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If you are a newcomer and plan to have a retail business in this technological era, it is necessary to acquire a supporting POS system. It supports you in processing all modern payment kinds, inventory management, and most crucially, recording and storing all transaction data. There are two main types of POS software in the market: Cloud POS and On-premise POS. Each type has its own pros and cons. This article will bring to the table all the benefits and drawbacks of these two types so that you can make your own informed decision.

What is On-premise POS?

1. Definition

On-premise POS or traditional POS, or sometimes called legacy POS is the POS type that all data is being stored on a local database, specifically in your computer’s hard drive. So you just can access it when you use your computer and open the drive.

2. What are its pros and cons?

PROS

Some outstanding advantages that on-premise POS can bring to businesses include:

  • Internet independence: On-premise POS systems don’t rely on the internet. You can still access the system and data through the installed device without the internet. 
  • One-time payment: You just have to pay one-time for the on-premise POS since it is just designed for your own business. With a one-time payment, it becomes your asset.
  • Diverse features and functionalities: Because it is your asset, you can customize and add all the features and functions based on your demand.

CONS

On-premise POS also has many limitations:

  • Expensive to implement: You will need additional hardware that is compatible with the POS so the cost to implement is high.
  • Lack of mobile optimization: because it does not rely on the internet so you can not access it anywhere so you have to present at the terminal if you want to do any transaction.
pos-cloud or on-premise

What is Cloud POS? What is SaaS?

1. Definition

Cloud or Cloud-based POS is the POS software type in which all data and information are being stored in an online server and can be accessed anywhere through the Internet.

Meanwhile, SaaS stands for Software as a Service, which means that the software is centrally hosted. The license is given to the clients on a subscription basis through the internet. 

People normally use those two terms interchangeably. Cloud POS can be deployed as SaaS. However, many cloud POS systems are not 100% cloud-hosted but SaaS is a real web-hosted application.

2. What are its pros and cons?

PROS

Cloud POS offers numerous benefits for medium and small businesses such as:

  • Remote access: This is the most important advantage of cloud POS. You can access your system and data from anywhere in the world. 
  • Real-time sync: Cloud POS normally offers a real-time synchronization feature in which all data between online and offline can be automatically updated in real-time. It is really useful for retailers who want to run different sales channels.
  • Data Security: All transaction data is automatically backed up online and secured on the cloud by different methods based on different suppliers. When your device is lost or broken, you don’t have to worry about losing data.
  • Scalability: Business growth and expansion are desired targets for all retail business owners. It also means that the POS system is possible to be scaled up when needed to match with business size. Cloud POS is designed with scalability so that retailers can choose to scale up the POS without spending too much time, effort, and budget.
  • Business insights: Cloud POS allows you to track all transactions, or sale histories so you can view this information anywhere at any time.
  • Cost efficiency: Using cloud POS can help you reduce many costs since you don’t have to buy a hard drive to store the data. Besides, all the cloud POS systems now offer many useful tools for business, so you don’t need to buy any extra software.

CONS

 Besides huge advantages, cloud POS also has some drawbacks as following:

  • Inability to customize: It is difficult to customize a Cloud POS system because it is deployed in fixed features depending on different suppliers.
  • Internet dependence: Cloud POS requires a stable internet connection. Without the internet, you can not access your POS system. In addition, an unstable Internet connection can cause service disruption.

Comparison of Cloud POS vs On-premise POS

To identify which one is better, we have to take a closer look into some important features that affect retail business:

  • Deployment:

The cloud POS is hosted by the vendor’s server and can be accessed via any browser. On-premise POS is only available on company computers and servers that are physically located on the premises.

  • Pricing: 

The cloud POS usually has a lower monthly subscription that you may continue to pay indefinitely, whereas the on-premise alternative is a one-time license that costs more upfront. It is riskier to invest a significant sum of money in advance than pay monthly because the technology changes and upgrades every day. The software may evolve and age quickly. 

  • Security: 

It is a common thought that the On-premise POS is more secure than the cloud POS because the data is stored in a separate company hard drive. However, nowadays, cloud POS suppliers have already added some standards to increase data security and it works well. On the other hand, all data in On-premise POS is stored in one place. So in case of an emergency (housefire, data breach, etc), nothing will be saved.

  • Accessibility: 

Cloud POS gives more accessibility than on-premise POS since you can access it anywhere with the internet. In addition, cloud POS also offers seamless mobile access which is quite important in today’s world.

With all those comparisons, Cloud POS gives more benefits to almost all retail businesses over on-premise POS in the context of the modern world with the rise of the Internet and mobile devices. Cloud POS offers more accessibility, better pricing, and high security. 

Besides, data from some recent surveys also show that Cloud POS is more widely chosen by retail businesses. According to financesonline.com, 61% of quick-service restaurants in the US used cloud POS(Pymnts, 2018) and 60% of new retailers are asking for cloud POS rather than traditional POS(Reforming Retail, 2018). Following data from Forbes, 61% of merchants are considering a cloud POS system for their business (Forbes, 2018). In addition, Cloud POS adoption is predicted to increase by 50% before the end of 2021((Reforming Retail, 2018).

Conclusion

In general, both on-premise and cloud POS have their advantages and disadvantages. Despite cloud POS being more outstanding and popular, On-premise POS also has its own features which are suitable to some business types who require their own customized POS system. Retailers should carefully examine whether to use a cloud-based POS system, or a traditional POS system depending on the type of business, demands, and scale.

Best Retail POS System

Optimize your business operations with our complete POS for Magento

  • Sell online or in your physical stores seamlessly with real-time data synchronization.
  • Sell everywhere from one platform with desktop or iPad devices, even without internet connection.
  • All data stay safely on your Magento website, and your POS doesn’t have to rely on third-party servers to work.
EXPLORE MAGESTORE POS
Keenan Pham

Author Keenan Pham

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Best POS (Point of Sale) System

A complete omnichannel POS for Magento retailers
Sell online or in your physical stores seamlessly with real-time data synchronization.

Explore Magestore POS

What is Magento POS

A Magento POS (point of sale) system is software integrated with the Magento platform to synchronize data between your online and offline stores and facilitate retail operations. Magestore POS is a web-based and Magento-native POS which requires at least one Magento website to work.

Who needs Magento POS system

The Magento POS system is developed for retailers with both Magento eCommerce websites and physical stores, and want to use the Magento website as a centralized place to manage all sales data and sell both online and offline.

Some features of Magento POS system

A basic Magento POS can work as a cash register to create orders, add discounts and taxes, print receipts, and manage sales. But a complete Magento POS system can assist you with more advanced tasks, such as inventory control, supplier management, loyalty programs, etc.

Why use Magento POS

  • Magestore POS is native to Magento and is installed directly on your Magento backend without third-party plugins, to inherit all Magento's power.
  • You can use our Magento POS on multiple devices, web browsers and create unlimited accounts without extra fees.
  • All data stay safely on your side, and your POS doesn't have to rely on third-party servers to work.
  • You only need to pay once for the POS license and get full ownership of the solution.

45-minute Live Demo

Let us show you how it all works

After you complete the registration form & schedule a meeting with us, we'll contact to ask for your confirmation. This demo session is completely FREE & requires no commitments.

1. Where we'll discuss

We do screen sharing, so the demo will be conducted using Google Meet.

2. What we'll do

Our specialists will guide you through the POS solution and answer any questions you have. All to see if our POS system fits your business requirements.

3. What you'll get

  • A LIVE demo session to see how Magestore POS works
  • A FREE demo site to explore every product feature
  • A FREE consultation with our expert to discuss the best-fit solution for your business.

4. Additional information

  • A demo typically lasts for 45 minutes, but we can adjust the duration based on your needs
  • No preparation required but it's nice to have your requirements clear
  • Additional team members are welcome to join
  • If you want to see how Magestore POS works in reality, you can contact one of our customers and ask for their experience
  • Magestore doesn't do cold-calling, we only contact you on request.

Magestore | POS for Magento

About the Magento platform

1. What is Magento?

Magento is an open-source platform that helps retailers create eCommerce websites, released on March 31, 2008, by Varien and developed on Zend Framework. In 2018, Adobe acquired Magento with a price of $1.68 billion. There are currently about 270,000 eCommerce websites running on Magento in 2022.

2. Why do retailers choose Magento?

Most of our customers say Magento is speedy and more customizable than others; it is suitable for medium and large enterprises or fast-growing businesses with complex requirements/customizations.

Not sure if you're using Magento, check your website here!

3. What to do next?

  • If you are new to Magento or searching for eCommerce platforms, you can explore more about Magento in this article.
  • If you are looking for Magento website development services, please reach our dedicated service team here.
  • If you've already had a Magento website and are searching for a POS system, please close this pop-up and continue exploring.