What Is POS System? And What Is Point of Sale?

POS stands for Point of Sale – which is a system for a retail to indicate amount, calculate the amount owed by customers and issue a receipt for the customers.

In the past, the POS system used in restaurants was quite expensive and it did not have many functions to perform. However, in the present time, the price has decreased to being affordable and it has more functions to perform.

The word, POS may be pronounced differently depending on each individual. Some people pronounce it pos the way it is written. While some people pronounce it P-O-S alphabetically. There are still many people call the system in full name as point of sale system. Although, it may be called and pronounced in different names, the system still performs its regular functions on assisting restaurants or retails by calculating prices and issuing a receipt. Besides that, the system also helps on inventory adjustment, as well as, summarizing sales report of the restaurants daily, monthly and annually.

I believe that when it comes to calculating the amount of money or issuing the receipt is a common topic that can be easily found anywhere. Hence, this article will take look at insight information on history development of the POS system. This is to help people who are running a restaurant business or retail to comprehend revolution of the system in each era. We will divide each era as follows.


Pre 1990s

The very early POS system that is well known was made by IBM Company in 1973. It is the machine widely used in the retails. The software is installed and performed on mainframe computer. It performs its function by sending data to between clients and server through LAN system.

Another well-known machine in that era – it was built by William Brobeck and Associates Company in 1974. The software is run on Intel 8008 with the speed of 0.2MHz. (You read it right. It is literally 0.2 MHz)

Intel 8008 Microchip with the Speed of 0.2 MHz

The reason that this machine is widely known due to it was used in McDonald’s. Back in those days, the restaurants still used a system where you needed to press numbers. For example, press [3] to order a BigMac or press [1] to order French fries. Once the customer was done ordering and it was time to pay, you had to press [payment] to end the order. This type of old system process was a code type where a user had to memorize every code of each menu. It was not easy when some restaurants had plenty of menus to remember for the user.


After that, the IBM Company introduced a new POS system on PC for the first time in 1985, which was IBM 4683. In the following year, the company also released Point of Sale software with touchscreen function in 1986. It was named ViewTouch. It used computer chip, Atari 520ST (most people these days probably do not know this brand anymore). This brand is basically the early point of sale system that was sold widely to the users in restaurants or retails.

IBM 4683 machine in 1985 – It is quite surprising that some retails still use this type of machine.

Early 1990s Software

After the sales of point of sale system to retail businesses, there were more companies developing the point of sale software in many types and forms. The software was now run on personal computer with Windows and Unix. With this reason, the price the system started to decrease. At that time, the price to set up the point of sale system was $4,000 or around 136,000 baht. However, in this era of having database on the personal computer also caused following problems such as a software and database bug due to inaccurately updating versions by the users.

Complex infrastructure

Basically, the POS system had a quite complex infrastructure starting from sales, inventory, inventory adjustment, order, fund, revenue and customers’ reward points. Once, everything was related to one another, it made the POS system become the most complex software in the market. Despite that, the various functions of the system that was very convenient for a lot of users, it became very popular in that era. Besides that, the retails and the restaurants, the POS system started to foray into other business types as well.


Windows 3.0 in 1990


Post 2000s Cloud-Base Software

When there was a development of cloud computing system, the POS system was also beginning to build a cloud computing system and turned into software as a service. Basically, it means you only pay as much as the amount you use it. This new system needs to work through the Internet connection. Hence, it reduces uses of resources such as machine to run the program. The database and processing can all be stored in the cloud software instead of storing everything and processing it on the computer. With this reason, the POS system does not have to install the software in the computer anymore.

The cloud-base software would be regularly updated and maintained by software development team. This gives the cloud software the ability to perform smoothly and experience less bug or error problems. If there is any issue occurred, the software development team can immediately solve the issue. Hence, using the POS system on iPad or mobile devices has been rapidly popular.

The main feature of the cloud-base software is that it allows the users to gain benefits from accessing the central insight information. It helps people who have to manage several branches easily work online. Moreover, this type of POS system is relatively cheaper than the old one.

In order to use the cloud-base POS system, it needs to be connected to the Internet. Therefore, the device must be able to work well with Wi-Fi or 3G. Besides the advantage of the low cost, another strength of the system is that, a lot of software developers all around the world are focusing on further developing the cloud-base software. Although this system makes many restaurants sell cheaper price of their food due to the low cost and reduces technical issues, there are still some risks to consider. For instance, the service provider might close down their operation.

With this reason, I recommend you to find a credible and reputable company that has a long history of developing the POS system in the market. This will reduce the risk of the company suddenly closing down their business or stopping their software development. Besides the system, we have a blog written about the differences of POS printer between dot matrix printer and thermal printer.

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  • The POS system that requires the process of pressing number to make an order has been around since 1973 and its price was set quite high.
  • The POS software on PC has relatively lower price, which attracts many retails or restaurants start to use it. However, there is a high risk of causing a system error and bug due to the system is working on the software that is running at the same time.
  • The cloud-base POS system has lower cost than other types of systems to begin with. It also has lower risk of causing any issues due to the system updated and processing data on cloud only.


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