GUEST POST: Tillie Demetriou (Epos Now)

If you’ve just opened a new retail or hospitality business, whether it’s a brick-and-mortar retail store, a trendy café or restaurant, or an online store, someone has probably told you, “You need a POS system.”

So, you start looking into it, and suddenly, there’s a decision to make. You have to decide between two types of something you may have believed was just a simple cash register. Those two types are cloud-based POS and traditional POS.

Both have their pros. Both have their cons. One offers flexibility, the other reliability. One is all about real-time access, the other keeps things simple and straightforward.

So, how do you know which one is right for your business? Let’s get into it.

What Is a POS System?

Now, to make that all-important decision about which type of POS system to choose, you first need to understand what a POS system is.

Definition of a POS

A point of sale, or POS, is where a business takes payments. Walk up to a checkout counter, tap your card, or click Buy Now online, that’s the POS in action.

Now, for over a century, POS meant one thing: a cash register. The first one was built in 1879 by an Ohio saloon owner called James Ritty. He was getting really tired of his staff slipping cash into their own pockets, so he invented a machine that he coined the ‘incorruptible cashier’ that recorded every sale as it happened. It worked. And that basic idea is essentially still what POS systems do today.

Now fast forward in time to 1992, where Microsoft Windows launched the first POS software, marking a shift from mechanical registers to digital systems. A decade later, the first cloud-based POS emerged, changing the game again.

Now, businesses have more options than ever.

Why Cloud POS?

A traditional POS system stores everything (we’re talking your sales, inventory, and customer data) on a local computer or server. That works fine until something goes wrong. Anything from a power outage, hardware failure, or even a spilled latte could wipe everything out in seconds.

Cloud-based POS systems solve that problem. Instead of storing data on a single machine, they send it to the cloud (a secure online network that keeps everything backed up). As long as you have an internet connection, you can access everything from anywhere.

Benefits of Cloud POS Systems

Keeping your data safe is just the beginning. A cloud POS comes with a bunch of other benefits that make running a business easier and more efficient.

Faster service: If a server has to run back and forth between tables and a POS terminal, mistakes happen. Time is wasted. With a cloud system, orders go straight from a tablet to the kitchen. No extra steps. No confusion. Just faster service and happier customers.
Always up to date: Traditional POS systems need manual updates, which often require you to work with an IT expert. Some businesses skip updates altogether, leaving their data vulnerable. Others risk losing info when an update goes wrong. Cloud POS systems update automatically. The latest security fixes and features are always in place, and even if a device resets, all the data stays safe in the cloud.

Real-time reports: Want to know which of your products are selling best? How is your staff performing? When are your busiest hours? A cloud POS gives you instant access to reports from any device. This helps make better business decisions faster.
Flexible pricing: Cloud POS systems usually come with either a flat fee or a subscription plan. Businesses can scale up or down depending on their needs. Need more features? Upgrade. Not using certain tools? Downgrade.
Custom integrations: Maybe you’re growing. Maybe you need new features. A cloud POS lets you scale up or down as needed. Add marketing tools, loyalty programs, or delivery apps for that perfect retail or hospitality POS. of Cloud POS Systems

Cloud POS sounds great, right? And it is…but it’s not perfect. Like anything, there are a few things you need to consider before making the switch.

Dependence on internet connection: This is the big one. No internet means no system. That’s a problem if your WiFi isn’t reliable. The good news is that most cloud POS systems have an offline mode, so you can still take payments. But always check with providers, some are better at this than others.
Security concerns: Most cloud POS systems use heavy-duty encryption and security measures (that are often a lot stronger than what a local system has). But not all are created equal. Make sure your provider is PCI compliant.
Learning curve: Change is hard. If you’ve been using a traditional system for years, a cloud POS might take some getting used to. But most are designed to be user-friendly, and POS providers offer training and support.

Why Traditional POS?

Not everyone is jumping on the cloud POS train. And for good reason because traditional POS systems still have some solid benefits.

Benefits of Traditional POS Systems

Stability: Traditional POS systems run on local servers, so they don’t rely on an internet connection. This can be a huge plus if your internet connection isn’t reliable or you’re operating in an area with frequent outages. If you have multiple stores in countries known for having unstable wifi, traditional systems will be favorable.

Pay once, own it: If you hate monthly subscriptions then traditional POS systems usually come with a one-time upfront cost. No recurring fees, no price hikes, just pay, install, and use. If you’re on a tight budget or want to avoid ongoing payments, this can be a major plus.

No dependence on the cloud: With a traditional POS, all your data is stored locally, which means you don’t have to worry about relying on an external provider for uptime or security. If you're the kind of business that values total control over your data, a traditional system might feel more secure.

That said, even with these benefits, many businesses are still making the shift to cloud-based systems as they offer flexibility and more streamlined features. But depending on your needs, traditional POS systems can still hold their ground.

Disadvantages of Traditional POS Systems

Sure, a traditional POS system can be solid and reliable, but it’s not all smooth sailing. Here’s what you need to think about before committing.

Not exactly flexible: These systems are tied to specific hardware and locations, which can get complicated (and costly).
Manual updates: Unlike cloud POS systems, which update automatically, traditional systems need manual updates. That means calling IT, scheduling downtime, or hoping nothing breaks in the process.
Risk of data loss: Since data is stored locally on your server, if something goes wrong (like a hardware failure or power surge), you risk losing all your sales data. Backups can help here, but it's still a bigger risk than cloud-based storage.
Higher upfront costs: There’s normally a really big upfront cost for both hardware and software with these types of systems. You may also need to pay for ongoing maintenance, which can add up over time.

Summary of Key Differences

More of a visual learner? Here’s a full POS system comparison in table format:

So, which POS is the best for your business?

There’s no one-size-fits-all answer. The best POS system isn’t just about features—it’s about what works for you.

If you need stability, a traditional system might make sense. But if you want flexibility, automation, and access from anywhere, cloud POS is the future.

The real question isn’t just which POS system for small business is better, it’s what will help you grow, adapt, and run your business the way you want. Choose the system that fits your goals, not just today, but for where you want to be next year.

About the Author: Tillie Demetriou (SEO Content Writer for Epos Now) specialises in providing quality content around point of sale technology, retail and hospitality operations, and small business growth. You can find more of Tillie's wonderful work on Epos Now's resource page

Cloud POS vs. Traditional POS Systems: Which Is Best For Your Business?