Point of sale (POS) system.

In plain English

A point of sale system is the combination of terminal, card reader, and software that completes a purchase where it happens, whether that is a counter, a table, or a phone. Modern systems do far more than take payment: they track inventory, record tips, split checks, apply discounts, and feed sales data into accounting. On the payment side, the terminal reads the chip, tap, or stripe and sends the encrypted transaction to the gateway and acquirer. Pricing usually combines hardware cost, a monthly software charge, and a percentage of every sale.

01Why it matters

For a small business this is one of the largest recurring costs of taking money at all, and the software lock-in makes switching later harder than the opening quote suggests.

02The math, step by step

Say a system costs 79 dollars a month plus 2.6 percent and 10 cents per transaction. On 20,000 dollars of monthly sales across 600 transactions, that is 79 plus 520 plus 60, about 659 dollars a month, or roughly 3.3 percent of sales.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

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