Point of sale (POS) software is the billing software on a shop's counter. It records each order, prints the bill and sends the amount to the card machine. It also knows the menu, the prices, the stock and the shop's loyalty scheme.
Consider a sweet shop in Kolkata during the Diwali rush. The staff scan a 1 kg box of kaju katli on the billing screen: ₹1,100. The POS software adds the GST and prints the bill. It sends the amount to the POS terminal, so the staff do not have to type it again. When the payment is approved, the software marks the bill as paid. It also reduces the shop's stock of kaju katli boxes by one.
Here is the unusual part. Many POS software companies sell the software together with payment processing. The shop pays a small fee on every card payment. That fee pays for the payment, and it also pays for much of the software. This is an example of embedded finance, which means financial services sold inside software that a business already uses. Behind the software, an acquiring bank still processes each payment.
Different kinds of shop need different POS software. A restaurant needs table orders and kitchen screens, so it uses restaurant POS. A supermarket needs barcodes and stock records across many stores, so it uses retail POS. A salon needs appointments, so it uses salon and spa software. A college canteen may use a campus card system, where students pay with their student card.
POS software also connects to loyalty programme software. This software gives customers points on every visit, which they can use later for a discount.