Guide on Point of Sale (POS) systems for NZ businesses

What does POS mean? No. It’s not an expletive-laden slur, at least not in this context. In the business world, POS stands for “Point of Sale,” a modern digital system with specialised software that handles in-person payments and simplifies accounting.

In today’s post, we’re covering all things POS, including definitions, systems, features, setups, and software integrations.

What is POS? (Point of Sale)

Think of the POS system as a modern alternative to the old-school cash register. Instead of loading it with notes and coins, POS systems accept card or mobile wallet payments, while built-in software calculates GST, processes the transaction, and updates inventory.

Like a cash register, the POS system usually sits at the front of the store, where customers queue to pay for their wares. Accessories like barcode scanners and contactless card readers speed up proceedings.

Types of businesses that benefit from POS systems

Most in-person businesses in New Zealand use POS systems.

• Retail: Newsagents, fashion boutiques, specialty stores, department stores
• Hospitality: Restaurants, cafes, pubs, hotels, fast food outlets
• Services: Florists, hairdressers, nail salons, pet groomers
• Tradespeople: Plumbers, electricians, gasfitters, mechanics
• Omnichannel retailers: Large companies that sell products online and in-store.

The ideal type and accessories vary by industry and business. For example, a sole-trading sparkie might want a cloud-based mobile POS with a card reader, while a busy independent newsagent may prefer an on-premise countertop system with a receipt printer and cash drawer.

POS systems vs. traditional cash registers

The manual cash register is an older, near-obsolete technology that harks back to when cash was king. Also known as a till, these simplified mechanical devices can ring up cash sales, store currency, and track payments. Staff may need to memorise item prices or hit certain buttons to finalise a sale – they’re prone to human error.

Some cash-only, low-volume businesses still use manual cash registers due to their simplicity and low upfront costs. More advanced electronic cash registers (ECRs) feature a digital display with a barcode scanner and can automatically calculate totals.

POS systems, on the other hand, can support multiple payment methods, including cash, vouchers, Buy Now Pay Later, and contactless payments. Many also have advanced analytical tools for inventory management and reporting.

Cloud vs on-premise POS

Cloud-based and on-premise POS systems offer unique pros and cons.

The traditional approach is on-premise POS, where data is stored securely within the terminal or a dedicated in-house server. On-premise POS has a higher upfront cost for hardware and one-off software licensing, but doesn’t have ongoing subscriptions.

On the downside, remote access isn’t possible, it’s harder to scale, and on-premise systems don’t communicate with other branches.

Cloud POS is the more common and modern alternative with lower upfront costs. Managers can access data from anywhere, and the system scales more easily as multi-branch or omnichannel businesses expand. Many include automatic updates, tech support, and training.

The main downside is a hefty subscription fee. You also get less control over how data is accessed and stored, and will be entirely reliant on a stable internet connection.

How do POS systems work?

POS software adds scanned items, subtracts discounts, calculates GST, and confirms the final price. Upon receiving payment, it reconciles the transaction and generates a paper or email receipt.

Many POS systems update inventory and send alerts when stock levels drop. Managers can track sales, retrieve customer details, and view real-time sales reports.

Most Kiwis pay via an EFTPOS card reader, which supports contactless card or mobile wallet payments. The POS system communicates with the customer’s bank to verify sufficient funds and initiate the transaction. Some EFTPOS transactions settle instantly, but others may take up to 3 days. Many businesses factor in such delays when managing cash flow.

Some POS systems also include a secure cash drawer. The POS calculates the correct change and may lock the drawer in-between transactions.

For omnichannel businesses that trade both online and offline, some POS systems can integrate with e-commerce stores.

Here’s a standard POS workflow:

1. The vendor scans the items, and the POS system calculates the total price (or the vendor manually enters it).
2. The customer reviews the price and tells the vendor whether they prefer paying by cash or card.
3. The customer taps their card or mobile phone on the EFTPOS card reader or pays in cash.
4. The EFTPOS terminal communicates with the customer’s bank to verify funds and begin the transaction (or the vendor returns the correct change calculated by the POS system).
5. The POS terminal prints a tax receipt (or sends a digital receipt to the customer’s email address)
6. The POS system records the transaction and reconciles the sale.
7. The manager later reviews sales reports to assess best-sellers and overall business performance.

Common types of POS systems in NZ

Modern POS systems come in different shapes and sizes to suit varying business needs. Almost all have built-in card readers for contactless payments.

• Countertop: A bulky desktop terminal with a touchscreen display that staff use to review purchases, add items, and finalise the sale – good for high-traffic stores in retail and hospitality.
• Tablet: A standard iPad or Android tablet with POS software for staff or customers to make orders and confirm a sale – good for budget-conscious businesses, especially common in hospitality.
• Mobile: Custom-built handheld devices or small smartphones with an attached card reader – good for mobile vendors like tradespeople or market stall owners.
• Kiosks: Self-service touchscreen menus with an attached card reader so customers can pay autonomously – popular with big fast food franchises, supermarkets, and department stores.

Kiwi businesses can purchase or lease POS systems from a manufacturer, payment processor, or through a New Zealand business bank.

Common POS accessories

Businesses can add accessories to existing POS systems or purchase them from day one.

• Card readers: Crucial, as over 88% of Kiwis make contactless payments each year.¹
• Cash registers: Important even today, as 57% of Kiwis still use cash for everyday purchases.²
• Barcode scanners: Busy retail stores use barcode scanners to improve speed and accuracy at checkout.
• Receipt printers: Many businesses incorporate receipt printers into their POS systems.
• Rear-mounted screens: Some stores mount a screen facing away from the POS so customers can review items as they are scanned.

Various brands sell POS accessories in New Zealand and around the world. Many businesses use accessories from the same POS brand to ensure compatibility.

Key considerations when purchasing a POS system

Consider the following when shopping for a POS system.

• Costs: What is the total cost of ownership, including upfront, subscription, and per-transaction payment processor fees?
• Type: Would a countertop terminal, tablet, mobile or kiosks suit your business?
• Accessories: Do you need card readers, barcode scanners, or cash registers? Can you add these accessories later if required?
• User interface: Is the UI simple enough for your staff to learn?
• Software: Some POS software is specifically designed for certain industries, such as hospitality or retail.
• Cloud vs on-premise: Which works best for your business?
• Inventory management: Do you need to review inventory in real time and receive notifications when stock is low?
• Reports: Would your managers benefit from sales reports?
• Software integration: Does the POS integrate with your accounting software or client relationship manager?
• Offline trading: Will your business still operate if the internet goes down?
• Security: Does it meet Payment Card Industry Data Security Standards (PCI DSS) and have end-to-end encryption?
• Support: Is adequate technical support and training available?

How to set up a POS for your New Zealand business?

The POS set-up process varies between systems and businesses, but you can expect something like the following:

1. Define your requirements – think about industry, volume, shopfront layout, scalability
2. Select your POS – compare competitors to find the best fit.
3. Establish payment processing – create a merchant account with a bank or payment processor.
4. Set up your system – create staff accounts, import product lists, configure GST, and connect the POS to your accounting software and CRM.
5. Testing – perform trial transactions for payments and refunds to ensure everything works smoothly.
6. Training – teach your staff how to use the new system.

Common POS challenges

The POS system is an indispensable tool for most in-person businesses. But there are a few challenges to consider.

• High costs: Hardware is expensive upfront, and cloud POS has significant ongoing subscription fees.
• POS Integration: Not all systems integrate with all accounting or CRM applications.
• Performance: Some high-volume businesses experience lagging or freezing during peak periods.
• Steep learning curve: The more complex systems take time to get your head around.
• Internet-reliant: Slow connections and internet outages will disrupt sales.
• International card fees: Payment processors and card schemes may charge high fees for international cards.

Wise Business: Simplifying International Payments for New Zealand Businesses

While a modern POS system streamlines your physical checkout, the way you manage those funds behind the scenes is just as important for your bottom line. Accepting international cards or dealing with tourist spend often leads to high conversion markups and hidden costs from traditional banks.

Expanding a business globally opens up exciting opportunities, but also new challenges like receiving payments across borders. Hidden foreign transaction fees and hefty currency conversions involved with international payments can eat into your profits and time.

Wise Business serves as a cost-effective solution where you can receive money from around the world at the speed and price of local payments.

Transform the way you receive payments with Wise Business:

• One-time fee of 40 NZD for local account details in 8+ currencies, including AUD, NZD, USD, and more—no recurring fees
• One account to hold, send, and convert money with no hidden fees or exchange rate markups
• Create and send professional invoices directly to your customers through Wise Business
• Create payment links to request money in specific currencies
• Seamlessly receive payments from customers, online sales, or PSPs like Stripe and Amazon.
• Wise is safe and secure - Trusted by 13 million people and counting

Sign up for the Wise Business account! 🚀

This general advice does not take into account your objectives, financial circumstances or needs and you should consider if it is appropriate for you.

---

FAQs

What POS system types are available in New Zealand?
The main POS types are countertop terminals, tablets, mobile devices, and self-service kiosks.

What POS accessories do I need?
The most important accessory is the card reader. Other options include cash drawers, receipt printers, and barcode scanners.

Is cloud POS better than on-premise POS?
It depends on your needs. Cloud-based POS is more popular due to its lower upfront costs, scalability, and flexibility.

What is a POS system?
A POS system is a hardware-and-software combination designed to calculate, process, and reconcile in-person payments.

What is the best point of sale software in NZ?
It varies between businesses. Some small Kiwi businesses prefer Square, while some omnichannel brands might like Shopify.

---

Sources:

1. Payments NZ: Consumer research card payments
2. Reserve Bank of NZ: Cash use survey