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Point of Sale (POS) Software Market 2022


Introduction to POS

A POS system or point of sale system is a computerized network operated by the main computer, which links to checkout terminals. It’s simply a system that helps businesses complete sales transactions. You can think of it as a super-powered cash register.

Point-of-sale (POS) software is a software system used by consumer-facing business owners for managing the entire lifecycle of order management and conducting transactions at the customers’ points of contact. With rising internet penetration and a growing number of touch points of a single business, POS software vendors are leveraging the opportunity to grow in the industry. With rising digitalization and multi-channel business strategizing, the POS software market is expected to experience more growth. POS software is deployed by businesses to fulfill their customer orders, manage inventories, and complete transactions.

Small and medium-sized enterprises (SMEs) and large businesses have outlets (physical stores) and online websites, all connected through their inventories and POS systems. Customer data is collected through various details about the customer through their history and transaction executions and further used for analysis and understanding customer behaviors and making business decisions.


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Market size & Growth rate

The global point of sale software market size was valued at USD 9.26 billion in 2020 and is expected to register a compound annual growth rate (CAGR) of 9.5% from 2021 to 2028. The COVID-19 pandemic negatively affected several business sectors including retail, restaurant, travel, and entertainment, subsequently affecting the profitability of point of sale (POS) software vendors.

Market Drivers

POS solutions have made in-roads in several sectors owing to their ability to offer custom and advanced analytical functions. These terminals or systems backed by powerful software capabilities help business operators to ease out day-to-day business activities while helping them focus on their core business activities. Increased demand for tailored-made point of sale or check-out systems across diverse business applications will result in the development of sophisticated software solutions that form the core element of these systems. The development of software that supports an array of sectors while offering analytical capabilities to monitor the data captured through daily business operations is expected to upkeep the market growth over the forecast period.

The global rise in internet usage in the wake of COVID-19, growing adoption of business automation systems, and a surge in cloud-based software adoption are some of the key factors driving the growth of the current point of sale software market. However, network privacy and security concerns, along with difficulty in implementation due to high costs are hindering the market growth.

Market Trends

Businesses are starting to integrate cloud technology into their POS systems. By using a cloud-based point of sale system, businesses could easily access data in real-time. Forbes reported that 61% of retailers consider getting cloud-based POS for their business, and 60% of new retailers ask for cloud-based POS rather than traditional POS. It was predicted that there would be a 50% increase in cloud-based POS adoption in 2021.

Mobile payment and e-wallets are quickly becoming a huge trend, heading toward a cashless future where you could pay with just a tap of a button. By having a POS system that accepts digital payments, businesses would maintain competitiveness while improving their customer service.

Challenges & Risks

Network privacy and security concerns, along with difficulty in implementation due to high costs are hindering the market growth.

One of the biggest challenges of managing a point of sale system is the potential for cyberattacks. POS systems present a large attack surface from the terminal itself to endpoints where data is stored.  Unfortunately, older POS systems have weak security because they don’t have proper encryption, leaving them vulnerable to attacks and other POS problems. POS terminals are also common attack surfaces because they don’t meet PCI compliance. This makes them an attractive target for hackers.

Retailers often rely on vendors or third parties to manage aspects of their business, including POS systems. A vendor could simply be responsible for the POS device or terminal, or for an entire network. If you don’t know how your vendors are managing parts of your POS systems, or what tools they’re using, POS problems like cyber threats, connectivity issues, or noncompliance may result.

Every retail operation is different which is why they require different POS support. Choosing the wrong POS system or vendor can be costly, especially if your business exceeds charge limits. This can be especially true for smaller businesses that use a cloud-based POS application that limits the number of transactions per month. If you are a growing business and you choose software or systems that can’t scale, it may result in accidental violations that freeze your account or limit sales. If your POS partner has limited reporting capabilities, it will be difficult for your business to make accurate projections for marketing and revenue purposes.


The COVID-19 pandemic is changing the business landscape wherein end-users are compelled to use modern point-of-sale technology. Upgraded POS solutions to facilitate online orders & payments and unified analytics would help understand & meet new customer expectations, adapt to market change, prepare for future lockdowns or similar situations, and improve the ability to sell both online and in-store. The retail, packaged food service, and other businesses opted for online sales channels (e-commerce) to cater to consumer needs during the pandemic by offering contactless product delivery at the doorstep. POS vendors leveraged this opportunity to upgrade solutions for retailers and restaurateurs to enable their management of both online and in-store sale information and payment option. The market vendors found new growth avenues by capturing the changing demand scenario.

On the basis of the operating system, the POS software market is segmented into DOS system, Linux system, windows system, MAC, and android. In 2021, the android segment held the largest share in the market due to benefits offered by the android operating systems such as flexibility, customization, cost, high durability, easy integration, and others.

On the basis of usage, the POS software market is segmented into online and offline. In 2021, the online segment held a larger share in the market as it allows the restaurant to accept orders and manage transactions in a secure way.

On the basis of application, the software market is segmented into employee clocking, inventory management, tracking & reporting, tablet compatibility, credit/debit card processing, receipt printing, accounting integration, menu building, and others. In 2021, the inventory management segment held the largest share in the market due to the high need to manage inventory which includes when to order, how much to order and more.

On the basis of the deployment model, the point of sale software market can be segmented into on-premise and cloud. In 2021, the cloud segment held a larger share in the market due to the availability of a large number of cloud-based restaurant POS software, managing costs, taking data-driven decisions, and improved customer experience.

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