iZettle and Square are leading the way in providing cloud-based electronic point of sale systems. No matter what your type of business, cloud EPoS gives your business a new lease of life and keeps your customers happy. Whether the idea of using an iPad PoS is entirely alien to you, or if you’ve already started to discover the benefits of EPoS, read our jargon-free guide to find out why migrating your EPoS to the cloud is essential for retaining customers and to futureproof your business.
- EPoS and the cloud: how does it work?
- The best cloud EPoS systems
- What else do I need to know?
EPoS and the cloud: how does it work?
First of all, you might be wondering “what is the cloud”? Don’t worry, it’s not a silly question. The cloud is simply a network of remote servers for storing all kinds of files, software, applications and databases. From your computer, smartphone, tablet or any other device you seamlessly access the cloud through an internet browser or a purpose-built app. For example, Google Drive is a cloud-based solution for storing files. Cloud PoS is also known as mobile PoS or simply mPoS.
To highlight the differences between traditional point of sale (also known as legacy PoS) and cloud EPoS systems let’s take the example of a restaurant. With traditional PoS, orders are put into a computer terminal somewhere front-of-house, and the operations and transactions are all run through a back office server. Traditional PoS systems not only physically take up space on your premises but they are also limited in terms of features. On top of that, upgrades and maintenance of the physical hardware can be costly and disruptive.
In a restaurant with a cloud PoS system, waiting staff can use handheld devices such as tablets to take orders and payments, which communicate with a remote server (i.e. in the cloud). All communication between multiple PoS terminals, receipt or kitchen ticket printers and even online delivery services is wireless because it takes place via the cloud, eliminating the need for a physical server on the premises.
Let’s see what other advantages cloud PoS has:
- Lower costs
Cloud PoS systems cost less to set up, since instead of having to purchase or rent a fully-featured computer, third-party POS software and receipt printers, you can use your existing phone, tablet and computer to process transactions through an app. Cloud POS hardware is generally limited to a low-cost card reader that you own from day one.
A legacy PoS system requires expensive hardware or software upgrades and/or maintenance as well as the initial set-up costs. Depending on which cloud EPoS you choose, you may have a monthly subscription to pay if you choose extra features, or you might only need to buy a card reader that goes with the free app.
- Access from anywhere
Need to see your business’ sales data when you’re out and about? No problem! Since all of your cloud PoS data is stored in the cloud, you can access it from anywhere, as long as you have an internet connection. Even better, the data is recorded in real time so you always have the most up-to-date picture of what’s going in your business with key metrics such as sales revenue and inventory data often just a tap or click away.
- Better security
With legacy PoS, if the system crashes you run a considerable risk of losing everything in one fell swoop. Using cloud based software, everything is backed up automatically on remote servers. Even if there is a temporary connection failure, your data is easily recovered and restored.
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Additionally, because legacy PoS solutions are often fragmented, with different vendors providing hardware, software and payment processing, the business is often left to sort out PCI DSS, GDPR and merchant of record compliance. With cloud POS solutions, on the other hand, it's the same company that provides payment processing, software and hardware so they will often take on these regulatory responsibilities free of charge.
- Integration with other business operations
Cloud PoS systems integrate easily with other business-critical operations, such as online ordering, accounting or loyalty programmes. A restaurant that takes reservations via an app, such as The Fork or Open Table, can integrate those bookings with a cloud PoS system. Legacy PoS systems simply do not give you this kind of agility or ability to communicate seamlessly and conveniently.
- Faster payment processing for customers
Particularly relevant for shops where long queues are a real turn-off for customers, mobile PoS systems take payments quickly and efficiently. mPoS accepts all kinds of payments; chip and pin, gift cards, as well as mobile payments via smartphones. Customers expect to be able to use their preferred payment method and they also hate being kept waiting. Cloud PoS helps your business take a huge step towards solving those typical retail PoS problems.
In addition, cloud PoS companies generally do not differentiate between different types of payment card in their transaction fee structures. Unlike in legacy PoS systems, where processing American Express cards tends to cost extra, cloud EPoS services charge the same commission fees for all credit and debit cards, whether they are Visa, Mastercard or American Express.
- Receive payments sooner
With cloud-based payments you get your money faster! Using the power of the cloud and mobile phone technology to expedite transaction security, payments could arrive in your bank account instantly. Depending on your EPoS provider, there’s likely to be a fee for instant payments, but in any case, using cloud EPoS nearly always means getting paid faster than with legacy PoS where deposits can take as much as 30 days.
- Solutions tailored for your business
Traditional point of sale software systems are generally off-the-shelf and not easily adaptable to the specific needs of your business. Cloud PoS systems, on the other hand, tend to have lots of different options for you to pick and choose from. Being able to pay as you go instead of committing to a long-term contract is a further bonus of cloud PoS.
- Sophisticated insight into business performance
Real time sales data and instant access to customer purchase history give you a much clearer, fully-rounded picture of how your business is performing. With traditional PoS this kind of information tends to be fragmented and difficult to integrate or even understand.
With all of your reports and data in one place, cloud EPoS makes it so much easier for you to analyse your figures and then use that information to improve your business’ performance by making you a better-informed business owner.
- Loyalty programmes
You don’t need us to tell you that rewarding customer loyalty is one foolproof way to grow your business. It’s much easier to retain customers than to acquire news ones! Cloud EPoS systems make it simple to use your customers’ information securely to create attractive offers to increase repeat business. If you want to create a full points-based loyalty system, you could do it all from the same platform, analysing sales reports and customer profiles to build something that enhances the retail experience for your customers as well as letting you keep in touch with them.
- Inventory control
Having access to your entire inventory management system via the cloud has plenty of benefits. If there’s any kind of mobile aspect to your business - perhaps you sell at pop-up shops or trade shows - you want to be able to know exactly what stock you have no matter where you are.The cloud synchronises your inventory from your website sales and your bricks-and-mortar premises.
No more having to cross-check sales with spreadsheets; every sale is accurately reflected in your inventory, which you can check from any device at any time. Identifying what’s selling and what isn’t is simple and your system can be set up to auto-order items that are low in stock. For multi-branch businesses, you can easily analyse customer purchasing data for each location, transfer products and compare sales information for each of your branches.
The best cloud EPoS systems
With more and more cloud EPoS tools coming onto the market all the time, the choice can be bewildering. We’ve whittled it down to the top three to help you make up your mind.
Don’t forget these systems are a lot more than simple point of sale and credit card processing. Payroll, employee management, stock inventory and monitoring, data analysis of all your sales - these software solutions include a bit of everything!
iZettle provides an impressive free EPoS system plus the option to buy a card reader to take chip and pin or contactless payments from debit and credit cards. The iZettle card reader, which costs £29, works via a bluetooth connection. Both the card reader and the app require at least a 3G broadband internet connection.
There are two versions of the PoS app: iZettle Go (free) and iZettle Go Plus (£29 per month), which are compatible with both Android and Apple operating systems, plus there is another iPad PoS for bars and restaurants, which we’ll come back to later. With Go and Go Plus you can take payments, manage receipts, analyse sales, track your inventory and send invoices. Invoices are paid online and you can set up the app to track unpaid invoices and send reminders to chase them up.
iZettle Go also synchronises sales data instantly, no matter if you’re selling from your website or from your premises. All this with free phone support 9am-5pm for when things go wrong.
As far as we can see, the benefits of paying for the Go Plus version are limited. Paying the £29 monthly fee for Go Plus gives you extra technical support and a lifetime warranty for the card reader. With the free version of the app there are no upfront or monthly fees to pay. You pay a 1.75% fee per card transaction and 2.5% per email invoice regardless of whether you use iZettle Go or iZettle Go Plus.
iZettle’s website lists versions of iZettle Go that are targeted specifically for different kinds of businesses: retail; food and drink; health and beauty, and ‘services’, which covers everything from party planners to builders to lawyers. However, on closer inspection the app and card reader are the same for each category; all they’ve done is use sector-specific images and quotes from satisfied customers.
However, iZettle Pro Hospitality - at £39 per month per iPad - does indeed give you extra features especially designed for restaurants, bars and cafés that the free Go app does not include. Split bills, staff scheduling, sales reports per employee and per locations (for businesses with multiple locations) are built in to iZettle Pro Hospitality. The card transaction fee is lower than in the iZettle Go app: 1.25% versus 1.75%.
Customer feedback from independent review site Trustpilot suggests that iZettle’s standard of service has taken a turn for the worse in recent months. It's not really clear what's causing this fall in customer satisfaction; the problems people report range from not receiving payments to unhelpful technical support on the phone to glitches with the card readers. However, judging from iZettle's public responses to their disgruntled customers, the company seems keen to address these issues.
At the time of writing, iZettle was on the point of being purchased by the original online payments giant PayPal. There is no reason to suppose the takeover will have any immediate detrimental impact, but it is worth mentioning that PayPal faced a challenge from the competition regulator. In the end, it was ruled that the competitor mPoS companies, such as Square, would prevent the PayPay-iZettle deal resulting in a monopoly in the UK.
Like iZettle, Square PoS comes in the form of a free app, available via Google Play Store or the Apple Store. Square’s card reader costs exactly the same as iZettle’s reader, at £29. The per transaction fees for Square are also near-identical to those of iZettle:
- 1.75% fee for contactless and chip & pin transactions using the Square Reader
- 2.5% for keyed-in and remote transactions via the app and for invoicing
With Square, you receive payments into your bank account the next business day, or for an extra 1% on top of the transaction fee you can choose to receive instant deposits within the same business day. Comparing the free versions of Square and iZettle, Square wins in terms of inventory management, split bills and being able to handle multiple locations. Square’s pricing is simpler too, with clear optional add-ons for the charging dock, iPad PoS stand and a monthly fee for extra employee management tools.
Another impressive feature that Square has is the ability to extend functionality and seamlessly integrate with third-party business software, from professional accounting software to website building tools for ecommerce.
In contrast to iZettle, reviews from Square’s customers speak very highly of the app and the standard of service from Square. Another feature that Square offers that iZettle does not is the facility to accept magnetic stripe cards. This is important because, although chip & pin is now predominant in the UK, customers from other countries still use magnetic stripe cards.
Retail or restaurant, Lightspeed has a different package for each sector. With Lightspeed Restaurant, we like how easy it is to modify restaurant orders, for example ordering extra salad instead of chips, and the smooth integration with online takeaway order systems, such as UberEats. Bills can also be split easily per person or per menu item.
Managerial aspects of your business are fully integrated into Lightspeed. Finance and staff management features are all included. For instance, reports of your employees’ performance in terms of sales per shift and exporting accounts directly to your chosen accounting software are simple and straightforward.
In terms of price, Lightspeed cannot compete with iZettle or Square. At around £79 per month (per iPad) for Lightspeed Restaurant and £69 per month (per cash register) for Lightspeed Retail, the costs are substantial. However, the full back-office functionality is worth considering if you currently find yourself spending a lot of time flitting back and forth between different software programmes for different business management activities.
As well as paying for having everything in one place, from one provider, Lightspeed also offers a higher level of support than the free EPoS systems. From webinars to online chat and telephone support available 24 hours a day, seven days a week, there is plenty of assistance not only to get you up and running but to help you out whenever you need it in the longer term.
What else do I need to know about cloud EPoS?
Bear in mind the time it takes to set up your account. Depending on your business, adding your products and services to the software could be a lengthy but worthwhile process. While you could, in theory, take advantage of the free trials on offer from as many cloud PoS solutions as you like, that could turn out to be more time-consuming than you bargained for.
Think carefully about your online and face-to-face sales and how easily your chosen retail technology can integrate all your sales. Your customers expect that making a credit card payment will be equally straightforward regardless of where the purchase takes place.
Notwithstanding the advantages of the cloud, you still need some kind of PoS hardware. When comparing mobile PoS systems, think about whether you need to invest in iPads for your employees, new credit card readers, receipt printers or a new electronic cash register.
With any cloud-based solution, the drawback is that you are at the mercy of your internet connection for all but the most essential payment processing functions. Most broadband connections nowadays have a high level of reliability but it’s still sensible to have a contingency plan in place for those few-and-far-between crashes.
What happens when the internet goes down?Some cloud EPoS systems have an offline mode, which means that, while not all of the app’s functions are available, you can still accept payments. Once you’re back online, all the data will synchronise automatically and your payments will be processed as long as you reconnect within a given time frame (generally between 24 to 48 hours).
To get the best out of your mobile point of sale system, your internet connection needs to be reliable and fast. Signing up to the best business broadband you can afford will pay off not just at the point of sale, but in many other aspects of your business too. For instance, if you haven’t already got guest wifi sorted out on your premises then it should be high on your to-do list. Customers expect to be able to get online anytime, anywhere.
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With the imminent arrival of 5G, another technology revolution is just around the corner. We reckon it’s best to be ahead of the game by migrating your business operations to the cloud instead of relying on the traditional set-up of wired server and card terminal. If your business doesn’t keep up to date with technology, you risk losing out to the competition. Click below for more information about 5G.
We’ve given you just a taste of what’s out there in the world of cloud EPoS. With more mobile payment and business management tools becoming available all the time, you’re spoilt for choice. Our advice is to keep in mind your main priority: whatever will help you increase sales and grow your business in the long term is the right solution for you.
Want to know more?Read our IT checklist for businesses for more information about using technology solutions to increase your productivity. Plus, find out how Brexit will affect your business and make sure you're not paying too much for gas and electricity in your restaurant