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Payment Processing & Your POS System. Do They Have to Be Integrated?

Posted by PointOfSale POS on

Do Payment Processing and Your Point of Sale (POS) System Have to Be Integrated?

In most cases, payment processing and your POS system do need to be integrated to ensure smooth, efficient, and secure transaction handling. However, there are options for both integrated and non-integrated setups. Let's break down the benefits and best options for both scenarios.

Why Integration is Often Best for POS and Payment Processing:

When payment processing and POS systems are integrated, you get a seamless flow of transaction data, reducing the chances of errors, simplifying reconciliation, and improving customer experience. Here are the main benefits:

  1. Efficiency and Speed: Integrated systems eliminate the need for manual data entry, as payment details are automatically sent to the POS system. This speeds up the checkout process, allowing for faster transactions.

  2. Automatic Reporting: With an integrated system, transaction data, including sales, taxes, and tips, is automatically recorded in your POS system. This reduces the need for separate reports and ensures accuracy in your financial records.

  3. Real-Time Inventory Updates: Some POS systems integrate with payment processors to update your inventory in real time. This ensures that when an item is sold, the stock count is immediately adjusted, preventing overselling or stock discrepancies.

  4. Enhanced Security: Integrated payment processors are often designed to meet PCI-DSS (Payment Card Industry Data Security Standards) compliance, ensuring the security of customer payment information.

  5. Streamlined Customer Experience: With everything connected, your customers can enjoy a more seamless experience, especially for payments, receipts, loyalty programs, and refunds.

Best Options for Easy Integration:

If you're looking for easy integration between your POS and payment processor, many modern POS systems come with built-in payment processing capabilities or seamless integration options with trusted payment processors. Here are some of the best integrated solutions:

1. Square POS + Square Payment Processing:

  • Overview: Square is one of the most popular POS systems, particularly for small to medium-sized businesses. It integrates its own payment processor directly into its POS system, making the setup process incredibly simple.

  • Why It Works Well: Since both the POS system and payment processing come from the same company, integration is immediate and frictionless. It’s particularly useful for businesses that want an easy, all-in-one solution without worrying about separate contracts or configurations.

  • Key Features:

    • No monthly fees (only transaction fees).

    • Integrated inventory tracking.

    • Simple reporting tools.

    • Payment acceptance for card swipes, EMV chip cards, and mobile payments.

    • Real-time sales tracking.

2. Toast POS + Toast Payment Processing:

  • Overview: Toast is a POS system built specifically for the restaurant industry. It offers both POS and payment processing services, making integration seamless for businesses in the food service industry.

  • Why It Works Well: Toast’s POS system is designed to work exclusively with its own payment processor. This integration ensures smooth transactions and deep reporting tools catered to restaurant businesses.

  • Key Features:

    • Easy-to-use interface for restaurant staff.

    • Built-in features for online ordering, delivery management, and loyalty programs.

    • Real-time menu management.

    • 24/7 customer support.

    • Transparent, flat-rate processing fees.

3. Lightspeed POS + Lightspeed Payments:

  • Overview: Lightspeed is a robust POS system suitable for a wide variety of businesses, from retail to restaurants. It offers a built-in payment processing solution that integrates seamlessly with the system.

  • Why It Works Well: The integrated solution streamlines payment processing, inventory tracking, and reporting. The system is especially popular among medium to large-sized businesses.

  • Key Features:

    • Multi-location support.

    • Powerful inventory management.

    • Real-time analytics and reporting.

    • Integration with accounting software.

    • Customizable pricing plans based on business needs.

4. Clover POS + Clover Payments:

  • Overview: Clover POS is an adaptable system that allows businesses to choose the hardware and software that best suits their needs. It has its own payment processing system that integrates directly with the POS software.

  • Why It Works Well: Clover’s hardware is customizable, so businesses can choose a countertop POS, mobile POS, or a more advanced setup depending on their needs. The payment processing integration makes it easy to manage payments, reporting, and other business operations in one platform.

  • Key Features:

    • Simple interface and setup.

    • Supports multiple payment types (cards, mobile wallets, etc.).

    • Customizable hardware options.

    • Advanced reporting features.

    • Integrated loyalty programs.

What if You Don’t Want to Integrate POS and Payment Processing?

If you prefer not to have your POS and payment processor integrated, there are still many options available, though there may be additional manual work involved.

Non-Integrated Setup:

In a non-integrated setup, you would use a POS system from one provider and a separate payment processor (like PayPal, Stripe, Authorize.Net, etc.) for handling customer payments. This means that orders made in the POS system need to be manually entered into the payment processor, or you may use separate terminals for processing credit card payments.

Best Non-Integrated Payment Processing Options:

  1. PayPal Here (with any POS system):

    • Overview: PayPal Here allows businesses to accept card payments via a mobile device or tablet. While PayPal Here doesn’t directly integrate with all POS systems, you can use the PayPal reader and manually sync payments with your POS.

    • Best For: Small businesses that want a simple, low-cost payment solution without full integration.

    • Key Features:

      • Easy to use and set up.

      • Accepts a wide variety of payment methods, including PayPal, credit/debit cards, and mobile wallets.

      • No long-term contracts.

  2. Stripe (with third-party POS systems):

    • Overview: Stripe is a highly flexible payment processor that supports online and in-person payments. While not directly integrated with every POS, Stripe can work with third-party POS systems via middleware or by manually inputting payments.

    • Best For: Businesses looking for online and in-person payment processing but without an integrated POS solution.

    • Key Features:

      • Wide international coverage.

      • Robust fraud prevention and security.

      • Easy-to-use API for developers to integrate payments with websites or apps.

  3. Worldpay (with third-party POS systems):

    • Overview: Worldpay is a leading global payment processing solution used by many businesses. It can work with many POS systems, though you may need to use a third-party application to link it with your POS.

    • Best For: Larger businesses or those processing high transaction volumes that prefer non-integrated solutions.

    • Key Features:

      • Multi-currency support.

      • Secure payment processing with PCI DSS compliance.

      • Extensive reporting and analytics.

Pros and Cons of Integrated vs. Non-Integrated Payment Processing:

Integrated Payment Processing Non-Integrated Payment Processing
Pros Pros
- Seamless operation, reduces manual work. - Flexibility in choosing different systems.
- Real-time inventory and reporting updates. - Can use the POS and payment processor separately for more customization.
- Easier tracking and reconciliation of payments and sales. - Lower upfront costs, especially if you're already using a third-party payment processor.
- More secure, with PCI-DSS compliance built-in. - Can choose best-in-class payment processor without being tied to a specific POS system.
Cons Cons
- Limited flexibility with payment processors (you're tied to the POS provider's processor). - Manual entry of payment info into the POS system.
- May have higher processing fees (depending on the provider). - Potential for human error and slower checkout.
- May not support as many third-party features or integrations. - Separate reporting and reconciliation for POS and payments.

Conclusion:

  • Integrated Payment Processing is typically the best choice for most businesses due to its convenience, speed, and accuracy. By using a POS system that integrates with payment processing, you reduce manual effort, improve data accuracy, and streamline your operations.

  • If you prefer not to integrate, non-integrated solutions are also viable, though they may require more manual work and can lead to inconsistencies in reporting. Non-integrated systems are useful for businesses with specialized payment needs or those that need maximum flexibility.

Best Options for Integration:

  • Square POS + Square Payments: Great for simplicity and small to medium-sized businesses.

  • Toast POS + Toast Payments: Perfect for restaurants with delivery integrations.

  • Lightspeed POS + Lightspeed Payments: Ideal for retail and larger operations with complex needs.

  • Clover POS + Clover Payments: Great for businesses that need customizable hardware.

Best Non-Integrated Payment Processors:

  • PayPal Here: Simple solution for smaller businesses.

  • Stripe: Best for tech-savvy businesses that need flexible online and in-person payment solutions.

  • Worldpay: Ideal for larger businesses that prioritize global reach and robust features.

Ultimately, the decision between integrated and non-integrated payment processing depends on your business's specific needs, preferences, and budget. Integrated systems are the most efficient, but non-integrated systems can offer flexibility in certain circumstances.

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