The global cloud-based point-of-sale (POS) market is projected to reach $13.4 billion by the end of 2028 from $2.24  billion in 2020. A 24.5% CAGR is not surprising considering that the entire world is now moving online, thanks to COVID!

So what exactly is a cloud POS in UAE? Is it better than the traditional POS systems? Should you even consider investing in it? In this article, we are going to cover everything that you need to know about a cloud POS system, its benefits and how it is different from a traditional system. 

What is a Cloud POS System?

A cloud POS system is a digital tool that enables businesses to process sales and manage operations using the internet, which means you can access your system from anywhere with an internet connection, using a smartphone, tablet, or a computer. To put it simply, a traditional POS system stores information on hardware whereas a cloud POS system stores and processes information on a remote server. 

Components of a Cloud POS System  

A cloud POS system can be divided into two parts: a front-end hardware system and the back-end software. Here are the key components of a Cloud POS system: 

1. Hardware: You'll need a device (e.g., tablet, smartphone) with internet connectivity and potentially additional peripherals like barcode scanners and receipt printers.
2. Software: The POS software runs on remote servers that are accessible through your device's web browser or a dedicated app.
3. Data Storage: All data is stored securely in the cloud, so you can access  it from anywhere.
4. Transactions: Customers can pay using various methods like credit cards, cash, or digital wallets. The transaction data is automatically recorded and synced to the cloud.

Difference Between a Traditional POS and a Cloud POS System

By now, you have an idea of what a cloud POS system looks like, but let’s get to the specifics of how it is different from a traditional POS system, so you can decide if it is even worth giving a thought. 

Traditional POS systems are often referred to as "dumb terminals," because they rely on  dedicated, on-premise hardware such as cash registers, barcode scanners, and receipt printers and software that is often proprietary and requires installation on the hardware. On top of it, they have limited networking capabilities and require manual data entry, which is not only time-consuming but also error prone. 

Cloud POS systems, on the other hand, leverage cloud technology, and offer greater flexibility, scalability, and integration capabilities. They can run on various devices, are always connected to the internet, and easily integrate with other business applications. Cloud-based systems also benefit from automatic updates, so there is no need for regular manual maintenance. 

Another factor to judge these systems is the cost. Traditional POS systems have higher upfront compared to cloud POS systems, but cloud based systems have recurring fees, a nominal one but you should take it into consideration before making a decision. 

FeatureTraditional POSCloud-Based POSHardwareDedicated, on-premise hardwareTablets, smartphones, computersSoftwareProprietary, installed on hardwareCloud-based, accessible through internetConnectivityLimited or non-existentAlways connected to the internetData StorageOn-device storageCloud-based storageScalabilityDifficult to scaleEasily scalableIntegrationLimited integration capabilitiesEasy integration with other applicationsUpdatesManual updatesAutomatic updatesCostHigher upfront costs and ongoing maintenanceLower upfront costs but potential recurring fees

Benefits of a Cloud POS in UAE

So, now you know how a cloud POS system works and how is it better than a traditional POS system, but the real question here is if it is going to be beneficial for your small business? Let’s see what it has to offer: 

Accessibility: The most important benefit of a Cloud POS system is that you can access it from anywhere. Let’s say you are an owner of a flower shop and your staff handles the store now. You can use your Cloud POS system to keep track of your sales and customers. 

Real-Time Data: The best part about a cloud POS system is that you can get up-to-date information on sales, orders, and customer data. Based on the insights or trends that you can see, you can make informed decisions and respond quickly to changes. For example, your system can show you if the demand of a particular product is going down and maybe you can put that product on sale. 

Automation: One of the issues in a small business is that there are a lot of manual tasks including managing inventory, recording sales, and making receipts. As a small business owner, you can benefit from automating most of your tasks, so you can focus on what really matters and a cloud POS system can help you with that. It can easily integrate with other business applications like accounting software, inventory management, and some even come with inbuilt solutions such as customer relationship management (CRM) tools so you can easily streamline operations and eliminate manual data entry.

Reduced Hardware Costs: When you are starting your business, you often don't have enough capital to spare for investing in expensive hardware. A cloud POS system eliminates the need for expensive on-premise hardware, saving you money on upfront costs and maintenance.

Regular Updates: The best part about this system is that you can benefit from automatic software updates, so  you always have access to the latest features and security enhancements.

Scalability: Scalability is not a major concern when you are just starting out. However, when you are investing in a technology it is important to keep in mind how your future situation is going to evolve. With a traditional POS system, you cannot make a lot of changes as your business grows. A cloud POS system, on the other hand, can easily adapt to your business's growth. You can add or remove features and users as needed without significant hardware or software changes.

When Should you Consider Investing in a Cloud POS in UAE?

So, a cloud POS system does look good on paper. It is clearly better than a traditional POS system and does offer a lot of benefits, but at what stage of your business should you consider purchasing one? Well, the decision really depends on several factors, including your business's size, needs, and budget. However, here are some common scenarios where a cloud POS system might be a worthwhile investment:

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• Budget Constraints: While cloud-based POS systems may have recurring costs, they can often be more cost-effective in the long run compared to traditional on-premise systems, especially for small businesses. So, if you don't have a lot of budget to spare, a cloud POS system can be a good start. 
• Working with cash: If you have just started your business and you just accept cash, you should reconsider because especially in a place like Dubai, people don't carry cash on them and if you don't accept cards, you can say goodbye to that sale.
• Outdated or Inefficient POS System: Maybe you got a POS system but it is difficult to use or unreliable, then it is high time that you consider switching to one that can improve your efficiency and reduce errors. 
• Need for Remote Access: If you have employees who work remotely, for example you run an ecommerce business or you do home deliveries, then a cloud POS system can help you there. It can even help you accept online payments. 
• Limited Team Expertise: When you are considering purchasing a solution, you should keep in mind the capabilities of your staff. Cloud POS systems are usually very user-friendly and easy to use. More importantly, all the issues can be easily resolved remotely.  So, if your staff is not very tech savvy, then it is worth the investment. 
• Strengthen Customer Relationships: The system can be very useful if you are growing your business and want to enhance your relationship with customers. You can offer an omnichannel experience and even loyalty programs. 

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The Future of Cloud POS in UAE: Smart POS

Cloud technology has been in the market for a while now and most businesses are getting used to it. The best part about cloud technology is that it can quickly evolve according to the needs and the same has been the case with cloud POS, which has now evolved into Smart POS that upgrades your card machine into a complete POS system, so you can take orders and process payments from one single device. 

So, if you are still accepting cash, then it is high time to explore a solution that lets you accept all kinds of payments, so you never miss out on a sale.

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