Cryptocurrency Point of Sale systems (PoS) – all you should know about them

The use of Point of Sale (PoS) systems for cryptocurrency is on the rise as an increasing number of businesses and individuals shift towards the use of digital currencies. These systems allow businesses to accept cryptocurrency payments, offering a modern and accommodating payment option for customers. Traditional payment methods such as credit cards are bypassed, resulting in benefits like reduced transaction fees, faster processing periods and heightened security. This article delves into the vital elements, functions and the benefits retailers and consumers derive from cryptocurrency PoS systems.

What is Crypto Point of Sale?

Crypto Point-of-Sale (PoS) is a solution for setting up a cryptocurrency payment gateway. It allows customers to pay for products and services with cryptocurrency quickly and effortlessly using their mobile devices and crypto wallet. The primary benefit of the Point-of-Sale system is its convenience, as it only takes a few seconds to generate an invoice that customers can use to pay. Additionally, the PoS gateway is user-friendly and doesn’t require any complicated setup.

Payment of Service is a secure way for both the seller and the buyer when using cryptocurrencies. It also gives merchants the ability to personalize their invoices and generate new ones for each customer, making PoS an ideal choice for small physical stores that don’t need to handle dozens of transactions per second.

Cryptocurrency Point of Sales can be either web-based (software) or a hardware/device, similar to the standard PoS terminals that we use every day.

How does a crypto Point of Sale system work?

Regardless if it is a web-based app or a hardware device, Point of Sale systems works very similarly.

Crypto POS terminals are easy to use. All you need to do is enter the amount your customer needs to pay in any fiat currency, select the cryptocurrency they want to pay with, and the system will automatically generate a QR code.

Your client can use their phone to scan the QR code and pay the amount you previously mentioned with their crypto wallet.

Benefits of using cryptocurrency PoS at your physical store

Better security than standard payment methods

All digital assets are supported by a blockchain system that utilizes cryptography. Cryptography is an area of mathematics focused on providing secure end-to-end encryption. Therefore, your transaction is securely transmitted through highly encrypted cryptocurrency mining servers to form a series of blocks that cannot be changed. This reduces the risk of scams, transaction breakdowns, or power outages in your Point Of Sale system.

Low transaction fees

When utilizing standard POS systems for transactions, you are entrusting third-party vendors with the responsibility of security. However, when it comes to cryptocurrency, blockchain networks enable peer-to-peer exchanges without any outside vendor. Using a crypto payment gateway eliminates the need for third-party vendors, which in turn reduces transaction fees to around 1%. On the other hand, standard credit or debit card transactions are subject to 3% fee.

Better for marketing

You already know that enabling crypto payments is an increasing trend when it comes to payment method forward thinking. An effective marketing campaign can be built around a simple slogan “We embrace the future of digital payments”.

Staying ahead of the competition

Not matter how big or small your business is, you always face direct competitors. You can reach a new loyal client base by implementing a quick and secure way of making transactions.

A new wealthier demographic group

According to an article by Triple-A, in 2021, 46 million people or 13.7% of the United States’ total population, currently own cryptocurrency. When we have a closer look at the statistic, we can see that 44% of the cryptocurrency owners in the USA have an annual income of over $100.000.

No refunds

Bitcoin transactions are irreversible and can only be refunded by the receiving side – a significant contrast to credit card transactions that can be canceled. This means that if you accept bitcoin, there is no charge-back.

Read more on How to accept cryptocurrency payments in your brick-and-mortar store.

Important aspects to consider before using a cryptocurrency PoS system

All rewards come with some risks. There are a few factors that you need to look upon before implementing a PoS system.

Volatility

It is a well-known fact that cryptocurrencies can be volatile. It’s crucial to have a planned strategy for what to do with the coins you receive if you intend to hold them for a longer period of time. You have to decide in advance if you plan to cash out at some point and how often or if you decide to hold them.

Compliance

Cryptocurrency regulations and laws are constantly evolving based on the increasing usage throughout the world. Data protection regulations, anti-money laundering and know-your-customer requirements are a few factors to pay attention to. It’s important to keep track of the changes in compliance or to consult a legal expert if needed.

Security

When using a crypto PoS there isn’t a third party involved and the transaction takes place directly between the client and the merchant. You are able to access the history of the transactions you made instantly and can remain anonymous in a world where privacy is an expensive commodity.

Taxes and accounting

In many countries, the tax laws on cryptocurrencies constantly change as their stance is not yet clear. For example, in the US, IRS classifies cryptocurrency as property or a digital asset. Any time you buy, sell or exchange crypto, it’s a taxable event. Take taxes into consideration before starting to accept cryptocurrency payments.

Which digital currency do you want to accept

If you want to accept cryptocurrencies, you have to research which ones to onboard in your business carefully. The popular cryptocurrencies are bitcoin and Ethereum, which are safe bet among users. If you still have doubts, don’t hesitate to talk to an expert.

What are the different types of cryptocurrency Point of Sale systems?

Let’s explore the two main types of crypto PoS systems in more detail. They are web-based applications and hardware devices.

Web-based cryptocurrency Point of Sale applications

These apps are accessed through a web browser and do not require any additional hardware. Merchants can simply sign up for the service, connect their digital wallets, and start accepting cryptocurrency payments from customers. These web-based systems offer a simple and convenient solution for merchants who want to accept cryptocurrency payments without investing in expensive hardware.

Usually, such apps can be installed also on Android or iOS, which makes it even more convenient.

Here are a few examples of such crypto PoS applications:

Nowpayments

Nowpayments is one of the leading crypto payment gateway providers. They also offer a solution to accept payments through a PoS link.

In order to set up a crypto POS link with Nowpayments, you need to follow these steps:

1) Create an account with Nowpayments

2) Add your wallet address

3) Go to Settings -> Coins settings and select the cryptocurrencies you would like to be paid in. Make sure to select coins or tokens that are supported by your wallet! There are more than 100 cryptocurrencies to choose from:

nowpayments supported cryptocurrencies

This is how the process looks when your client attempts to make a payment:

1) You type in the amount of the purchase

nowpayments - the payment process

2) Your customer chooses the cryptocurrency he wants to pay you in

payment process - 1

3) On the next step, a QR code will pop up. The client needs to scan the QR code with his wallet app

payment process with nowpayments - last step

The entire process of setting everything up takes less than 15 minutes. Also, it is completely free, without installation fees or monthly subscriptions. Nowpayments charges 0.5% of every transaction.

itpay

Bitpay is another popular crypto payment gateway provider. What distinguishes them from their competitors is that even if your clients pay by crypto, Bitpay can exchange the coins and transfer fiat money directly to your bank account. This way, you still take advantage of the benefits of cryptocurrency payments, but you avoid the volatility that comes with it.

However, everything comes with a price. For monthly transaction amounts below 500 000 USD, Bitpay charges 2% + 25¢ transaction fee, which is significantly higher compared to Nowpayments.

Their Point-of-Sale app is available for iOS and Android. You simply install it on your device, and generate the invoice and a QR code which the client scans and processes the payment.

Here you can see how the process works:

https://www.youtube.com/watch?v=uJqVaaAcytU

Coingate

Coingate is a fintech company established in 2014. They offer different payment solutions for merchants, including payment gateway, crypto gift cards and more. They are about to launch a PoS application. You can sign in for the waiting list here:

https://coingate.com/pos

Hardware crypto Point of Sale devices

Hardware crypto PoS systems are physical devices that merchants can install at your retail store. These devices look like the standard PoS terminals that we use every day at the local store. They are specifically designed to process cryptocurrency transactions securely.

Here are some examples of hardware cryptocurrency POS terminals

Cyclebit

Cyclebit offers different tools to help retailers to accept crypto payments, including crypto POS terminals, such as Cycle POS 5.

One of the benefits of using the Cyclebit terminal is that the device works as a standard terminal, meaning you can accept all kinds of payments, including cards and cash, not only crypto. Pretty much it is an all-in-one device.

The device comes ready to work with pre-installed Android 5.1, making it user-friendly and easy to navigate. You don’t need to set up a wallet since Cyclebit takes care of everything for you. The terminal also has a built-in receipt printer.

The terminal packs a 5.5-inch IPS display, has NFC capability, and supports Wi-Fi, 4G, and Bluetooth connectivity.

The price for Cycle POS 5 is $299, which is a fair price for what it offers.

Another advantage of working with Cyclebit is that they also offer web-based crypto POS solutions, which you can use for your website if you have such. They can be your one-stop shop for accepting crypto payments on your website and retail store. It is always better to use one provider for everything.

Find more information about their POS devices here.

Pallapay

Pallapay is a USA fintech company founded in 2012. Among other payment solutions, they also offer a cryptocurrency pos terminal machine. The terminal can also accept card or cash payments and comes with a built-in printer for paper receipts.

What is different with Pallapay is that you can get a settlement with Fiat currency (USD, AED, Euro, and GBP) in your bank account – this is a great solution if you want to take advantage of the benefits of cryptocurrency but don`t want to deal with selling, trading or cashing out.

Pallapay also offers a cloud-based management system where you can manage your clients, assign discounts, search your clients database, assign employee rights, or check a report of the transactions.

You can check more info about their product here:

https://www.pallapay.com/crypto-pos-machine

Examples of businesses using cryptocurrency PoS systems

PoS systems can be adopted into different industries and we take a look at some popular and successful implementations.

Major Cineplex Group

Major Cineplex Group is a popular movie theatre chain in Thailand. Partnering with Zipmex, they created a crypto PoS. This allowed their clients to pay for their tickets with cryptocurrencies by easily scanning an automatically generated QR code.

Arms&McGregor

Arms&McGregor is a Dubai based real estate broker that provides people with residential and commercial properties. The broker allows its clients to pay with bitcoin or other cryptocurrencies. Once the client is ready to pay, Arms&McGregor generates a link with the payment details. Such a PoS method of accepting cryptocurrencies is ideal for Arms&McGregor and similar realtors since it is borderless and does not entail any massive fees.

A1

A1 is a key player in the sphere of communications in Austria, as well as in other European countries while having more than five million customers. In 2019, A1 introduced its own PoS solution in partnership with Salamantex. A1 wanted to avoid value fluctuations of cryptocurrencies and decided to enable an automatic conversion from crypto to fiat at the point of sale. Thus, whenever A1’s clients pay with crypto, the company receives fiat.

Kessel Auto

Kessel Auto is a dealership, with locations in Zug and Lugano that sell premium and sports cars. The company has been in operation since the 1970s. Kessel Auto’s customers can pay with Bitcoin by simply scanning a QR code generated by Bitcoin Suisse’s Point-of-Sale solution.This allows the company to accept payments from different parts of the world by sending them a code in an email which is relatively fast compared to bank transfers.

Conclusion

In conclusion, cryptocurrency point of sale (PoS) systems have become increasingly popular in recent years due to the rise of cryptocurrencies as a mainstream form of payment. These systems offer numerous benefits, including faster and cheaper transactions, increased security, and greater accessibility. However, there are also some challenges and considerations to keep in mind, such as the volatility of cryptocurrency prices and regulatory compliance. Despite these challenges, PoS systems offer an innovative and exciting way to accept and use cryptocurrencies in day-to-day transactions. As more businesses and consumers continue to adopt cryptocurrencies, PoS systems are likely to become an essential component of the modern payment landscape.

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