From the first cash registers to today, point-of-sale (POS) systems have evolved enormously. They enable the smooth processing of transactions between retailers and customers through purchasing, invoicing, and payment options. Today, modern retail points of sale are high-tech facilities with many contact points and digitized services.
Let’s take a little trip back in time: In 1879, saloon owner James Ritty invented a cash register, a mechanical adding machine, to protect his receipts from theft and embezzlement. Jacob H. Eckert added a cash drawer and a bell shortly afterward. It was not until 1906 that the first cash register with an electric motor instead of a hand-operated lever mechanism followed. IBM set a new milestone in 1973 with the development of the first computer-controlled cash register. The first networked cash register system could operate up to 128 cash registers and recorded all sales data in a central memory. This was the first time that client-server technology, peer-to-peer communication, simultaneous backup in the local network, and remote initialization were used commercially. At the same time, the first computerized credit card system was developed, with which sales transactions could be processed in less than a minute.
Powerful computers and more advanced networks led to the further development of POS systems. Another significant milestone was the advent of the Internet in the 2000s. It was now possible to network many terminals over very long distances. This benefited retail chains, in particular, which were able to centralize the checkout processes of several stores and, for example, collect and merge sales and inventory data. However, the internet had an even more significant impact with the advent of cloud POS, which meant that software no longer had to be installed, configured, and managed directly on local computers. This technology proved to be a boon, especially during the pandemic. To keep up with the current demands of consumers, most retailers moved their businesses to the cloud.
A modern POS system is a valuable business tool offering much added value. POS systems generate unprecedented data that gives businesses valuable insights into customer behavior, sales trends, and inventory management. Sophisticated data analytics tools turn this raw data into actionable information, enabling enterprises to make informed decisions that drive growth and profitability.
Customers often engage with businesses through multiple channels – online, offline, and via apps. Integrating an omnichannel POS system ensures that data, preferences, and customer histories are synchronized, regardless of whether customers shop via a website, mobile app, or in-store. Such integration offers customers a high level of convenience and promotes a personalized sales experience.
Credit and debit cards are still popular but are being used less and less as consumers prefer mobile, contactless payments. In addition, payment options include installment payments, Buy Now Pay Later (BNPL), gift cards, loyalty programs, and – maybe soon – cryptocurrency.
As in most business areas, AI will also revolutionize the POS market and improve the efficiency of retail activities. The integration of AI into POS systems is expected to improve staff management and payment processing. With AI-powered POS systems, retail businesses can offer their customers a better and more personalized experience. In addition, an AI-powered POS system can instantly process all types of payment transactions, from social apps, mobile applications, and online payments to traditional in-store payments.
But where there is light, there is also shadow: As POS systems store more and more sensitive data, they become an attractive target for cybercriminals. Companies must take measures to protect their POS systems from cyber-attacks. These include secure passwords and access controls, regularly updated software and hardware, the use of firewalls, the encryption of sensitive data, and staff training.
POS systems have come a long way since their introduction around 150 years ago. Today, they are more than just a means of accepting payments and making sales. Modern POS trends have added features and capabilities that turn any system into a virtual command center for your entire business. With increasing mobility, data analysis, and security, POS technologies are becoming integral to every retail business.