An evolution of POS (Point of Sale) Systems

The evolution of POS (Point of Sale) Systems
(Image credit: DNA India)

POS systems have been around for quite a while. The first one was invented in 1879 by an American shopkeeper James Ritty, when he noticed that his employees were pocketing money his business was making. 

He called the system “Ritty’s Incorruptible Cashier”, which is perhaps a more catchy name unlike today’s IT tool, which would commonly become known as a “cash register”.

The first computer-driven cash register, which resembles what we have today, was developed by IBM in 1973 – and it marked the first commercial use of a computer-based system used by the restaurant industry. 

Then, in the 1980s, the first credit cards were introduced into society. As a result, the evolution of POS terminals accelerated when they had to be updated accordingly to suit the business industry. 

POS systems in the 1980s 

McDonalds branded POS system

(Image credit: Mike Mozart, Wikimedia Commons)

McDonalds started rolling out POS terminals in its restaurants in 1984. Invented by William Brobeck, the model they used was one of the first microprocessor-controlled cash registers. 

The POS terminal system increasingly helped to speed up the food ordering process by including a physical button for every item on the menu. It was also the first time a POS could be connected to a multitude of other devices, allowing the fast-food chain to easily manage reports and receipts with reasonable speed and efficiency. 

In more fine-dining establishments, the bulky POS systems would be hidden so that they were out of sight of customers.

POS systems changed drastically two years later, when touchscreen technology and colorgraphic monitors became more affordable. 

ViewTouch, the first POS system solution on the Atari ST, was launched in 1986 by Gene Mosher, a New York-based restaurateur, at Comdex in Las Vegas whilst the inventor was on his honeymoon with his wife. Nowadays, it is offered for free under the GNU license and can be run on the simplest of computer hardware such as Raspberry Pi

POS systems in the 1990s 

As computers became more sophisticated in the 1990s, so did POS systems, with the first e-POS (Electronic Point Of Sale) system, Nisyst, launched in 1992. 

That year saw Martin Goodwin and Bob Hendry together develop and release the IT Retail POS software system on Windows, leading to a variety of POS applications being developed for Microsoft’s increasingly popular OS, in addition to Unix-based operating systems

In 1993, Europay, MasterCard and Visa unveiled the EMV standard for the credit card industry in Europe, which is still used in integrated circuit cards, POS terminals and automated ATMs.

POS systems in the 2000s 

Card reader with mini shopping xart

(Image credit: Future)

Powerful computers and more advanced networks led to an evolution of the POS, which began to develop capabilities beyond sales transaction processing in the early 2000s. 

As internet connections became faster, ePOS systems took to the cloud and found popularity among businesses due to increased convenience and lowered costs.

Cloud-based POS systems transformed the landscape as any device capable of connecting to the internet could suddenly be used as a potential POS terminal. 

That included smartphones equipped with barcode scanners and NFC tech, which effectively turned them into payment terminals and mobile credit card readers.

Shifting POS technology to the cloud also brought new security capabilities to the best POS systems. The introduction of the SaaS (or software-as-a-service) model removed the need for businesses to manually update software and licenses, with it instead being automatically taken care of by POS software vendors. 

POS systems in the 2010s and today

Since 2010, modern POS systems have become increasingly sophisticated. Nowadays, they allow business owners to manage both front-end and back-end operations with ease. Integrated systems enable everything from inventory management to marketing; staff time managementaccounting process; and customer information to be accessed, analysed and controlled through a single (often touchscreen) interface.

Widespread adoption of cloud-based POS systems accelerated during the decade. Through the utilization of technologies to store sales and customer data using cloud storage, companies found it quicker and easier to access (and act upon) their sales and customer data than ever before. This made cloud-based POS systems particularly attractive for companies that ran a franchise model with multiple stores.

The rise of cloud-based POS has naturally coincided with new trends around mobile POS. Indeed, many business owners and workers alike began using POS systems on mobile devices from 2010 onwards, which became even easier thanks to tablets and smart mobile phones with increasingly larger displays and better processing power.

Many vendors offer their business applications for free and take a cut of each sale through payment processing fees. By using a mobile POS system, companies can let their employees easily look up product information, search for answers to customers questions, and take payments whilst walking around the shop floor. Consumers are also able to benefit from the mobile aspect, by buying goods and services on devices like their own smartphones with a tap, using technologies such as NFC and Bluetooth.

The POS System has come a long way, with great leaps made particularly in the past two decades. 

Thanks to ongoing advances we're likely to continue seeing a convergence in technologies, with POS systems becoming smarter and better able to help businesses get even more value out of their data than they can today.

Desire Athow
Managing Editor, TechRadar Pro

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website builders and web hosting when DHTML and frames were in vogue and started narrating about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium.