Difference between Cloud POS vs. On Premise POS Systems

Posted by Jim Walker

pos system

A POS system is a centralized location where customers have to make payments for products they have bought at your retail premises, food items they ordered in your restaurant, and services they enjoyed at your hospitality business. Simply speaking, POS is a central hub where customer management, inventory and sales in your business can integrate smoothly and transactions can be processed.

As new business models and sales technologies keep on developing, businesses have been moving towards cloud based POS. Around 61% merchants are ready to switch to cloud-based POS, according to a report on Software Trends.

What is Cloud-based POS?
When it comes to cloud-based technology or device, we mean data is actually stored somewhere on the server of someone else, and it is accessed through the web. The benefit is that you can easily log in and access the information from almost anywhere with internet connection.

Of course, it is a convenient way as there is no risk of data loss due to hardware failure. But there are security risks. So, you need to look at data ownership. The hosting provider may own your data and has the rights to sell the data to third parties.

Reliability is another major issue with cloud-based technology. Several devices rely on each other for communication. So, complications are very common. You may also need to store orders and process through the server outside your location. It may lead to transmission and speed issues.

On Premise POS
It goes without saying that the popularity of on-premise POS has been down due to advancement in technology. But it is still a reliable solution for hospitality business. On-premise POS system has been proved reliable for smooth ordering in restaurants along with enhanced marketing, optimized workforce, and managed inventory.

Your sales data is usually stored in your own server and there is internal network to operate on-premise POS systems. On these tools, the data can be accessed only with alternative application or local server. There are still some drawbacks in this model. Despite them, there are some benefits of traditional POS system for bars and restaurants –

Complete Control
You can buy on-premise POS on perpetual and non-exclusive license. You can easily customize and maintain processes as per your business model. It offers great optimization of resources, improves efficiency, and even reduces unwanted wastage.

No Downtime
On-premise POS significantly reduces the risk of server downtime which may cause loss of customers and revenue. Unlike cloud-based systems, on-premise programs don’t need internet connection and businesses can keep up with their operations.

Great functionalities
There are different features of on-premise POS systems like data storage and accounting along with complete security and inventory management. It is also user-friendly and is coupled with touch-screen features. So, it is a great option for coffee shops and fast-food restaurants.

Bottom Line
It is very vital to choose the right POS technology as well as right vendor to avoid any disruption. You also need to consider your needs when choosing a POS system. You can go for server-based system if you need more than 2 terminals and have over 50 seats. These systems have cloud features to keep track on operations and improve efficiency.

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