Mobile point-of-sale (mPOS) systems are coming to the forefront as businesses seek out more flexible, advanced payment options for storefronts. According to Grand View Research, the global mobile POS terminal market was valued at $36.07 billion in 2022, with a CAGR of 11.1% between 2023 and 2030.
So, what makes an mPOS such a powerful solution for small-to-medium-sized businesses, and what should business owners look for in a potential mPOS solution? In this article, we’ll look at all this and more.
Let’s get started.
How Does an mPOS Work?
An mPOS system is a type of tablet or wireless mobile device equipped with the right features to function as a payment terminal. The core components in an mPOS system include the mobile device, card reader, and payment processing software.
Together, they enable a business to seamlessly process transactions, while being much more mobile and space-efficient than a traditional POS terminal, which can be large and difficult to move around a storefront.
An mPOS operates by downloading payment processing software into a smart device (e.g. a smartphone or tablet) and equipping it with necessary attachments, such as Bluetooth connection, or by plugging a card reader or contactless reader into the smartphone.
Then, card payments can be accepted as a business normally would; the card reader is used to swipe or tap cards, while the app processes the transaction. Once the payment has been authorized, data is encrypted and sent to a payment processor, completing the transaction within seconds.
Benefits of mPOS for Small Businesses
Let’s look at some of the benefits an mPOS offers for small businesses.
Mobility
Because mPOS can be easily moved and carried by staff members, they aren’t tied to one checkout location like a traditional POS. This makes it possible to take the payment experience (and your business) to wherever your customers are, such as pop-up events, trade shows, markets, or between store locations as needed.
This flexibility streamlines the payment process by liberating customers from long queues or congestion at the storefront, and allowing businesses to maximize sales opportunities—no matter where they are.
Cost-efficiency
Traditional POS systems often require a substantial upfront investment due to the amount of hardware involved. This includes barcode scanners, cash registers, cash drawers, and card terminals. Most mPOS service providers have minimal hardware costs, as they only require a card reader and receipt printer to operate alongside the software on the device. This also means minimal maintenance costs, which improves cost efficiency.
Faster transactions
Because of the light mobile interface and integrated payment processing, mPOS transactions are faster to process than traditional POS, which often features hard-to-update software and significant lag times during busy periods. This results in shorter wait times for customers, and therefore less friction at checkout by minimizing long queues during peak times.
Enhanced customer experience
Today shoppers expect to be able to choose from a range of payment methods, both in-store and online. mPOS systems can accept various payment options, including credit cards, digital wallets, contactless payments, and more. Offering this flexibility as a business helps to build customer loyalty by minimizing friction when making purchases.
Security and compliance
mPOS payment systems should comply with PCI (Payment Card Industry) standards to protect customer data in case of a data breach or leak. PCI compliance requires payment software to observe secure data handling practices, including encryption, safeguarding sensitive information, network vulnerability scans, and self-assessment.
mPOS systems can also take advantage of tokenization to further combat fraudulent activities. Tokenization replaces sensitive bank account or card details like card numbers and CVV with a token that has no value if intercepted by a fraud attack. Combined with multi-factor authentication (MFA) for confirming payments, businesses can provide additional protections for both themselves and their customers.
Features to Look for in an mPOS
So what features should you look for when you’re evaluating mPOS for your business? The following section will give you a good starting point.
Real-time analytics and reporting
Real-time reporting and analytics are essential for businesses to easily track sales performance, peak shopping times, and inventory levels and make data-driven decisions. With robust reporting, it’s much easier to identify purchasing patterns, customer preferences, and payment behaviors, enabling you to optimize operations and improve overall profitability.
Integration with inventory and customer management systems
When choosing an mPOS, it’s important to check that it integrates with your existing business systems for reliable data sharing and reduced admin time. With native integrations to your CRM, accounting, and inventory management systems, you can seamlessly track stock levels, manage customer relationships via loyalty programs or promotions, and run automated invoicing workflows that save valuable time and reduce human error.
Customizable checkout experiences
Your business will have specific needs today, but these could change in the following months or years, depending on your growth strategy. This is why it’s so important to find a flexible mPOS system that offers robust customization options so you can keep up with what makes your customers happy.
Customization options to look for in an mPOS system include flexible tax settings (for expanding into different states), receipt printing options, loyalty program integrations, optional tipping, and more.
Support for multiple payment types
Offering a wide variety of payment options means that your business will never miss a sale due to payment limitations. Your mPOS system should accept all major credit cards, debit cards, NFC mobile payments from Apple and Android, and even QR code payments. The more options you have available, the better you can serve a broader range of customers.
How to Choose the Right mPOS Solution for Your Small Business
Now that you have a fair understanding of its benefits and features, let’s look at how you should go about choosing a solution.
Assess your business needs
Before you start doing any research into mPOS solutions, it’s important to understand the non-negotiable features and functionalities you need—and this comes from analyzing your business’s needs.
Consider factors such as your industry, business size, and sales volume at a minimum, as well as budget, customer preferences, and potential future needs. Remember that retailers, restaurants, and service providers have distinct operational requirements. So, some payment providers will cater to some industries better than others when it comes to specialist features.
For example, Toast is a very well-known POS system that caters specifically to the restaurant industry, as well as cafes and food trucks, but might not be suitable for a fashion retailer.
Compare pricing models (Subscription-based/Pay-as-you-go)
Some providers will offer subscription-based services with all-inclusive monthly fees, while others use a pay-as-you-go model with fees charged per transaction. The most low-cost option will depend on your sales volume and business structure as well as any additional add-on features you’re likely to need.
Note that an add-on feature at one provider could be included in a plan somewhere else, so it pays to compare providers.
Vendor support and customer service
Reliability is crucial in payment solutions because any hiccups in accepting or approving payments could result in thousands of dollars in lost revenue.
When comparing payment providers, it’s important to vet the level of customer support they offer on different plans and the additional costs involved. Consider that when issues arise, having 24/7 access to dedicated support can save your business valuable time and revenue!
Scalability and future-proofing
It’s important to choose a mPOS solution that can grow with your business and accommodate higher transaction volumes, more complex integrations, and additional features. Look for providers that support scalability, such as the ability to add additional locations or user seats or to expand payment options as your company grows.
Common Challenges and How to Overcome Them
Although mobile POS systems have a lot of upsides, there are a few things that businesses need to be aware of before investing in an mPOS system.
Connectivity issues in mobile environments
A cloud-based mPOS system relies on Wi-Fi or cellular connectivity to function. In areas with poor or inconsistent coverage, payments could be delayed or fail. To mitigate this, ensure your mPOS provider supports offline transactions and consider investing in a backup solution, such as a mobile hotspot.
Training employees on new systems
Moving onto a new point-of-sale system can be overwhelming for employees, especially when processing payments under pressure. To avoid slowdowns in sales or incorrect payments, make sure that you implement proper training so that staff feel confident about using the new system and can troubleshoot issues effectively.
Choose an mPOS solution that has a user-friendly interface and offers its own training materials and webinars that you can leverage to train employees.
Managing multiple payment streams and consolidating reports
Accepting multiple payment systems is beneficial in terms of appealing to a broad range of customers, but it can be difficult when managing multiple payment streams, such as in-person and online sales. This can make consolidating reports complex. Look for an mPOS system that integrates with accounting software to streamline financial reporting.
Final Words
Mobile point-of-sale (mPOS) can offer small and medium-sized businesses high flexibility, security, and efficiency while maintaining reasonable payment costs. Whether you run multiple locations or just want to liberate your POS from a standing checkout, an mPOS solution is a real asset that enhances the customer experience and streamlines your payment processing capabilities.
However, exploring the right solution for your business’s needs is essential. Your business size, industry, transaction volume, and must-have features are all important considerations. Consider partnering with an established service provider like Payment Depot for a reliable, cost-effective mPOS solution your business can trust. Contact us today to learn more.
