POS Transaction Meaning
Is it your first time starting a business or using a POS system? Confused by all the technical jargon?
Whether you are opening an online store or a physical one, you're likely come across new terms and phrases relating to POS systems.
We'll explain exactly what POS transactions are, and clarify the different types of POS transactions available.
Continue reading to learn everything you need to know in order to make your operation run smoothly.
What Is A POS Transaction?
What is a POS System?
What is POS? POS stands for 'Point Of Sale'.
A POS system is a combination of software, such as various apps, and hardware, like the receipt printer and cash register, that lets a business accept payments from customers and print out receipts as its most basic function.
POS systems can be used in a variety of business types from a retail store to a restaurant to a supermarket, anywhere where a buyer will purchase goods, online or in person.
Most POS software allows businesses to track their sale transactions, and inventory, as well as gather customer information.
Many also have employee handling functions and allow you to generate a plethora of reports plus there are even cloud-based POS systems on the market that allow you to access the system remotely.
What does POS transaction mean?
POS transaction stands for 'Point Of Sale' transaction. POS or point of sales transactions happen whenever a customer or buyer pays for goods or services.
When the buyer purchases goods or services, this could be online or offline. The POS system will record this information, and lets you monitor all the transactions for your business.
What Are Examples of POS Transactions?
Imagine you are at a retail store buying a new shirt.
You make your way to the checkout counter to pay for your item.
The checkout counter staff scan your shirt and the POS system generates a bill.
You then pay for your shirt with either your credit or debit card, digital wallet, or cash, and are given a receipt. A POS transaction has occurred.
POS systems are also commonly used in restaurants and cafes. So after you receive your food and drinks bill, and you pay it at the cash register, or maybe the waiter takes your credit or debit card payment at the table using a handheld device, a 'Point Of Sale' transaction occurs.
Basically, whenever money for products sold and items purchased are put through a POS system, a POS transaction occurs.
What Is POS Debit Meaning?
Another term that frequently pops up if you are getting your head around POS systems and POS transactions is POS debit.
It is related to when a buyer uses their debit card to make a purchase and the money is debited from their checking account.
POS transactions post information on bank and credit card statements.
The term, POS debit, usually appears on the buyer's debit card statement in the transaction or merchant description. Usually, POS is also marked on credit card account statements as well if this payment method is used.
This helps customers to identify these transactions from their credit card or bank account immediately when their checking account or credit card statement is viewed.
This POS debit description is useful as it can help the customer identify the merchant to which payments have been made as well as any fraudulent transactions if they can't identify the merchant associated with a particular POS transaction.
Types Of POS Transactions
POS transactions can be placed into two major categories depending on how the transaction happens.
During an offline POS transaction, the buyer visits the store in person, purchases the goods, and the seller can receive the cash payment instantly.
When a buyer purchases services or goods online, an online POS transaction happens. For example, if a buyer purchases a new purse online and makes their payment with a digital wallet or visa debit card, or credit card, an online POS transaction happens.
In these POS transactions, the seller must wait for their money as the request is sent to the customer's bank for the cash to be moved from their account.
Purchase, Sale & Receipt
Online and offline POS transactions can be sub-divided into three different types, purchase, sale, and receipt.
A POS purchase transaction is made when a product is purchased and in return, a payment is made, all the data associated with that purchase is logged and aggregated by the POS system.
A sale happens when a product is bought. The POS system will monitor the quantities of the products sold as well as other information such as the cash received, time and date of the transaction, customer information, and the employee handling that particular sale.
Once a payment has been made, the POS system creates a receipt for the buyer. It includes information about the quantity of items purchased, the amount paid, the time and date of the purchase, and the employee handling the transaction.
As a first-time business owner or a customer, it can be quite confusing getting your head around all the terms and phrases you encounter when dealing with POS systems, different payment methods, and transactions.
As a customer, it is useful to know about POS transactions so you can be in full control of your finances.
As a merchant or seller, understanding these processes is important so that your customers can have confidence and feel secure in the sales you make to them.
Whether you're ready to purchase a POS system, or are just price shopping, our FREE quote service will enable you to get a good feel for the market. Answer the few quick questions below to let us know what equipment you are interested in, and we'll provide quotes from the most reputable dealers.