POS Transaction Meaning in Banking

ABCAdda | Updated Jul 26, 2022

POS transaction is one of the strong progress in the IT industry in recent years and has also grown the business. With the revolution in modern software and hardware technology, the records associated with every retail store are digital. Electronic records save resources, are more reliable, and can be backed up with minimal data loss.

The on-premises system is specifically designed to track all sales orders, inventory records, POS transactions, user account management, and other activities that occur in a retail store. Popular POS systems that businesses can use to increase sales include Magento POS, SquareUp, Lightspeed, Shopkeep, and more.

Before knowing what a point of sale transaction means, let us see what a point of sale is, Point of Sale vs. Point of Purchase, Point of Sale Debit, POS vs. POS debit.

What does pos stand for in banking?

Point of Sale.

What is Point of sale (POS), or what does pos mean in banking?

Point of Sale PoS meaning in banking is a payment acceptance solution offered by PNB, which includes universal compliance with the latest security features, acceptance of all domestic and international debit, credit, and prepaid cards, fast payment processing, on-site support, and round-the-support- 24/7 service, dynamic currency conversion tools and access to payment reports for easy reconciliation. Learn more about Point of Sale (POS) capabilities below:

POS solutions help you accept payments with any debit and credit card from any smart/functional phone powered by our secure technology.

  • Visa, MasterCard, and Rupay debit and credit cards are accepted.
  • The mPOS terminal is small and handy.
  • NFC terminal to facilitate fast payments.
  • Cashless payments make transactions and money management seamless.
  • Seamless implementation of payment stations at retailers.

Enhanced Features

  • EMI settings from the POS terminal
  • Dynamic Currency Converter (DCC) Function
  • The static Bharat QR code feature is available at the POS terminal.
  • It will offer Dynamic QR code functionality at selected dealers shortly.

Pos withdrawal meaning

Cardholders can withdraw cash at the POS terminal using debit and prepaid cards. However, this depends on the mechanism issued by the bank, and the buyer’s bank determines the POS terminal.

Debit point-of-sale or debit POS

Point-of-Sale Debit or POS Debit is a direct and prior transfer of funds made by a point of sale to a retailer from a consumer’s account to a retailer’s account for payment for debit card purchases. This allows shoppers to purchase goods quickly and easily, with merchants avoiding checks and credit card claim delays.

Banks that offer debit card services (often called ATM cards) instantly and directly transfer funds from the customer’s bank account to the merchant’s bank account when the card is used. Unlike purchases made by check or credit card, using a debit card results in the immediate withdrawal of a sum of money from the customer’s checking account and transferring the amount to the merchant’s account.

Point of sale versus point of purchase

The term “point of purchase” is also heard in point-of-sale discussions. However, in most industries, point of sale and place of purchase are not interchangeable, although they refer to similar places.

Then what is the importance of POS? The point of sale is where the actual sale takes place, and money is exchanged. Point of purchase refers more to the point of sale.

In a fast-food restaurant, the shopping location may be the take-out counter and the surrounding area, including self-service coolers for cold drinks at the counter or a dessert fair.

The term “purchase location” is important to marketing and sales professionals who plan impulse purchases and choose what to display to entice customers to make a last-minute purchase. The point of purchase can be seen as the last opportunity to sell to the customer before the sale occurs.

POS vs. POS Debit means

“POS” and “Direct Debit POS” are the two most common terms on customer reports when using their debit card online or in-person at checkout.

As we know it, POS is a point-of-sale terminal that allows transactions to be made with a touch, swipe, chip, or key. Examples of common point-of-sale systems are Clover, NCR, Revel, and Toast. In theory, all purchases made on these POS devices or through the cloud-based POS system, including gift cards, should be marked as POS on the credit card statement. But that’s not always the case.

In comparison, POS Debit is the transactions originating from debit cards, sometimes called ATM cards. Using a debit card plus a POS system is equivalent to a Direct Debit POS. But there are several ways this can work:

  • Via POS device in the store
  • Via ATM transactions (withdraw cash)
  • Through online transactions through an online POS system.

In most cases, POS and POS Direct Debit transactions are personally authenticated with a PIN via checkout or point-of-sale transactions. This is not the case with online transactions where users enter the card information manually.

In the case of personal POS or online payment systems, certified transactions or transactions that do not require a PIN are also included in the POS direct debit umbrella.

This is a minefield that customers need to understand. So now we all know what is a point of sale transaction, what pos means in banking, what pos means on bank statements, and what does pos debit mean; now let us see!

What is a POS transaction?

POS transaction meaning is carried out when customers make payments at the cashier or an online store in exchange for products or services provided to them. Generally, a point-of-sale transaction occurs whenever an activity involving the conversion of an asset, liability, or equity is performed.

The exchange of cash and goods can be done on any medium, depending on the type of shop or shop where they make the purchase. Transactions involve two user roles: buyer and seller. The system that contains the software and hardware that tracks these transactions is referred to as a POS or point-of-sale system.

Therefore, any currency exchange that occurs through the currency meter built into the POS software and hardware is a point-of-sale transaction. Retailers buy point-of-sale systems to track the number of transactions made daily, monthly, or yearly.

The POS system is also responsible for calculating the money made each day while selling different products. Other great features include inventory management, POS report generation, user profile management, inventory management, stock requirement forecasting, and much more.

A cloud-based POS system to record and monitor point-of-sale transactions helps retailers maintain reliable records. It is also designed to measure their business progress effectively.

The system also helps salespeople develop strategies to increase sales by looking at the demand and sales of each product and the impact of existing sales practices. It can also generate POS reports according to input data.

What is a POS purchase transaction?

POS stands for Point of Sale. POS purchase means transactions usually occur every time a buyer pays a certain amount offline or online to buy an item from a seller. The purpose of a point of sale is to monitor and record all transactions between customers and sellers.

Transaction types of POS

Every sale or purchase involves a money transaction, but how the money is transferred may vary from case to case. The two main categories of POS transactions are listed below, along with detailed descriptions:

POS transactions for online orders

POS transactions that occur when purchasing from online stores fall into this category. In this case, the store is not physically present, but shoppers can view product details online and order the product they want, which will be delivered to their doorstep after some time.

A point-of-sale transaction occurs when a buyer enters their credit card information and transfers the money to the seller in an online category. In case of poor product quality or defective goods, the customer will also get partial reimbursement for the amount.

POS transactions for offline orders

When a shopper visits a store, selects a specific item, and pays at the counter where the POS is installed, this category is known as an offline point of sale transaction. In this case, the money is received directly from the seller without delay.

These online and offline transactions are further classified into three different types:

  • Sale: This kind of transaction occurs when a product or item is sold in a physical store or an online store. In both cases, cash or payment is received directly from the seller. The number of products sold, amount of money received, date and time of purchase, salesperson, and customer information are recorded in the POS system to monitor these factors for future forecasting.
  • Shopping: This point of sale transaction occurs when a buyer purchases a product from any medium and returns it via payment. All purchase-related Information is recorded in the checkout system.
  • Results: Once the shopper has successfully purchased the desired product, a receipt is generated for the valued customer, including details such as cash amount paid, product quantity, name of item purchased, date and time of purchase, etc. These receipts are provided to customers to enable them to track their purchases in retail stores.

POS coordination and its relationship with POS transactions

The term POS reconciliation is gaining traction in both small and large businesses and is used when comparing accounting records of POS records with each other. This is done to ensure that the recorded data is correct.

Point-of-sale reconciliation is also explained as a calculation to verify that the amount of cash available matches the number of sales made on that day/month or year.

POS reconciliation and POS transactions are closely related as they are used to verify each other’s data. For example, data from reports generated in the point-of-sale system were cross-checked using the point-of-sale matching method. As a result, cash inflows and outflows are recorded perfectly.

POS transaction benefits

  • Eliminate accounting errors: The POS reconciliation methodology eliminates all possible human errors when calculating finances and helps you analyze data accurately.
  • Safe business deposit: Cross-checking during this process also helps you ascertain the amount of cash in your account to predict future investments or purchases accurately.
  • Stability: The outlet negotiation process also accelerates your business’s financial management stability. Accurate cash forecasts will help you plan and get things done smoothly.
  • Identification of unauthorized transactions: Double-checking all finances related to sales and purchases also helps you identify unauthorized transactions and minimize unnecessary cash flow risks.

POS system components

Traditionally, POS systems consist of hardware and software on-site for sale. But thanks to the development of technology, more specifically cloud-based servers, it gives merchants more mobility in using the POS system.

Common types of POS hardware

Depending on the nature of your business, what you need to get started with a POS system may vary. But here are the most popular ones that most companies have:

  • POS terminal: A POS terminal is a device that runs mobile POS software.

Nowadays, store terminals can be laptops, desktop computers, smartphones, or tablets. In the past, cash registers were also POS terminals. However, new mobile payment devices allow associates to pick up, navigate stores, search for products, and better serve customers.

  • Credit card reader: Card readers help keep payments safe while customers shop in-store. There are three ways a device can accept credit cards: read card bars, Reads card chips via EMV, or use NFC (Near Field Communication) to receive payments from mobile payment providers (e.g., ApplePay, Samsung Pay).
  • Receipt printer: While you can get receipts by email, printed receipts are still common for in-store purchases. Customers can use receipts to document their purchases.
  • Barcode scanner: Merchants use barcode scanners to manage their inventory. It also helps them quickly find Information about an item when a customer requests it. We can connect the scanner to a POS terminal via USB or Bluetooth.
  • Drawer for money: Apparently, it’s used to store money paid by customers. The cash drawer has several compartments for different coins and banknotes and connects to a POS terminal via USB or Bluetooth.

Main features of POS system software

Main features of POS system software: Payment process, Inventory management, Customer Relationship Management (CRM), Leadership, Opportunity for omnichannel sales, Advanced Reporting

  • Payment process: This is the main function of any POS software. The software continues the transaction whenever a customer pays for their product, and the company can receive their money. There are 6 types of payments that POS can accept: cash payments, online payments, magstripe credit cards, chip cards, contactless card payments, and cardless transactions (if you need to enter customer credit card information manually).
  • Inventory management: With the software, you keep track of available and sold products. If a restocking trigger is set, the system can notify you when an item is about to run out. This simplifies the inventory management process and reduces the amount of work required.
  • Customer Relationship Management (CRM): You can create an account for each customer from the POS CRM database. It allows you to record purchase history, payment information, and favorite products. It allows you to analyze data and plan better ways to serve your customers.
  • Leadership: Your employees can use this feature to commute to and from work. In addition, you can schedule employee shifts, track their working hours, and generate reports on their performance.
  • Opportunity for omnichannel sales: Omnichannel is on the rise and adapting to online and offline business systems. And to ensure integrated shopping, you need to pay attention to your checkout system.

For example, if a customer is shopping in a store and asks you to look up the price of an item, you can easily reach them and check the Information using a mobile payments POS terminal.

Not only can you tell them the price, but you can also tell them other details such as how much stock is still in stock, is it on sale or maybe the best seller in your store. This type of Information can increase conversion rates and help with better shopping.

  • Advanced Reporting: Apart from administration, advanced reporting is also a very useful feature of the POS system. The system can generate reports for all aspects of your business so you can make informed decisions to increase productivity and profits.

There are usually several preset reports for different purposes, and some POS software even lets you customize the reports according to your needs. The more insights you gain from this report, the better you can allocate resources and reduce unnecessary costs.

The importance of coordination for POS payments

After payment is received from the point of sale, the seller compares the POS data with the sales made within a day/month/year to ensure complete accuracy and transparency. In short, they compare POS sales data with cash flow.

Now the question arises, how often should one make up? It is best to coordinate daily POS card payments. Vendors may encounter obstacles in the daily manual aggregation of POS data; That’s why cloud point of sale systems are the future.

Major processors such as Moneris have enabled cloud POS devices for customers to log in and perform card transactions. In addition, one can store information about the card for future use, and data is received automatically from the ePOS system daily.

Conclusion:

POS systems are essential for any business, be it a small business or a big brand. It helps companies keep track of their accounting and financial status, eliminates mistakes that can be made by humans, and helps with other tasks such as inventory management or CRM.

There are many different point-of-sale systems, and each can offer special features that serve your business better than the others. So make sure you do your research before choosing the latter. The right POS system will help you run your business smoothly and grow it in the future.