On-Premise vs. Cloud-Based POS Systems

If you’re exploring options for a point-of-sale (POS) system, you’ll need to choose either an on-premise or cloud-based POS system. Understanding the difference between the two will help you find the right system for your business.

An on-premise POS, also known as a traditional or legacy POS, stores data on local servers and runs on a closed, internal network. An example of on-premise software is photos or files saved on your home computer’s desktop that is not accessible online anywhere else.

Meanwhile, a cloud-based POS, also known as a Software-as-a-Service (SaaS) platform or web-based POS, is a web-hosted system that stores data on remote servers. Cloud storage works by allowing users access and to download data on a device—such as a laptop, tablet, or smartphone—anywhere with Internet service.

Similar to on-premise systems, cloud-based solutions can come packaged with additional software to expand functionality. Ideally, a cloud-based POS system should allow you to:

  • Process multiple payment types, including EMV chip cards and NFC contactless transactions
  • Track and manage inventory
  • Manage employees
  • Collect detailed customer information
  • Create reports based on specific data points

Security is an important consideration when choosing a POS system. Whether you store customer data on-site or rely on a cloud-based service provider, sensitive information should always be protected from theft. Making sure that your customers’ data isn’t vulnerable requires consistent compliance with data security laws and regulations, such as the Payment Card Industry Data Security Standard. Do your research when choosing a POS platform or provider to ensure all proper security measures are in place.

Which point of sale system is best?

Cloud POS solutions have a low entry barrier in terms of cost and set-up, making it an attractive point-of-sale option for small businesses. Because of the minimal investment required, small businesses can get a flexible payment solution off the ground quickly. New features and hardware can also be integrated into the existing system as they become available.

On the other hand, on-premise systems require a larger upfront investment and a long-term commitment. The return on investment for an on-premise POS depends on the length of time the system can act as a viable solution for your business. New technology will eventually require hardware updates, and software support may be challenging to find as providers phase out older products.

Because both on-premise and cloud POS systems can meet a range of business needs, the choice between the two will depend on a variety of factors, including:

  • Budget
  • Your business model
  • Security features
  • Convenience
  • Ease of use

For many small businesses, cloud-based POS systems offer both affordability and functionality. Before deciding between an on-premise and cloud-based POS system, take a look at your business plan and your budget.

Remember to choose a system with the right level of flexibility for you, your employees, and your customers to help streamline payment processing in an efficient and secure way.

Sekure can help you find a POS system that’s right for your business. Contact Sekure Merchant Solutions today for more information.