Choosing the payment methods that best suit the needs of your online store is not easy, but this step can make your business go further. Due to constant advances in technology, any e-Commerce can have efficient payments with robust solutions and focus on the most important areas of business.
There are many methods and alternatives to select from, but today we will only talk about one of them: the POS. It is important to know in depth what it is, what it is used for, as well as its functionalities and features. If you are going to join us, the tour starts right here: the e-commerce locomotive runs at full speed. GO!
What is a POS and what is it for?
The acronym POS refers to ‘point of sale terminals’ and, although you may have heard of it in any bar or restaurant to mention a dataphone with which you pay for drinks or food, it is much more than that.
The POS is a computer system with which we can manage the entire sales process -invoices, tickets and more- and management operations are carried out through a reference number or code. In short, the POS is a useful tool to organize and speed the tasks involved in sales processes, increasing card charges and reducing cash in trade. Furthermore:
- It rises the number of buyers, since not needing to always carry cash with them is a convenience;
- when it comes to online shopping, the possibility to make secure payments builds customer confidence;
- it saves time. You no longer have to worry about cash reconciliation at the end of the day or going to the bank every morning to deposit what you have charged;
- it facilitates the management of your business and billing control, without having to go to your bank. You can do it through its website;
- it decreases the risk of theft of cash in your store.
If you sell products or offer any type of service, it can be very convenient for your clients to pay by card. However, you cannot charge them directly through their credit or debit cards. First of all, you need to request a POS from your bank, and the entity will be in charge of checking data and validating sales. Do you have an online business? In this case, you would usually need a virtual POS, also called a virtual ATM.
With this device, you can collect and issue tickets in an integrated way on the website from which you offer your products or services, or as part of a payment gateway with multiple methods. Your customers will appreciate the security of card payment, since the POS guarantees the delivery of encrypted data to financial institutions, and these are also not known to the seller.
Once the POS is given, it also provides you with a package of programs to be installed on the server hosting your e-commerce. When clients make a purchase, they fill in the requested information (name and surname, expiration date, card number). The bank quickly checks this data and the existence of funds associated with the account, charging the customer and crediting the amount paid to the merchant.
An easy process, right?
Before implementing this tool, you first need a bank account where the payments received by your e-Commerce will be credited. The main components and features of the virtual POS are:
- Users enter their card details on the payment gateway.
- The payment gateway is the platform through which the POS operates, and it is a financial service offered by banks.
- The POS must accept payments from any type of credit or debit card (American Express, Mastercard, Visa, etc.).
- The security of this payment method has to be guaranteed through the encryption of the transmitted data. The e-Commerce does not have access to this information.
- The virtual POS payment gateway must be accessible from any device, including Smartphones, computers or tablets.
- It must allow other financial operations to be performed in the online store, such as the refund either in part or complete of amounts.
The costs generally include an opening amount, a monthly maintenance cost and commissions for its use.
What are the advantages of using a physical or virtual POS?
When we talk about a physical POS for shops, its major advantages are:
- Improvement of the business image because commercial establishments applying technology are considered to be more modern, efficient and professional by consumers, especially the new generations of millennials (Y) and centennials (Z).
- More effective business management, as some routine and repeated tasks can be automated.
- Increased control of the stock, since the computer system allows to know at all times the entries and removals of products from the warehouse, mainly in hotel business.
Conversely, with respect to a virtual POS for online shops and businesses, the main benefits include:
- payment security, since it generates more confidence to buyers thanks to encryption and use of SSL security certificates;
- it reduces non-payment by debiting charges in the buyer's account instantly;
- it is a method widely used by consumers of e-commerce because almost everyone has a credit or debit card. Therefore, it will also be very easy to use;
- the seller will be able to access a web administration panel to consult or take different actions: make returns, check cancellations and its reasons, view the number of payments received in X period, etc.
POS as a conclusion
If you need to accept payments from clients from different geographical locations, it is most likely that each one has their own methods. Adapt to them! The POS is a complete and effective universal alternative to sell your products online, collect your sales directly, connect with multiple forms of payment, save time and earn your customers’ trust. Anyway, it is not the only option.
If you want to discover other payment methods, join us every week on our blog and don't miss any news!