The Cloud-Based POS System vs. Traditional POS System

POS system

28 February 2020

The Cloud-Based POS System vs. Traditional POS System

posvice user

Christopher Watkins

In the not so distant past, almost every business stored its data in a locally installed POS server. But now, the majority of the business tools used by small and large companies alike are based online. This is due to the proliferation of the cloud-based POS system introduced by SaaS companies. Now, many industries have seen a slow but steady progression toward online-based tools. 

However, you may be asking – why the cloud POS system? This article seeks to conduct a general POS review and answer the majority of the questions surrounding the cloud-based POS system. Also, we will help readers understand the distinctive features of the cloud and the traditional POS system. By the end of this article, you will know the fundamental differences between these two POS systems. 

So let’s begin.

What is a Cloud-Based POS System?

Below we attempt to break down the logical explanation for the term cloud-based POS system. 

  • “Cloud” is a general metaphor for all things based online. 
  • “Cloud-base” refers to an alternative for data storage and processing as opposed to using the resources of your PC for these tasks. 
  • Your data hosting becomes the responsibility of your cloud POS providers.
  • Cloud computing providers provide access to services for the storage of information on the internet (cloud). 

How Cloud-Based POS System Works

cloud based pos system

Unlike the traditional method of saving all business-related data on devices located within the business premises, cloud-based POS systems save and process sales on the internet. Hence, the cloud-based POS system can be divided into two parts, namely: the frontend and backend. 

Primarily, the frontend POS serves the purpose of the user-interface. Therefore, it is the part that users access through their internet-enabled devices such as tablet POS, touchscreen monitors, and smartphones. On the other hand, the backend is only accessible through web browsers. Usually, POS applications are the names many users call cloud-based POS systems. The name is more widely used than the term POS software because it is primarily used on mobile devices. 

Also, you can find it referred to as the EPOS (electronic point of sale) since it runs mainly on electronic equipment. Your regular cloud POS works on several different devices, as such brings a wide variety of portability. If you’re the business manager, you have around the clock access to sales data from any physical location. Because of data updates to the cloud occur in real-time.

We make mention of these facts because, as you’ll see, they have a significant impact on the equipment cost and other fundamental usabilities of the entire system. For instance, data stored in remote servers from POS providers are only accessible through internet connectivity. This seems like a major drawback of the cloud-based POS system. However, the best POS vendors have a way around this limitation. 

These are some higher-level offline functionality available to prevent complete disruption of the functionalities essential for customer service. 

Now consider some of the ways, the cloud-based POS differs from the locally-based POS system. 

Typically Immediate Setup

To begin using a cloud-based POS, you need to sign up. This can either be over the phone or online. Next, you have to download the application, and you can begin using it immediately. Normally, you’ll have the option to use the trial version of the POS app provided by many POS providers. This version comes in handy for testing to help users determine if the application meets their needs. 

Hence, you only get to subscribe to a plan after you’ve determined that the POS application is a good fit for you. 

On the other hand, on-site POS systems attract steep setup fees and setup fees. The setup fees cover things like payment for trained engineers who help install hardware. Also, there are several customization configurations and installation on your regular computer network. You can not sue on-site POS systems unless both the software and hardware. 


Since cloud-based POS systems are subscription-based, their pricing models are also adapted to this kind of software service. Hence, you can either get charges that are within your budget or utterly proportional to the number of features you need. However, one of the main advantages of this kind of model is the fact that you can avoid long-term contracts. 

Usually, the charges cover services like customer support, software updates, data hosting, and the cost of licensing. Also, you pay based on each touchscreen device you need to run the software for your entire business. More importantly, you enjoy a lot of flexibility with each plan you initially choose. Such that, you can switch between plans based on the varying needs or situations at your business establishment. 

Generally, on-site POS systems are more expensive, to begin with. Nonetheless, large retailers that use large numbers of touchscreen devices can also pay high costs as expensive as the traditional counterparts because expenses can quickly add up due to the high numbers of touchscreen devices in use. 

Locally hosted systems and long-term contracts go hand-in-hand. Hence, this attracts high initial costs. Some of the other reasons for high cost include dedicated support, specialized POS hardware setup, and periodic hardware and software maintenance. Irrespective of the higher costs, some large businesses find these options to be a more cost-effective option due to their specific needs. 

Sector-Focused Features, Integrations & Add-ons

cloud-based pos system

If you are using a cloud-based POS system, chances are you’re using a very industry-specific version. This is usually how the cloud POS design makes its software. You will find that the developers can design them particularly to meet the unique needs of different industries, be it the retail or restaurant industry. 

Hence, you’ll find that the ePOS has particular features that have more relevance to the industries it was supposed to serve. Also, it features upgrades that enable more functionalities at extra costs. As earlier mentioned, many businesses have migrated to online POS apps; this has resulted in an increase of integrations between different platforms like WooCommerce and Xero and some of the top POS systems. 

On the other hand, on-site software is also capable of enabling several feature customizations depending on the needs of your business. For example, your employees can only see functionalities and features with the user-interface based on the specific roles they need to perform. This is something you can customize for each employee role. However, you’ll find that you will not be capable of supporting many internet-based software platforms. 

Hence, you cannot support third-party addons like WooCommerce, neither can you integrate with other service providers like Xero or Nero. 

  • Other peculiarities of the cloud-based POS system are the following:
  • Regular software updates
  • No geographic limitations – business premises or otherwise
  • Sophisticated security

Final Thoughts

If for anything, the cloud-based POS system is highly secure due to the sophisticated cloud computing security protocol used by POS providers to safeguard your data. However, when you compare POS systems, you’ll find that having an on-premise also has some security advantages since you control who has access to the computer hosting your POS servers. Nevertheless, it’s come down to an issue of trust, would you rather trust your cloud POS providers or employees with the security of your stored data. 

Also, you have to think of the flexibility, payment options, and POS features you need to make a complete solution that meets the needs of your particular industry. Hence, if you need an industry-specific cloud-based POS system for retail or restaurant, you can check out Sygnio’s versatile POS system or read our comprehensive POS review to make a choice.

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