POS Terminal: What is it and how to choose one in HK?

Accepting e-payment methods is essential for any retailer. The decision of implementing these payments merchants can highly influence consumers’ desires. However, how retailers could both receive credit cards and mobile payment?

Consumer habits around the globe are constantly changing, and e-payment has started to take over cash as the primary form of payment for transactions. According to The 2022 Global Payments Report released by FIS, credit cards and e-wallets are still the most regularly used payment methods for shoppers in Hong Kong, accounting for almost 80% of all transactions. On the contrary, cash payments accounted for only 10% of the transaction value. Due to the ongoing COVID-19 pandemic and the launch of the Consumption Voucher Scheme, consumers are now accustomed to contactless payments, ultimately prompting the widespread use of e-payment. As outlined in Visa Back to Business Hong Kong Study, 2022 Small Business Outlook Visa, 90% of the small enterprises interviewed, expressed that new digital payment methods have become the foundation of business development.

This study indicates that e-payment methods are essential for any retailer, especially because the decision of implementing these payments merchants can highly influence consumers’ desires.

So, what is a POS system? How can a smart POS terminal drive your business? How do you select a suitable one? And how do you apply for it?

What is a POS (Point of Sale) system?

The point of sale system verifies the credit cards and e-wallets of the customers a card reader or scanner (point of sale terminal, also known as a credit card machine), providing an integrated payment service for the merchant. Customers have various options as payment methods continue to be at their disposal, for example, credit cards or e-wallets(such as Alipay and WeChat Pay). All in all, the POS system enhances customer experience and transaction convenience.

Enhance Operational Efficiency with a Smart POS Terminal

Due to the ongoing COVID-19 pandemic, public awareness of hygiene has significantly increased. Consumers tend to pay with the e-payment method, minimising physical contact with cash, which evidently carries bacteria and germs. E-payments allow customers to shop without worries providing healthy and safety procedures to staff and thus reducing the chances of bacterial spread. At the same time, the widespread use of smartphones further popularised digital wallets for payments, such as Apple Pay, Google Pay and Samsung Pay. 

In addition, merchants can avoid collecting counterfeit money and errors when handing through e-payment methods, reducing the manpower for finance verification and depositing at the bank. Merchants can focus on developing their business and boosting the operational efficiency of a business. 

Nowadays, most e-payment service providers offer top-up services to merchants. Merchants can manage and review transaction records, sales reports, sales analysis and market insights on a merchant reporting portal provided the service providers, aiding them in strategy formulation.

Some of the e-payment service providers offer an all-in-one merchant operations management platform to their clients, integrating the complex operational data of the business for more efficient and convenient strategy implementation.

How to choose a POS Terminal?

E-payment methods create many business opportunities for merchants. However, choosing an unsuitable service provider can lead to an outcome that is opposite to what you anticipated, leaving your customers dissatisfied and causing your sales to drop. If you are in preparation to open a shop in Hong Kong and currently upgrading your cashier equipment, note the following points to determine the best Hong Kong point of sale terminal for your business:

The features of a POS terminal: According to the 2022 Global Payments Report, Alipay HK and WeChat Pay HK are the most popular payment methods in Hong Kong. Many mobile wallets roll out discounts and offer stamps for cash voucher redemption, incentivising their customers to purchase. If the POS terminal only accepts payments tap card, insert card, and swipe card, then it is outdated. Most of the smart POS terminals now have cameras and support QR code payments, allowing customers to choose their most convenient payment method, ultimately enhancing the shopping experience.

Security: Your choice of POS terminal should be complied with the PCI DSS standards, protecting the data of your customers’ credit cards. Established the 5 founding members (Visa, Mastercard, American Express, Discover and JCB) of the PCI Security Standards Council, PCI (Payment Card Industry Data Security Standard) sets the strictest compliance for data protection.

The Fees of Terminal Machine: The amount of handling fee (MDR) that e-payment service providers charge merchants is based upon transaction amount, estimated to be usually between 1.2 to 5%. The industry category of the merchant will also affect the amount of the handling fee. Apart from that, some of the service providers will charge merchants registration fees, account set up fees and monthly subscription fees. When determining the suitable e-payment service provider, merchants should take the factors of terminal fees and handling fees into account. Pay attention to any possible hidden charge.

Merchant Support: As mentioned, the merchant reporting portal developed e-payment service providers is crucial, since it can reduce administrative time, making it easy for business owners to manage the operation of their company.

Although most of the POS terminals have user-friendly interfaces, the e-payment service provider may not provide local support. If faced with failed transactions, transaction reversal, or errors, the service provider should be able to offer solutions and immediate assistance.

Payment Period: The average length of the payment period of the payment platform ranges from 7 to 14 days, but the actual length can vary due to the nature of the business. If the payment period is too long, the cash flow will possibly be affected. Read all the terms and conditions outlined the platform clearly before selecting a suitable one, ensuring that a reasonable length of time is given for the payment.

Apply for HK POS Terminal

The application procedure for an HK POS terminal is not complicated at all. As long as you are a registered merchant in Hong Kong, you can apply for Hong Kong POS terminal with the Business Registration, monthly bank account statement, and copies of the ID cards of the shareholders or business owners.

Even though there are multiple payment methods on the market, merchants are not required to apply for the Hong Kong POS terminal through each of the payment channels. All they need to do is to apply for a one-stop POS solution through a payment service provider such as KPay, which supports 15 payment channels, and multiple mobile wallets, specifically Apple Pay, Google Pay and Samsung Pay, perfect for streamlining the contract process.

Besides, KPay POS solution offers a high level of price transparency and does not require a rental fee or installation fee. With KPay, the settlement amount will quickly arrive in your bank account within a timeframe of 2 days, ensuring smooth cash flow.

What’s more, KPay has an all-rounded support service for the merchants, including POS tutorial, complimentary maintenance and repair, and merchant reporting portal, helping businesses expand and secure customers, increasing market competitiveness. KConnect, the one-stop merchant operation and management platform of KPay, integrates multiple tools and services to give solutions to operational issues, digitise the business data into useful information and expand the businesses for the merchants.