POS Software as a Service (SaaS) applications give merchants the option to pay a monthly subscription for cloud software, rather than purchasing a traditional software license. Software updates and maintenance are included in the fee, and the merchant doesn’t have to maintain servers onsite to host the applications.

Why it Matters to your Customers

Merchants in all markets and niches are facing new competition and are adapting their businesses to meet evolving consumer demands. Purchasing a standard retail software license presents real risk when merchants may, in the not-so-distant future, require different features to support new customer engagement strategies or scale their businesses to respond to changing markets.

POS Software as a Service applications are more budget-friendly and affordable than purchasing a traditional software license. They are billed at a predictable monthly fee that includes maintenance and updates, and merchants can add features or scale with more agility than with software hosted onsite. In addition, SaaS applications are accessible from any internet-connected device, so managers can log in or access reports on sales, inventory, and labor to make informed decisions whenever needed. Merchants can also benefit from SaaS cloud backup and application security, which is often more robust than security solutions they would typically use with applications hosted in the back office.

Why POS Software as a Service is an Opportunity

With the overwhelming shift in this industry to software delivered through the SaaS model, many traditional ISVs are now developing new solutions born in the cloud and offered on a SaaS basis. Some ISVs have formed partnerships with point of sale (POS) hardware vendors or payment companies, which allows you to offer total, integrated solutions. SaaS offerings for retailers or restaurateurs can include features such as loyalty program software, gift cards, digital signage management, online ordering, and online reservation systems, which you can bundle with POS Software as a Service to increase recurring revenue or include as a value-add. You can also expand your offerings to include POS Hardware as a Service, to provide POS terminals and peripherals on a subscription basis bundled with retail or restaurant SaaS solutions.

Additionally, some payment processing companies have begun partnering with hardware and software companies to create POS-as-a-Service bundles. One benefit of such a bundle is that the upfront costs of the solution are partially or wholly covered by the participating vendors, lessening or removing the cash flow challenge for you, the solution provider.

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