Embedded POS Innovations Are Reshaping the Way Main Street Does Business

The days of the old-school cash register are numbered. They may even already be over.

The final note on their obituary? It’s the fact that embedded financial services and point of sale (POS) solutions that span both online and offline transactions are transforming the way of the road for Main Street businesses such as small retailers, restaurants and service providers.

From contactless payments to integrated customer loyalty programs, emerging POS innovations are more than just transactional tools — they’re becoming the nerve centers for business owners looking to streamline operations and engage customers.

With the news that U.K. FinTech Revolut is launching a POS terminal for merchants in the U.K. and Ireland that integrates with Revolut business accounts, providing quick access to funds and advanced analytics tools as well as real-time and account-to-account (A2A) payments, small businesses are finding that today’s payments landscape is full of advancements.

Read more: 71% of Merchants Expect Software to Replace Traditional Point-of-Sale Terminals

Traditionally, POS systems were limited to processing payments. Their role was to facilitate transactions swiftly and securely, which sufficed in a market where cash and basic card payments dominated. However, the evolution of digital payment options and increasing consumer expectations for seamless, omnichannel experiences have driven businesses to seek more versatile solutions. Modern POS systems have thus evolved into multi-functional platforms that integrate payments with inventory management, customer relationship management (CRM) and analytics.

“Smart POS terminals are starting to merge payment functionalities with inventory management, loyalty programs, and personalization,” Julie Malikayil, senior manager, payments products at Discover Global Network, told PYMNTS, noting these software-based solutions offer businesses a way to integrate multiple functions into a single mobile device, simplifying operations and improving the customer experience. “The barrier to entry is super low … mom-and-pop shops and individual vendors can simply download an app and start accepting payments,” Malikayil said.

A PYMNTS Intelligence report, “How SoftPOS Is Poised to Revolutionize Payments,” done in collaboration with Discover Global Network, reveals that that traditional POS systems come with pain points that can impede business growth, including high costs, limited payment options and poor data analytics capabilities. Setting up a traditional POS system often requires a hefty investment, ranging from $3,000 to more than $10,000 annually for maintenance, a barrier that can deter small businesses.

Additionally, traditional POS devices struggle to keep pace with emerging payment methods, making it difficult for businesses to offer a wide array of payment options. Against this backdrop, the rising consumer preference for contactless payments and other innovations is expected to fuel explosive growth in alternative POS technologies.

See also: Apple Pay’s Future Growth Hinges on Consumer Usage More Than Merchant Adoption

For consumers, the appeal lies in the convenience and speed of these payment methods, while businesses benefit from faster transaction times and reduced handling of cash, which lowers the risk of theft and fraud. The integration of contactless technology also opens opportunities for businesses to enhance the overall customer experience by reducing wait times and creating a frictionless checkout process.

As Mehret Habteab, SVP and head of products at Visa Europe, told PYMNTS, in the U.K., the rise of open banking has led to heightened consumer expectations of choice and power over their transactions.

The rise of eCommerce and omnichannel retail has also pushed Main Street businesses to adapt their operations beyond the physical storefront. Today’s POS systems often include integrations with eCommerce platforms, allowing businesses to manage online and in-store sales from a single system. This seamless integration is crucial as consumers increasingly expect businesses to offer a consistent shopping experience, whether they are purchasing online or in person.

Doug Brown, chief product officer of digital banking at Candescent (formerly NCR Voyix), told PYMNTS that done correctly, embedded finance solves a pain point for merchants as well as issuers — namely cart abandonment.

At the same time, competition in the space is heating up. As PYMNTS’ Karen Webster noted on Tuesday (Oct. 22), opening Apple’s NFC chip to rivals is now possible with the release of iOS 18.1. Now any wallet that is an app on the iPhone can be used to pay at the physical point of sale. That creates new competition for Apple Pay at the in-store point of sale. There are early signs that PayPal, with its cross-platform digital wallet as an app on the iPhone, may be getting some in-store traction. Anyone with an iPhone and a PayPal app can now pay at the point of sale and online — just about anywhere they shop now — using it. PayPal counts 278 million users in the U.S. who have PayPal wallets now that they can use on and offline to shop and pay.

In addition to creating wallet competition in-store, access to the iPhone NFC SE creates an advantage for apps and wallets that are cross-platform and cross-channel. This is particularly important for the growing number of Click-and-Mortar shoppers who want the same experience shopping in-store as they do online. That includes shopping history and order history, regardless of whether a purchase was made in a store, in an app or on a web site.

Ultimately, by evolving from simple transaction processors into comprehensive business management platforms, modern POS systems are helping Main Street businesses enhance efficiency, gain customer insights and create personalized experiences that drive growth. As these technologies continue to develop, Main Street’s embrace of POS innovation will be crucial for its ongoing success and resilience in the digital age.

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