30 May 2024 | By INDIE
The POS (point of sale) systems in banking have emerged with the rising need for quicker, more convenient, and secure transactions for consumers and merchants. As the banking industry continues to adopt newer technologies, POS systems are also undergoing further innovations to meet the changing needs of its customers. This article focuses on providing detailed information on POS systems – what is POS, how does it work, and its benefits.
POS or point-of-sale in banking is a system where the sale/purchase transaction is completed between a merchant and a customer. The transaction typically involves receiving payments in exchange for goods or services. POS system mainly comprises two components – hardware and software that facilitates the processing of transactions.
Hardware components in the POS system include a POS terminal equipped with POS software, Input devices like card readers, barcode scanners, keyboards, etc., and output devices to print receipts. Software components in the POS system include POS software, inventory management software, and analytics tools.
POS system is one of the common tools used in businesses of all sectors today to streamline the transaction process, manage inventory, and improve efficiency. There are various types of POS systems present such as mobile POS systems, tablet POS, terminal POS, digital POS, open-source POS, multichannel POS, and kiosk POS. Depending on the needs of the business and the type of account held with the bank, one can choose the POS solutions. For example, terminal POS is suitable for grocery stores, restaurants, bookstores, etc. Individuals like contract workers and street vendors may go for mobile POS or digital POS against their digital savings accounts.
Also read: Evolution of savings accounts
POS solutions include both software and hardware components to process the transaction. The POS system works in the following ways:
1. The customer selects the item for purchase, and the staff at the merchant location inputs the bar code mentioned on the item in the system using the POS interface.
2. Customer chooses his preferred payment method. This can be Mobile payment using QR code/debit card/credit card/cash, etc.
3. For credit card or debit card payments, the POS system liaises with the payment processor. The transaction is then authorised after verification by the payment process.
4. Once the payment is received, the POS system generates a transaction receipt for customers. The receipt includes details of the purchase, such as the payment method, item purchased, price, and taxes.
5. The POS system records every transaction, which merchants can use for reporting and accounting purposes. This information can also be used for inventory management and business performance analysis.
6. The POS system can also integrate with other systems such as e-commerce platforms, accounting software, and inventory management software for data management and to streamline the process.
INDIE POS solution can be availed by individuals, sole proprietors, partnership firms, companies, trusts, and societies against their current account and savings accounts.
Also read: Demystifying online savings accounts
The following are the benefits of the POS system:
1. Integrates with the various payment methods and streamlines the payment process
2. Helps to track inventory on a real-time basis which leads to effective inventory management
3. POS system streamlines the transaction process and improves business efficiency
4. POS system helps in the accurate maintenance of data
5. POS solution helps businesses in adhering to compliance and security measures.
6. This helps businesses in cost saving over the long term.
In conclusion, POS solutions offered by banks and financial institutions help businesses streamline their transaction process and enhance operational efficiency. POS solutions offer a range of benefits to businesses, including increasing productivity, managing inventory effectively, and enhancing customer satisfaction.
