by Ben Dwyer When you’re evaluating POS systems, credit card processing is a big factor to consider. Does the point of sale system only work with a specific processor? What are the rates and fees, and are they transparent? Is it flat rate, tiered, or interchange plus pricing, and what is the difference? Most of all, how will credit card processing fees affect my bottom line?
All of these are important questions to ask.
At a certain point, you may face a choice: Do I invest in a stand-alone system that works with other processors or an all-in-one platform that has credit card processing integrated within?
We want to help make that choice as easy as possible, so we’ve compiled some info that’ll help you decide which option is best for you. Here are 5 benefits of having credit card processing integrated in your POS system.
- Advanced Customer Reporting
- Optimized Digital Gift Card & Loyalty Programs
- Real-time Cost View
- Rapid Support
- A Cheaper System, a True Partner
Advanced Customer Reporting
Have you heard of a CRM? It’s a customer relationship management system, most often used by big businesses. However, credit card processing integrated into the point of sale system makes this technology a reality for small businesses, too.
You can compare POS sales to credit card deposit reports, view a detailed history and profiles of all your customers, and gain insight into which customers visit your business most often and which are the biggest spenders. With advanced customer reports, managers can select individual guests and view detailed information about their buying preferences, contact information, and the time since their last visit. How does that help? You can design marketing campaigns around your top selling items, or offer specials to your best customers.
Optimized Digital Gift Card & Loyalty Programs
If you’re not offering digital gift card or loyalty programs, you’re missing out on a valuable revenue channel. With credit card processing integrated in your point of sale program, you can optimize these programs even further.
For example, loyalty programs tied to credit cards – which allow guests to accumulate points immediately whenever they use their card – can improve adoption rate by 10X. With digital gift cards, guests spend on average of 20% more than the amount of the card. Plus, with a dedicated CRM system, you can target your best customers with marketing campaigns and encourage them to join your programs.
Eckart Walther of CardSpring explains, “The biggest benefit of card-linked loyalty programs is that they are compatible with existing point of sale systems and they leverage consumers’ existing credit and debit cards. Because they use retailers’ existing payment solutions, card-linked programs do not require expensive upgrade [or] in-store training, and can achieve broad customer adoption.”
Real-Time Cost View
Gone are the days of sifting through papers and reading complicated credit card processing statements. With some POS systems with integrated credit card processing, you can see what your effective rates and fees are on every transaction you swipe, in real-time, and side-by-side with sales reporting.
That way, you always know exactly what you’re paying.
Restaurant POS manufacturer and credit card processing company Toast, for example, offers flat rate credit card processing, which means it’s one rate for all cards as opposed to different rates for rewards cards, corporate cards, debit cards, etc. And you can see the rate on every transaction.
Keep in mind that this type of flat rate pricing may or may not be the most cost-effective for your business. But it will be an easy rate to see and track.
Rapid Support
If there’s ever been an issue with credit card processing at your business, you know the pandemonium that ensues. The owner is calling the processor, the manager is calling the POS system, and the servers or staff are trying to explain the situation to frustrated customers.
With credit card processing integrated in your POS system, it takes just one phone call to reconcile the issue. Plus, if your POS system is cloud-based, support can see the exact issue you’re facing wherever they are and fix it with your permission in real-time.
A Cheaper System
In some cases, POS platforms with integrated credit card processing are cheaper than stand-alone counterparts. That’s because the business model is different: the platform price is subsidized with integrated credit card processing. However, keep in mind that it means the credit card processing rates and fees you pay may be higher than you could get elsewhere. When you spend less on the hardware, you’ll typically spend more on the processing. Over time, that can really add up. However, if your pressing need or goal is a cheaper system, integrated solutions may offer lower upfront hardware costs.
See also: How to Calculate Your POS System ROI.
Many business owners have had negative experiences with credit card processors who promise the world and then hide the true rates customers pay in complicated statements. It can be time-consuming to analyze your statement or find the right solution, but many companies like CardFellow can help you. Your POS reps should also be able to help you, essentially acting as consultants as you evaluate different systems. It’s important to take all factors into account. A point of sale system with integrated credit card processing can be a great choice for many businesses, but remember that it does mean you’ll need to change systems if you want to change processors.
Thanks for all this great information about point of sale systems. My mom is thinking of starting a business and was looking into having one of her own. I love the idea and will be sharing your tip about making sure that a point of sale system can track digital loyalty cards that can bring in extra business for her. I know that she would love the results.
Thanks for such an informative article. Your article describes that there are a number of benefits for merchants who opt for an integrated payment and POS set up. Accepting credit and debit card payments can really boost your businesses revenue, as consumers tend to spend more when using a card as opposed to cash.