Are You Really Considering A Free POS?

‍You get what you pay for is an adage in almost every aspect of life, and the world of point-of-sale (POS) systems without exception. While a "free" POS system is tempting for small business restaurants and retail owners on a tight budget, the reality is often far more complex.

There's no such thing as a free lunch or POS. A free POS may promise to offer POS systems for no cost but often hide significant costs.

1. Masked Hidden Fees

You might like the idea of a "free" POS system as a small store. However, after a year of operation, you realize that the transaction fees and monthly charges have far exceeded what you would have paid for a reliable POS solution. Some of the places you have to keep track of to check if you are paying more than agreed upon are:

• Unknown transaction fees: Even if the hardware and software are free, you'll still incur fees for every transaction processed. These fees can vary from 2.3% per transaction to 3.5% and above. This will include merchant, bank, interchange, and MSP/Reseller fees—and add up quickly, especially for businesses with high transaction volumes. This can be a big sum. 
• Check your monthly fees: Many "free" POS providers charge recurring monthly fees for ongoing support, maintenance, or other services that are not disclosed during onboarding. 
• Beware of early termination fees: If you switch to a different POS system before the end of your contract because support is nonexistent and issues pile up, you will face hefty penalties. I suggest reading through contracts, dotting the Is, and crossing your Ts. 

1.1 Unfolding the Credit Card Processing Fees

Credit card processing fees are one of the most significant hidden costs of "free" POS systems. These fees vary based on factors like:

• Higher transaction volumes typically result in lower rates.
• Some industries, such as high-risk merchants, may face higher rates.
• Processing fees for credit cards are generally higher than debit cards and definitely NOT free.

Consider this: A small retail business processing $10,000 in credit card transactions per month might be lured by a 'free' POS system offering a 2.75% processing rate. This would mean $275 in monthly processing fees. In 5 years you would have spent $16500 covering the cost of hardware, software, maintenance and more! However, a reliable POS provider might charge you for hardware and software but offer a 2.25% rate, resulting in a monthly saving of $50 and savings of 5 years would be $13500, saving you $3k. Over time, this could add to significant savings, making the reliable POS provider a more cost-effective choice.

It's crucial to understand that the processing fee is charged by the banks, not the POS providers. The providers simply mark up this fee to cover their costs. This knowledge can help you make a more informed decision when comparing different POS systems and avoid any unexpected financial surprises. 

2. Limited Features and Functionality

• Only basic features: Free POS systems often offer limited features compared to paid options, hindering your business's ability to grow and adapt. Either you can only manage some types of payments under the “free” plan, or features like KDS or Inventory are add-ons at premium pricing. 
• Costly add-on features: We have always found that paid add-ons are recurring purchases that often include much-needed hardware and integrations for an extra charge. 

• No customization option: You may not be able to customize the system to fit your specific needs, leading to inefficiencies and frustration.
• Lack of ownership: You are not actually the owner of the hardware or software, which limits your control and flexibility. And customer support is nearly nonexistent. 

3. Vendor Lock-In

• Limited flexibility: Once locked into a free POS system, switching to another provider without incurring significant costs can be difficult.
• Lack of control: You may have limited control over your data and business operations, as the vendor holds the reins.

Example: A business that signs a five-year contract with a "free" POS provider might face a hefty early termination fee if they decide to switch to a different system before the end of the contract.

4. Inadequate Support

• Slow response times: Free POS providers often have NO or limited resources for customer support, leading to slow response times and difficulty resolving issues.
• Lack of expertise: The support team may not have the experience or knowledge to address complex problems.

5. Onboarding and Implementation Costs

While the initial hardware and software might be "free," the costs associated with onboarding and implementation can quickly add up. These expenses include:

• Data migration: Transferring your existing data to the new POS system.
• Training: Training your staff on how to use the new system.
• Customization: Tailoring the system to your specific business needs.

Example: A restaurant switching to a new POS system might incur costs for data migration, training their staff on the new software, and customizing the system to accommodate table layouts and split checks. These expenses can easily exceed $1,000.

By understanding these hidden costs, you can make an informed decision about whether a 'free' POS system is truly the best option for your business. In many cases, investing in a premium POS solution with transparent pricing and comprehensive support can ultimately save you money and provide greater value, offering the reassurance and confidence that comes with reliable support.

Cost of Ownership of a POS Solution in 2024 for North America

OnehubPOS offers a flexible pricing model that caters to various business needs. While specific costs may vary depending on your location, business size, and required features, here's a general overview of OneHubPOS pricing.

Subscription-Based Pricing

• Monthly or Annual Plans: OnehubPOS typically offers subscription plans as low as $50 per month, where you pay a recurring fee to access the software and its features.
• Add-ons: We are very conscious of our pricing and have limited our advanced add-ons at an affordable cost of $25 - $150 per month for add-ons like Kiosks, Customized dashboard, KDS, Delivery solutions and more. 

Payment Processing Fee

• OneHubPOS is a payment-agnostic POS provider. We can easily integrate with your existing provider without hassle and maintain the fees paid. 
• We also provide comprehensive payment solutions at the lowest processing fee of 2.3%. We commit ourselves to transparent pricing and simple pricing structures. 

Hardware Costs

• Hardware: The type of POS hardware you choose (e.g., tablets, smartphones, dedicated terminals) can impact the overall cost. We ship fully tested Android hardware for you to own, use, and reuse. This will cost you one time anywhere between $1000 - $10000 depending on the devices. 

POS Free Trials and Demos

OnehubPOS provides free trials and demos to allow potential customers and partners to test the software and assess its suitability for their business. To get a precise quote for OneHubPOS, connect with us.