and the acquirer settles funds to the merchant, usually on the next business day, minus fees.
Card-present payments are cheaper and safer than online ones. The chip generates a unique cryptogram per transaction, which makes counterfeit cards far less useful, and liability for counterfeit fraud shifts to whichever party did not support EMV. In the EU, the Interchange Fee Regulation caps consumer card interchange at 0.2% for debit and 0.3% for credit, and those caps apply equally to in-store transactions.
From countertop terminals to SoftPOS
Mobile POS (MPOS) uses a small reader paired with a phone. SoftPOS, or tap to pay on phone, removes the reader entirely and accepts contactless cards on an NFC-enabled Android phone or iPhone. It cuts hardware cost for micro-merchants, but PIN entry on glass needs specific certification, so higher-value transactions can be limited.
Why POS matters in a payments deal
For acquirers and payment facilitators, POS software partnerships drive merchant acquisition: whoever is integrated into a popular till system gets the card volume. A buyer checks which POS vendors a target is certified with and whether those integrations are exclusive.