Cloud-Based POS Systems vs Traditional POS: Which One to Choose?
Businesses today are continuously upscaling their ways to interact with their customers and be relevant in the market. Whether you are a small cafe owner or a large retail business, having the right Point of Sale (POS) systems can make all the difference
With the best POS system, you can enhance your business operations and manage customer data and transactions better. However, now comes the main question- Cloud-Based POS vs. Traditional POS- which one is more suited for you? Let us find out the differences between these two in this blog.
What Is A Traditional POS System?
Traditional POS systems, also known as on-premise or legacy POS, run on a closed internal network and are hosted on local servers. The software and hardware needed to operate this POS are installed on your store’s site directly.
Understand it like this: a photo or video that is locally saved on your device. Only, you can access it through the respected device
Key Features of Traditional POS System
- Installed on dedicated hardware that remains on-premise.
- Data storage on local systems eliminates any need for internet connectivity.
- The system provides strong security measures for offline transaction processing.
- Both software installation and maintenance must be handled manually when updating software.
- A substantial financial investment is necessary to establish both hardware components and software applications.
What Is A Cloud-Based POS System?
A Cloud-based POS system, on the other hand, is hosted online or on Cloud. This means the data are not stored on any one specific device but are online, so you can access it remotely and from any device.
For instance, a photo or video that is saved on Google Photos. You can access it via any device where you have logged in using that account.
Key Features of Cloud-Based POS System
- The system functions on multiple devices such as tablets as well as mobile phones and computers.
- Storing data on the cloud allows users to access it from any location at any time.
- Does not require high investment costs. Customers only need to pay for a monthly or yearly subscription instead.
- Software updates function without requiring any manual intervention because they occur automatically.
- Provides real-time data synchronization between multiple locations.
Cloud-Based POS vs. Traditional POS: A Feature Comparison
Now that we have a basic understanding of both systems let’s compare them based on key business considerations.
| Feature | Cloud-Based POS System | Traditional POS System |
|---|---|---|
| Cost & Investment | Lower upfront cost, subscription-based | High upfront cost, one-time purchase |
| Internet Dependency | Requires an internet connection (some have offline mode) | Works offline without issues |
| Data Storage | Stored in the cloud, accessible from anywhere | Stored locally on-site |
| Security & Backup | Automatic cloud backups, encrypted security | Manual backups, risk of data loss if hardware fails |
| Scalability | Easy to scale; can add new locations quickly | Scaling requires new hardware and software installation |
| Accessibility | Remote access from any device | Access is limited to the store location |
| Software Updates | Automatic updates included in the subscription | Manual updates may require IT support |
| Hardware Requirements | Low maintenance, handled by the service provider | Requires in-house IT support or external technicians |
| Best For | Businesses that want flexibility, scalability, and remote access | Businesses that need offline stability and prefer one-time investments |
Which POS System Is The Best For Your Business?
Let us now have a look at the features and offerings of Cloud-Based POS vs. Traditional POS in detail to understand it even further:
Cost & Accessibility
When using a traditional POS System, you need to pay for hardware and software upfront. Also some of these hardware and software updates might require additional investment for setting them up. This might appear costly in the long run. Additionally, you can access the services only via the dedicated device.
Cloud-based POS systems, on the other hand, come with monthly or yearly subscriptions. Some of these subscriptions also cover the monthly updates, saving a lot of your money. These POS Systems can be accessed from any device, anywhere and anytime. According to recent stats, 53% of businesses opt for cloud cost optimization services to manage the cost of cloud computing.
Hardware Installation
Traditional POS systems need a computer or terminal set up in your store itself. You also need an on-site server and purpose-built touchscreen monitor to operate them. Based on your business, you might need a cash register, receipt printer and barcode scanner, which are easy to find and purchase.
All of these will still be needed with the Cloud-based POS, but the plus side is that you don’t have to visit your store every time and can access your business from your mobile device while being anywhere.
Data & Security
Now comes the serious part- what about the data security in both these POS Systems? A lot of businesses believe that since their data is out there on the cloud, it might not be safe. The other lot, however, have a different view about this.
In a Traditional POS System, data is stored on local servers and run on a closed internal network. Therefore, there is less chance of hackers getting to your data. Additionally, the security protocols with traditional POS systems are of high standards, keeping the business data safe. However, if there’s a system failure and in case you do not have a data backup, you might lose it forever.
This is not the case with Cloud-based POS. All data is stored on remote servers and backed up automatically. So, even if the system crashes, you can update the data in real time using the backup. There is still a chance of a cyber attack, but security systems in cloud-based POS are really strong.
Maintenance
Maintenance with the traditional POS system requires technicians to visit your store physically, or it can be done via remote support. However, if there’s an error and the technicians do not arrive in time, you might have to face business interruptions.
Cloud POS systems can be maintained online with automatic software updates. Also, with real-time data updates, you can ensure your system is secure and in sync with your business. But in case there is an internal internet blackout, some updates might go missing or be interrupted. As a result, you will have to contact your provider to fix the issue.
Which One Should You Choose?
Now that we've compared the two systems let's summarize who should choose which:
Choose Traditional POS if:
- Your business has a stable structure and does not require remote access.
- You prefer a one-time investment over monthly subscription costs.
- You operate in an area with poor internet connectivity.
- You want complete control over data storage and security
Choose Cloud-Based POS if:
- You want remote access to sales and inventory data.
- You have multiple locations or plan to expand in the future.
- You prefer an affordable subscription-based model with automatic updates.
- You want real-time syncing and cloud-based data backup for security.
Final Thoughts
Both traditional and cloud-based POS systems have strengths and weaknesses. The choice between them depends on your business needs, budget, and future goals.
If you own a small business or a growing enterprise, a cloud-based POS is likely the better choice due to its scalability, remote access, and cost-effectiveness. However, a traditional POS system may be the right fit if you run a stable, single-location business and prefer local control.
The right POS system should ultimately help your business run efficiently, securely, and profitably. Take time to evaluate your options and choose a system that aligns with your long-term vision.
Author Name : Harikrishna Kundariya
Biography: Harikrishna Kundariya, is a marketer, developer, IoT, Cloud & AWS savvy, co-founder, and Director of eSparkBiz, a Software Development Company. His 14+ years of experience enables him to provide digital solutions to new start-ups based on IoT and SaaS applications.