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The Truth About POS Fees

Demystifying POS fees is a tall order. Any small retailer that accepts multiple forms of payment cards—including EBT—must get a handle on how much a POS will cost. We’ve created a guide to help retailers understand the truth about POS fees.

Retailers pay payment processing fees via a percentage of the total purchase price. The amount of that fee is reliant on a number of factors, including transaction size, whether the transaction was card-present or card-not-present, and more. In general, in-store (non-ecommerce, PIN-based transactions) are less expensive for retailers to process. That said, even these types of transactions can take a bite out of retailers’ margins as fees begin to add up over a series of small purchases. In total, retailers can rack up a few percent of fees on each purchase.

We’ve put together a helpful guide to help you navigate the world of POS fees.

A Look at POS Fees & Costs


When looking at how much a POS will cost, there are a variety of things to consider. Hardware costs is one of those things, though it does not make up the bulk of the long-term cost. The first step is for a retailer to determine what POS hardware is needed, whether it’s a tablet, cash register, credit card scanner, or receipt printer.

Several years ago, this portion of the cost calculation would have amounted to a more significant expenditure. Many legacy POS terminals ran a minimum of $5,000 for hardware alone. Thankfully, modern cloud-based POS solutions are more reasonably price in the $1,000-$1,500 range, if you purchase the outright. Retailers can also rent these systems for a monthly fee of around $100/month. Most of these POS solutions come standard with a mobile device (smartphone and tablet), a stand, a credit card reader, and a receipt printer.


As many businesses move to the cloud, POS software has followed suite. Cloud POS software, or software-as-a-service (SaaS) models allow retailers to subscribe for monthly services rather than paying upfront fees. Software fees usually include remote data storage, so retailers don’t have to worry about maintaining local servers for POS.

How Much Are Processing Fees?

While not necessarily a POS-specific cost, it’s important to understand how processing fees work. As more POS providers begin offering integrated merchant account services, it makes sense to have a complete perspective on how much these fees cost retailers in addition to POS hardware and software costs. Some POS providers offer a list of merchant accounts from which retailers can choose to pair their POS system. In other cases, retailers use the POS provider as the merchant account.

In the latter circumstance, service fees vary by provider. The Shopify POS, for example, offers different levels:

  • Basic Shopify: $29/month plus 2.7% + 0¢ for in-person credit card transactions
  • Shopify: $79/month plus 2.5% + 0¢ for in-person credit card transactions
  • Advanced Shopify: $299/month plus 2.4% + 0¢ for in-person credit card transactions

Other providers may have no monthly fee but charge on the higher end of credit card processing fees. Some providers offer the choice to stick with your existing merchant account; however, others require you to use their in-house payment processing.

Some retailers like small grocers and non-traditional retailers like farmer’s markets also process electronic benefits transfer (EBT) payments. There are no interchange fees or card association fees for these payments, which are provided by the Federal government. That said, different processors may charge add-on rates for accepting these types of payments. Other POS providers specialize in solutions built to accept these types of payments and may offer streamlined systems that are less expensive.

Choosing the Right POS

Choosing the right POS requires a comprehensive understanding of the costs as well as a retailer’s individual needs. For example, a large brick-and-mortar retailers have different requirements compared tp a farmers market.

As illustrated above, cloud-based solutions often offer retailers the biggest bank for their buck over costly, bulky legacy systems. For one, on-premise POS terminals can be more expensive and take up more counter space, potentially hurting the customer experience (and your pocket book). Traditional software, maintenance and upgrade fees, and fees for hardware and licenses can add up quickly. Training employees on a complicated system on top of that requires additional time and money.

Alternatively, cloud-based POS solution are broken down into simple monthly subscription fees with automatic software updates built-in. Choosing modern, sleek options can free up counter space to help you maximize sales and move through the checkout line quickly. This can be a special bonus for mobile retailers who may require lightweight solutions for on-the-go payment processing. Farmer’s markets and other mobile retailers will be best served to opt for a web-based option that can be run from a smartphone or tablet with Wi-Fi connection.

TotilPay Simplifies Payments

NDG offers a modern solution specifically built for farmer’s markets and other on-the-go retailers looking to process debit, credit, gift, SNAP, WIC and CVB benefits. Our application is designed to enable farmer’s market and small non-traditional retailers the ability to process WIC, SNAP, credit and debit transactions on either an iPod touch, iPhone, or iPad.

When it comes to fees, TotilPay (formerly known as Mobile Market+) connects directly through a secure and encrypted connection and comes with the following features:

  • Process SNAP/WIC CVB/WIC transactions on an iPhone, iPad or iPod touch.
  • Provides the ability to email, text or print receipts.
  • GPS functionality support to enable location services for tracking activity.
  • Small footprint with the ability to operate with no power.
  • Portal to view transactions and online receipts.
  • Devices can be remotely disabled.
  • Email notification for out of state transactions.

Contact us today to learn how we can help you streamline payment acceptance for your small, non-traditional business or farmer’s market.