Choosing the right POS system goes beyond features—it’s important to consider the costs involved. The cost of a POS system varies depending on the hardware, software, and transaction fees required. Whether you’re a small business or managing multiple locations, understanding the breakdown of these costs will help you make an informed decision. In this guide, we’ll look at the main expenses associated with a POS system and how you can budget effectively.

Key factors that impact POS system cost

The cost of a POS system isn’t one-size-fits-all. It depends on the type of business, the number of locations, and the specific features you need. Below are the main cost factors:

Hardware costs

The hardware component is often the biggest upfront investment for a POS system. Hardware costs depend on the type of equipment you need:

Tablets or terminals: Tablet-based POS systems are becoming more common due to their flexibility and lower cost. Tablets like iPads or Android devices typically range from $300 to $800.

Card readers: Basic card readers can cost around $20 to $50, while more advanced chip or contactless readers are priced around $200 or higher.

Receipt printers: Thermal receipt printers are most commonly used and can range from $100 to $400, depending on the brand and model.

Cash drawers: For businesses still handling cash, a sturdy cash drawer will cost between $100 and $300.

Software costs

The software that runs your POS system often comes with subscription-based pricing, although some companies offer one-time payment options. Most cloud-based POS systems have the following pricing models:

Monthly subscription: The majority of POS providers charge a monthly fee, typically ranging from $30 to $150, depending on the plan and features offered.

One-time software purchase: Some companies offer the option to buy the software outright, with prices typically ranging from $1,000 to $2,000.

Note: Be aware that certain advanced features (e.g., employee scheduling, in-depth reporting) may require paying for higher-tier software plans.

Transaction fees

Transaction fees apply whenever you accept a payment through your POS system, especially with credit or debit card transactions:

Flat fees: Many POS providers charge a standard transaction fee, often around 2.6% + 10 cents per transaction.

Variable fees: Depending on the payment processor, fees can vary based on the card type or whether the payment was in-person or online.

If your POS provider offers integrated payment processing (e.g., Square, Shopify POS), you’ll likely be required to use their payment system. Be sure to factor in transaction fees when estimating your overall cost.

Add-ons and integrations

Many businesses need extra features or third-party integrations to enhance their POS system. Add-ons can increase the overall cost:

Advanced reporting: Detailed analytics and reporting features may be available as paid add-ons.

Employee management: Employee scheduling, time tracking, and performance monitoring tools may come at an additional cost.

Third-party software integrations: POS systems that integrate with accounting platforms (e.g., QuickBooks), e-commerce solutions, or CRM software may charge extra fees for these integrations.

Setup and support fees

Some POS systems charge fees for setup, training, or ongoing support services. These can include:

Installation costs: POS providers may charge for installing and configuring the system, especially if you require custom hardware setup or configuration.

Customer support: Basic support is typically included, but premium support, such as 24/7 access or personalized training, may require additional payments.

How to budget for a POS system

To get the most value from your POS system, it’s essential to plan your budget carefully. Here are some tips:

Start with basic features

If you’re just starting out, opt for a basic POS system and avoid paying for features you don’t need right away. Many providers offer affordable entry-level plans that you can upgrade as your business grows.

Look for bundled deals

Many POS providers offer discounts if you purchase hardware and software together, which can help reduce initial costs. Look out for promotions or packages that include card readers, tablets, and printers.

Consider long-term costs

While the upfront costs are important, don’t forget to account for long-term expenses like subscription fees and transaction fees. Calculate the total cost of ownership over several years to ensure the POS system is a sustainable investment.

Frequently asked questions

What is the average cost of a POS system?

For a basic setup, expect to pay around $500 to $1,000 for hardware. Monthly software fees typically range from $30 to $150, depending on the features you need. Transaction fees will vary depending on the provider and payment processing method.

Can I get a free POS system?

Yes, some providers like Square offer free basic software with limited features. However, keep in mind that free POS systems often come with higher transaction fees, which can add up over time.

What’s the cheapest POS system for small businesses?

Square is a popular choice for small businesses due to its free software plan and affordable hardware options. Other affordable options include Shopify POS Lite and PayPal Zettle, both of which offer low-cost solutions for smaller operations.