Most POS Hardware And Software Providers Compete for Just a Sliver of Retailers

Contrary to what many may suspect, price is not the top reason retailers switch from one point-of-sale provider to another, according to a study from Capterra Inc., a business-software review site.

In a survey of more than 400 merchants, 34% cited a POS system’s lack of necessary features as the reason for switching, followed by poor customer support, 27%, and only then high price, 26%.

Many retailers, such as bicycle shops, restaurants, grocers and gift shops, have specific needs for selling and managing their inventories. A generalized POS system may not fulfill their requirements, says Cara Wood, marketing associate at Arlington, Va.-based Capterra who conducted the survey.

The most favored POS software is QuickBooks POS from Intuit Inc., used by 18% of respondents, followed by Square Inc., 12%, IBM Corp.’s SurePOS, 12%; and NCR Corp., 11%. Others included 4POS, 7%, and Shopify, 6%. The remaining 34% was splintered among all other POS software providers.

QuickBooks and Square target small businesses, which tend to make them a popular choice, Wood says. The popularity may also stem from the fact there are simply so many small businesses, Wood says. There are an estimated 28 million small businesses in the United States, according to the Small Business Administration.

Capterra also found that companies tend to buy POS hardware at different times than they buy POS software. Thirty-four percent said they purchased software within the past year, but only 19% of respondents bought hardware during the same period.

Even among the 29% of companies that purchased POS software one to two years ago, a difference exists, with 36% saying they bought POS hardware during that time.

“It may be that some companies first purchase new hardware thinking, perhaps, that the slowness in their software is caused by hardware, only to discover post-purchase that the software is out-of-date and still needs to be updated,” Wood says. The reverse may be the case for other companies.

Capterra also found that mobile POS systems are used by far more small-to-mid-size businesses than larger ones, with 79% of mPOS systems used by the former and 21% by the latter.

“For the most part, large retail businesses have not hopped on the mobile POS train,” Wood says. Their size may make it difficult to change systems, but at the same time mobile tends to provide a better shopping experience, she says. Mobile POS devices can roam the aisles, enabling consumers to pay for purchases without queuing up. “For young shoppers, mobile POS devices are friendly-looking devices,” she says.

The survey found that Apple Inc.’s iPad is the most popular mPOS device, accounting for 37% of hardware, followed by Android smart phones at 28%, iPhone, 23%, non-Apple tablets, 11%, and other, 1%.

The iPad’s popularity is probably because of its branding and it’s the only brand of tablet that POS vendors make accessories for, Wood says. Android smart phones, similarly, are used most for POS because of their widespread consumer popularity.