Transitioning from mobile payment systems to traditional POS

Summary:Mobile point-of-sale (POS) systems running on smartphones are an effective means of doing business anywhere. Things get complicated when setting up a brick and mortar shop.

Square
Image credit: Square

Mobile point-of-sale (POS) apps such as that from Square, have made it simple and cheap to conduct business almost anywhere. Offering the ability to turn a smartphone into a full-blown, albeit small, cash register that handles credit card payments, these systems can work anywhere there is at least a 3G data signal. As good as these systems are at what they do, they're not capable enough for fixed retail operations. Transitioning to a "real" POS system can turn an easy process into a complicated one.

My foray into the POS wilderness came about in a way that others in the same position likely run into. A good friend has been working as a hair stylist for years, renting a chair in existing salons. She's moved around a few times and her mobile POS system has easily moved right with her. It's iPhone based and uses a little credit card swiper to charge customers. It works off the 3G signal on her very old iPhone without issues. She's used it for a few years and loves it because it's easy to use and it just works.

Her practice has grown so successful that she is in the process of opening her own salon. It's an exciting time for her as it's the very definition of the American dream; work hard and reap the benefits.

The build-out of her new salon is in progress and she's attending to a lot of details in preparation of that all-important opening day. She had everything under control until I asked her a simple question: "What point-of-sale system are you going to use in the salon?"

The look on her face made it clear she had not given a POS system a thought. Like others in her position, her mobile iPhone system has worked so well that she figured she'd keep using it.

Many of these POS solutions are cloud-based, which means installing Internet connectivity which would otherwise not be essential.

At first blush that seems reasonable, until you think it through. While her current POS system easily handles the handful of customers she has daily, in the salon she will have two or three stylists working along with her. The increase in customers will overwhelm her little iPhone. Plus, it's unlikely she'll want to be handing her precious iPhone to the other stylists to process important financial transactions. She also has to make sure the stylists don't use their own mobile system to cut the salon out of the transaction. And don't even think about what happens if that smartphone, so critical to her business, gets lost, stolen, or broken. 

Once convinced she needs a full-blown POS system, she began searching online for the right one and talking to other salon owners. That turned into an exhausting process as there are many out there. There are some that are based on the traditional cash register, and others that use a simple PC to run things. They all have some sort of credit card swiping hardware to handle payments.

There are POS software systems tailored to many specific business categories, and the hair salon is no exception. The software choices range from simple payment processing options to full-blown business systems. I suggested she consider one of the latter as it will be very useful to handle all aspects of her salon, from payments to accurately tracking the stylists' transactions to pay them their due cut.

She hasn't settled on one yet, but she's trying several that offer free trials for just that purpose. Some of these systems come as subscription services that provide everything including support and credit card processing services. These are priced at a reasonable monthly fee with additional transaction charges for credit card processing. Those latter fees are similar to what she's paying now for her iPhone-based system.

Adding a POS system to the operation creates other needs she has to consider for her salon. Many of these POS solutions are cloud-based, which means a need for Internet connectivity. Her clients will appreciate having connectivity while waiting for service so that would make the expense easier to bear. It might end up being expensive for a small startup and an expense she wouldn't have to incur if she used her existing mobile system.

While it would certainly be easier and cheaper to keep using that mobile POS system in her new salon, as mentioned it wouldn't be very practical. It wouldn't help run her business, either, and she admits a full-blown POS system will be good. I told her not to give up her iPhone system when she goes "professional". The new POS system will surely have downtime occasionally, and that iPhone will make a great backup system at such times. 

Topics: Mobility, iPhone, PCs, Smartphones

About

James Kendrick has been using mobile devices since they weighed 30 pounds, and has been sharing his insights on mobile technology for almost that long. Prior to joining ZDNet, James was the Founding Editor of jkOnTheRun, a CNET Top 100 Tech Blog that was acquired by GigaOM in 2008 and is now part of that prestigious tech network. James' w... Full Bio

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