• EFTPOS & Point of Sale Solutions

Cloud vs. On-Premise POS: Understanding the Differences

8 min. read20.04.2023
By Team Zeller

Know how to choose the right point-of-sale system for your business.

Since James Ritty revolutionised the transaction experience in 1879 with his invention of the very first cash register, the point-of-sale (POS) system has undergone innumerable changes over the past 140 years. But recent iterations are arguably the biggest shake-ups yet.

Traditionally, POS systems have been installed and run on a computer or server on the business premises — referred to as “on-premise”. This tried and tested setup has dominated the market since the early days of computerised cash registers. But with the advent of the internet, more and more cloud-based players have entered the scene, offering a system that is entirely decentralised and accessed online.

Whether you’re about to start a business or you’re considering upgrading your legacy POS system to a cloud-based one, read on to discover the key differences and factors to consider.

What is the difference between on-premise and cloud-based POS systems?

The principal difference between on-premise POS systems and their cloud-based counterparts is that the former is installed and run on a computer physically located on the business premises, while the latter is hosted on remote servers and accessed through the internet. Traditional POS systems (such as, Order Mate, H&L, Impos or SwiftPOS), come with hardware that must be stored in your shop or business, whereas cloud-based systems (like Lightspeed Retail, ZiiPOS, Abacus and Next Order) can simply be connected up to whatever device you choose to run them off — whether that’s an iPad, a touchscreen monitor or a desktop computer.

Despite these differences, the functionality is essentially the same – they manage your inventory, print receipts, and record transactions. Another term to be aware of is ‘mobile POS’ or mPOS. Essentially, if your POS terminal has wireless functionality, it’s a mobile POS. A mobile POS can be part of both cloud-based or on-premise systems.

With that context established, let's take a look at what sets cloud-based and on-premise POS systems apart.

Reliability & Support

Internet dependency is one of the biggest determining factors when choosing between a cloud-based or on-premise POS system. If your business is operating in a remote location or an area with a poor network, using a cloud system to its full potential will be near impossible. Most mainstream cloud providers will still offer functionality that allows you to continue to take payments while working offline — simply storing the transaction data locally on the device and syncing it once the internet connection is restored. However, this is designed more as an emergency solution than one to be relied upon. On the other hand, while on-premise systems work entirely offline, they are not insusceptible to internal network failures, power outages, or software errors. If this happens, you will most likely need a technician to come out and identify the root cause as the POS provider cannot connect to your system remotely. With a cloud POS, most system failures can be resolved remotely by contacting a support team — often on-call 24/7 — who can connect to your system to troubleshoot the issue. It is worth noting however, that if the cloud-based POS provider itself goes down, you will be inconvenienced for the time that it takes them to get it back up and running. Whatever you choose, ensure to review the service level agreement in detail. This will specify the uptime that the provider must maintain before offering compensation.

Security & Data

With cloud-based systems, point-of-sale data—information pertaining to inventory, pricing, sales, customers, employees etc. — is encrypted and hosted in secure data centres with sophisticated security protocols and consistent monitoring. This means that even if you experience an issue with your local device, your business is at minimal risk of data loss or breach. What’s more, data backups are conducted automatically and regularly, so if the system were to crash, the data could easily be restored. Locally-hosted systems on the other hand, have a comparatively higher risk of losing data. The server is vulnerable to physical disasters — such as flood, fire, or theft — as well as system crashes or software bugs. Data can be downloaded and backed up for safety, however this is a time-consuming process that would need to be done regularly. If however, your business deals with sensitive information that simply cannot be shared with a third party, the on-premise system is advantageous as it gives you complete control. On-premise servers are not accessible to those outside the network, so your data is restricted from anyone other than authorised personnel. It is worth noting that if you do choose a cloud-based system, ensure to review the policy surrounding data retention and ownership: if you ever choose to terminate the agreement, you’ll want to be sure you can still access the data — both legally and operationally.

Integration & Customisation

It will come as a surprise to no one that cloud technology is becoming the norm. From Zeller’s payment gateway to Xero’s accounting software and Shopify’s e-commerce platform: the whole trading ecosystem is migrating to the cloud, which affords easier and faster integrations between each service. One of the greatest advantages to using a cloud-based POS is therefore its ability to incorporate additional features, modules, tools, updates or connections by integrating with third-party software even after the initial setup. Integrating EFTPOS payments with your POS system, for example, eliminates the need to manually key in the price onto the machine, streamlining the checkout process and reducing human error. See whether your choice of POS integrates with Zeller EFTPOS Terminal.

That being said, on-premise systems still remain relatively competitive with their cloud counterparts on this point due to the level of control that these systems offer. The interface, functionality or features of an on-premise POS can be modified in ways that a lot of off-the-shelf cloud solutions cannot. Once an on-premise system has been configured, however, any further changes will require you to call in extra technical support for an added cost. Cloud-based POS therefore gives users much greater flexibility and room for growth.

Hardware

When it comes to the physical equipment used in your POS setup, cloud-based systems offer the benefit of being run from consumer-grade devices such as iPads or iPhones, laptops, desktop computers, tablets, nor smartphones. The beauty in this is that businesses can quickly and easily scale up their operation by simply buying a new device from a highstreet retailer. Businesses can also match the hardware to their aesthetic and, thanks to the mobile nature of these devices, serve their customers from anywhere in their space. Traditional POS systems on the other hand are hamstrung by the fact that they also have to function as a server to store the data. As such, they are typically large and bulky and often, on-premise software providers will only work with specific hardware.

Updates

Like with any computer program, POS systems require regular updates to ensure the application or software runs smoothly and securely. Cloud-based systems benefit from automatic updates that take place frequently and in real-time so business owners can be sure they are always using the latest version of the software. Traditional POS systems however need to be updated manually by qualified technical support staff and cannot be used while the update is in progress. As such, these systems are updated infrequently or after hours.

Accessibility, Scalability & Setup

With a completely online cloud-based system, getting set up is a fast, straightforward process. No software installation is required, it’s simply a matter of signing up online or over the phone (the provider may perform a background check), then downloading the POS application to whatever device you’d like to use it on. By contrast, locally hosted POS systems typically cost a setup fee and require a trained engineer to install the equipment, customise the software to your needs and connect it to your computer network.

Being able to log into the cloud from any 3G, 4G or WiFi connection means that business owners or staff can remotely make changes, push updates or promo codes, or relocate their operation to an entirely different location. For an operation using on-premise POS, updates can only be made at the physical location where the server is housed and if your business decides to relocate or open up additional locations, it’s a time-consuming and expensive endeavour. Scaling up requires the purchase of new hardware and software licences, as well as getting another technician out to install the system.

Cost & Pricing

Finally—and arguably most importantly—what is the cost of a cloud-based POS compared to an on-premise POS? While it’s near impossible to provide a definitive answer due to the variability in business sizes and requirements, there are some general rules of thumb.

Due to the specialised hardware setup associated with on-premise solutions, the cost is considerable and upfront. Ongoing costs for this type of system include periodic maintenance, updates or re-installation in the event of a system crash, all of which will be provided for a fixed fee. A cloud-based system on the other hand has comparatively low upfront costs and is typically available as a monthly or annual subscription plan (great for managing cash flow). The cost is all-inclusive so, aside from the hardware — which is purchased independently — there are no additional charges.

The price of the subscription however will vary according to the size of the business and volume of transactions, so for larger businesses, a cloud-based system can sometimes turn out to be more expensive in the long run. However, with the flexibility to add or remove users, devices, locations or features as needed, a cloud-based system can also ensure that you only pay for what you need.

The consensus: Cloud or on-premise POS?

For small business owners just starting out, a cloud-based POS such as LightspeedZiiPOSAbacus or Next Order will likely provide more than enough functionality and will allow you to scale your operation in the most cost-effective way. For larger, established businesses, you’ll need to weigh up the reliability of your internet connections, how sensitive your data is, what third-party services you use, how complex your operations are, what hardware you want to use and whether or not you need remote access to your POS. It will soon become clear what service will work best for your business and which will offer you a better return on investment. If it looks like on-premise POS is the way to go, Order Mate, H&LImpos or SwiftPOS are great places to start.

Weighing up the options? Speak to Zeller Sales — we can help you find the right POS system for your business, and integrate it seamlessly with Zeller Terminal.

What is a POS System and How Does It Work?

Whether you’re running a small market stall or a multi-venue operation, your point of sale will be the hub of your business. To help you choose the right setup, this article outlines how POS systems work and what you can expect from their hardware and software. What is a POS system? POS stands for point of sale, it refers to the place (in-person or online) where customers complete a purchase. A POS system is the combined hardware and software that is used to facilitate these purchases and assist the business in tracking and managing the sales. Today, POS systems encompass a variety of functions, including (but not limited to): Processing orders Taking payments Tracking inventory Providing sales analytics Generating receipts and order dockets Gathering marketing data Implementing customer loyalty programs POS systems vary greatly depending on the size of a business and the industry it's in, and come in the form of physical devices – such as countertop machines and mobile POS or 'mPOS' terminals – or virtual checkout points via online apps and kiosks for self-service orders. For small businesses, a smartphone or mobile device may suffice, while larger more complex operations may require computer systems, barcode scanners, receipt printers, and more. Read on to learn more about how POS systems work and the hardware and software included. How does a POS system work? There are four main steps involved in the point-of-sale process. Your POS system will use the data generated by the sale to offer you helpful business insights, and identify marketing opportunities. You will be able to understand which products are most popular, when your busiest time of day is, who your most valuable customers are, and more. What hardware is typically included in a POS system? If you operate a food truck or a market stall, you may opt for a mobile POS solution (also known as MPOS) which can be operated from a smartphone, tablet, or mobile EFTPOS terminal. However, for larger businesses, there is a range of POS hardware that can help support your operations. The following are the most typical pieces of hardware that are included in a POS system. Display and computer Many POS systems comprise a countertop computer where merchants can manage transactions, as well as a display that faces the customer. Traditionally, these machines have been bulky monitors with in-built cash drawers, but today, more and more businesses are opting for sleeker tablet-style setups. EFTPOS machine Businesses that process payments in-person, will at the very minimum, require an EFTPOS machine to accept card and contactless payments. These machines are most often supplied by a financial services provider like  Zeller  or a traditional banking institution. For smaller, more agile businesses that don’t want to be anchored down to the checkout counter, smartphone-based card readers such as  Tap to Pay with Zeller App  allow customers to make their purchase anywhere in the store. Cash drawer In Australia today, less than 20% of transactions use cash, which is why many businesses are choosing to go cashless. However, for those still accepting cash, you will need a cash drawer within your POS set up to securely store money securely and provide change to customers. Receipt printer While many modern POS providers are able to send digital receipts to customers via SMS or email, you may choose to offer your customers the option of a paper receipt. Additionally, if you run a hospitality business, you may need to print order dockets for the kitchen. In both cases, you will need a receipt and/or docket printer as part of your POS setup. Barcode scanner For businesses with a large product inventory, barcode scanners are a helpful way to quickly pull product information and add the cost to the checkout total. They help automate the checkout process, creating a faster and smoother customer experience. Plus, barcode scanners integrate with inventory management systems to automatically adjust stock levels. What features can I expect from POS software? Payment processing The most basic and important feature of a POS system is to accept payments. Depending on the needs of your business, this may include any or all of the following: Cash processing Accepting secure online payments through your eCommerce site Accepting credit and debit cards with an embedded chip Accepting contactless payments with mobile wallets (e.g., Google Pay, Apple Pay, Android Pay) Processing card-not-present transactions (ie. when your customer and their card aren’t in front of you so you have to manually enter their card details via  MOTO  or a  virtual terminal ) Inventory management Most POS systems include software that will automatically update your inventory whenever a customer orders a meal, or buys or returns an item. This allows you to easily track stock levels, anticipate when popular items will run out, and stay on budget by purchasing supplies only when necessary. Depending on the needs of your business you can find POS software that: Digitally scans products and counts them Manages stock variations (eg. size, colour, style, etc.) Uses unique serial numbers to track inventory Monitors inventory across multiple locations Automatically reorders popular items Table management For dine-in hospitality businesses, a POS system can also aid in managing floors and tables. Some software allows restaurants to make a visual floor plan, allowing staff to see what tables are occupied, reserved, and available at a glance. POS software can also help staff to make bookings and manage reservations, waitlists, and track table turnover rates to help managers identify peak times and optimise seating arrangements. Sales reporting For businesses to effectively manage their cash flow, sales need to be recorded, categorised, and updated in real-time.POS software can provide daily, weekly, and monthly sales reports, ranging from high-level summaries to comprehensive detailed analytics. These sales and revenue reports can help to identify top-selling products and seasonal trends, revenue trends, purchasing behaviours, return rates, how profitable products or services are, and more. Employee management In retail or restaurant environments, where many employees work hourly, POS systems can simplify time tracking and scheduling. Instead of manually logging hours, employees can clock in and out with a card swipe or code entry, enabling precise tracking of hourly wages. This system also facilitates quick identification of top-performing employees, particularly those working on commission. Customer relationship management (CRM) Some POS software doubles as a customer relationship management (CRM) tool, consolidating customer data and trends and enabling you to track purchase histories effectively. These POS systems will collect customer information (such as name, age, birthday, phone number and email address), associate sales with specific customers, help you implement customer loyalty programs, and integrate with email or SMS marketing tools. What is the difference between cloud and on-premise POS? Traditionally, POS systems have been installed and run on a computer or server on the business premises — referred to as “on-premise”. However, today, more and more cloud-based systems have become available, offering a POS that is entirely decentralised and accessed online. So, the principal difference between on-premise POS systems and their cloud-based counterparts is that the former is installed and run on a computer physically located on the business premises, while the latter is hosted on remote servers and accessed through the internet. To learn about the pros and cons of each system, read our blog article on the differences between  cloud and on-premise POS  here. Let Zeller take care of your payments. While choosing a POS might take some further consideration (read our article on the best POS systems for small businesses here), choosing an EFTPOS provider is easy. Zeller is Australia’s favourite payments platform, trusted by thousands of businesses ranging from sole traders to national franchises. Whether you need a simple, zero-cost mobile solution or a fully integrated EFTPOS machine with the most advanced features (think tipping, bill-splitting, screensavers and more), Zeller’s platform is designed to adapt to the requirements of your business. Get in touch with us today to find out how we can help.

Best POS Systems 2025: The Ultimate Point of Sale Guide for Retail, Restaurants and More

With hundreds of point-of-sale (POS) providers in Australia, selecting the right one can be an overwhelming task. In this article, we outline the key factors to consider when choosing a POS, and recommend some of the best providers for your industry. If you’re a new or existing business owner, by now, you probably know  what a point-of-sale system is and how it works . The next step is choosing a solution that is appropriate to your business size and industry. To help make the right decision, read our list of considerations below and make note of which ones are the most (and least) important to your business, so that when you’re in conversation with a POS provider, you can be well equipped to ask the right questions. Then, learn which POS providers are the most popular among cafes, quick-service restaurants, dine-in restaurants, retail businesses, and bars and clubs. Important considerations when choosing the best POS system for your business. Hardware POS hardware refers to the physical devices that make up your POS system. This could include any or all of: a computer or display unit, a receipt printer, a barcode scanner, a cash drawer, and an EFTPOS machine. While large businesses may require a full suite of hardware, many smaller businesses can get away with little more than a tablet or smartphone. Portable devices like Zeller Terminal 2 (which has a POS system built-in) are often referred to as mobile POS or ‘ mPOS ’, and they provide excellent functionality, allowing merchants to do everything from managing their inventory to taking payments all from the one machine. Software The functionality of the POS software will arguably be the biggest factor in determining your final choice. If you are a retail business, you may want to prioritise a robust inventory management system – this will allow you to easily track stock levels, anticipate when popular items will run out, and stay on budget. For hospitality businesses, a floor management system may also be required to manage table seating and reservations. Additional functionality includes sales reporting, for managing cash flow; employee management, for automatically logging hours and tracking performance; and customer relationship management (CRM), for collecting customer data and implementing targeted marketing campaigns. While these are the most common and basic features of POS systems, those designed for individual industries will offer even more specialised features. Ease of use Think about who will be using the POS system on a day-to-day basis. Do you have a high turnover rate of employees? If so, consider how easy it will be to train new staff to use the software. A simple, intuitive interface will greatly reduce human error, which, in a fast-paced environment, could be critical. Integration For most businesses, their POS provider cannot just work alone, it will need to be able to integrate into a number of different systems. The accounting software,  payments provider , and/or e-commerce platform you use (or are planning to use) should ideally integrate with your POS system. By enabling information to flow easily between systems, you will greatly increase the efficiency of your operations, saving you and your team time and money. Take note of what platforms a POS provider integrates with before making a decision, as this can become a frustrating roadblock later on if it is neglected. Customer support How quickly and easily you can contact your POS provider is something that can be easily overlooked – but it’s extremely important. If you decide to go with a POS system that offers all the bells and whistles, but doesn’t have anyone to pick up the phone when you need help, this will quickly lead to frustration and potentially lost revenue. Check the provider’s website and LinkedIn: are their offices based in Australia? What are their customer service hours? Do they have a robust support centre with help articles and troubleshooting resources? Will you be assigned an account manager? Additionally, how quickly you need to get up and running is an important consideration. Many traditional POS providers require a technician to come out and set up the hardware and software, whereas newer web-based systems are often self-service and can be entirely set up remotely. Multi-location Do you run a multi-location operation or are you planning on scaling in the future? If so, it’s important to be sure that the POS software is equipped to deal with multi-venue requirements. Being able to push updates to machines at several venues at once, aggregating reporting from all venues, and monitoring stock transfers between locations, are just some of the features you’ll want to ensure your POS provider can support. Cost With varying pieces of equipment, features, minimum requirements, and pricing models, understanding exactly how much you’re going to pay for a POS service is not easy. To avoid bill-shock later on, make sure you understand exactly how each aspect of the service is priced. Are you buying the hardware outright or will you access it on a rental agreement? Is the software licence a one-time purchase or a monthly/annual subscription? Is there a cost associated with ongoing support and maintenance? Will you pay a fee each time a transaction is processed through the POS? Ensure you ask any potential POS provider all these questions before signing a contract. Best POS providers by industry The table below presents some of the best POS providers available to Australian business owners, organised by industry, with some of their noteworthy features listed on the right hand side. For a comprehensive list of features, be sure to contact the POS provider directly and request a demo before signing up. Let Zeller manage your payments. No matter how you prefer to manage your checkout process, Zeller is Australia’s leading payments provider, tailored to meet your business needs. For smaller or mobile businesses with a limited inventory, Zeller offers Zeller POS Lite, built into Zeller Terminal 2 at no extra cost. Larger, more established businesses can benefit from Zeller Terminal’s seamless integration with over 600 different POS platforms. Whether you’re looking for a simple, cost-effective mobile solution or a fully integrated EFTPOS machine with advanced features like tipping, bill-splitting, and custom screensavers, Zeller’s platform is designed to evolve with your business. Chat with our sales team today to set up Zeller POS Lite, or explore our Zeller Partner Hub to find the perfect POS integration for your business.

What is Integrated EFTPOS?

If you’re shopping around for a payments provider or a point-of-sale system, you may have come across the term ‘integrated EFTPOS’. In this article, we explain what this technology is and how your business can benefit from integrating with Zeller Terminal. Integrated EFTPOS is a direct connection between your point-of-sale (POS) system and your EFTPOS machine. When these two systems are integrated, sales totals that are rung up on the POS are pushed automatically to the  EFTPOS terminal , eliminating the need for staff members to key in the sales value manually on the machine before payment. With the tap of a button on your register, payment details are automatically transferred to your EFTPOS terminal, ready for your customer to tap, dip, or swipe. To explore the best POS systems available in Australia and find one that suits your needs, check out our comprehensive blog article on the topic. Six ways Zeller Integrated EFTPOS will benefit your business. 1. It reduces human error. An unintegrated EFTPOS machine requires a staff member to manually enter the sales total into the terminal before the payment can be processed. Unavoidably, this process will lead to human error. If a customer is accidentally overcharged, not only do you risk losing their business in future, but it takes time away from your staff to process refunds for incorrect payments. Similarly, if a customer is accidentally undercharged, it is unlikely that you will be able to recoup the lost revenue, and it can lead to frustration and confusion when it comes to end-of-day reconciliation. Integrated EFTPOS eliminates these risks, by removing the need for manual entry into the EFTPOS machine. 2. It makes transactions faster. Integrated payments allow you to serve more customers, faster than ever, by removing unnecessary steps in the payment process. Whether you use a touch screen or a barcode scanner, integrated EFTPOS allows data to be pulled directly from your system, reducing waiting times at the checkout. You’ll also save time at the end of the day. Thanks to two-way communication between your devices, end-of-day reconciliation becomes a breeze, with payment transactions relayed back to your POS automatically. 3. It’s free and fast to set up. Although some merchant services providers may charge upwards of $10 per terminal to integrate with your POS system , Zeller’s integrated EFTPOS solution is free. Similarly, the process of getting set up is simple and self-service. Traditionally, integrating EFTPOS and POS systems has required a third party engineer or integration specialist to arrange a time to visit your business premises in person, with Zeller, you can connect your systems remotely, and in most cases, in less than 15 minutes. 4. You won’t lose sales if your POS system fails. In the event of a POS system outage (or other disruption to your POS system), every other integrated EFTPOS solution will lock you out of your EFTPOS terminal – forcing you to contact their customer service centres in order to get back up and running. We understand it’s critically important that, no matter what, you are still able to process sales at your business. If your POS system suffers a disruption for any reason, you can continue to use Zeller Terminal. Simply toggle on ‘Card mode’, and you will be able to continue processing transactions via Zeller Terminal without any downtime. 5. You have over 600 POS platforms to choose from. Whether you’re using a  cloud-based or on-premise POS  solution, with Zeller, you can be confident that – no matter which POS you choose, or industry you operate within – you’ll get the benefit of integrated payments. Zeller is proud to partner with over 600 POS providers, including leading solutions such as  Abacus , Impos ,  Zii ,  H&L ,  Oracle ,  Whoods ,  Redat ,  Task ,  Hike , plus a long list of others to service a wide range of industries and business sizes. To view the full list of POS providers that Zeller integrates with, visit the  Zeller Partner Hub . Not sure what POS system to choose? Use our Best POS Systems Guide for 2024 to help you find the right provider for your business. 6. You can turn tables faster with Pay at Table. Hospitality businesses using  H&L POS  enjoy the added benefit of Zeller’s innovative  Pay at Table  solution. This integrated technology allows Zeller Terminal to function as an extension of your H&L POS, allowing staff members to view open tables, see total outstanding bills, take payments and close tables — all on one device. Rather than the customer paying at the counter or finalising the bill in the traditional, time-consuming manner, waitstaff can deliver the bill and the mobile payment device, all at the same time. Read our blog article to learn how  Pay at Table  works.

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