The advent of cloud computing has given birth to the possibility of POS systems to be deployed as software as a service, which can be accessed directly from the Internet using any browser. Using the previous advances in the communication protocols for POS’s control of hardware, cloud-based POS systems are independent from platform and operating system limitations. Cloud-based POS systems are also created to be compatible with a wide range of POS hardware and sometimes tablets such as Apple’s IPad. Thus cloud-based POS also helped expand POS systems to mobile devices, such as tablet computers or smartphones. These devices can also act as barcode readers using a built-in camera and as payment terminals using built-in NFC technology or an external payment card reader. A number of POS companies built their software specifically to be cloud-based. Other businesses who launched pre-2000s have since adapted their software to evolving technology.

Cloud-based POS systems are different from traditional POS largely because user data, including sales and inventory, are not stored locally, but in a remote server. The POS system is also not run locally, so there is no installation required.

Depending on the POS vendor and the terms of contract, compared to traditional on-premises POS installation, the software is more likely to be continually updated by the developer with more useful features and better performance in terms of computer resources at the remote server and in terms of lesser bugs and errors.

Other advantages of a cloud-based POS are instant centralization of data (important especially to chain stores), ability to access data from anywhere there is internet connection, and lower start-up costs.

Cloud based POS requires an internet connection. For this reason it important to use a device which has its own 3G capability in case the device’s primary internet goes down. In addition to being significantly less expensive than traditional legacy point of sale systems, the real strength of a cloud based point of sale system is that there are developers all over the world creating software applications for cloud based POS. Cloud based POS systems are often described as future proof as new applications are constantly being conceived and built.

A number of noted emerging cloud-based POS systems came on the scene less than a decade or even half a decade back. These systems are usually designed for restaurants, small and medium-sized retail operations with fairly simple sale processes as can be culled from POS system review sites. It appears from such software reviews that enterprise-level cloud-based POS systems are currently lacking in the market. “Enterprise-level” here means that the inventory should be capable of handling a large number of records, such as required by grocery stores and supermarkets. It can also mean that the system—software and cloud server—must be capable of generating reports such as analytics of sale against inventory for both a single and multiple outlets that are interlinked for administration by the headquarters of the business operation.

POS vendors of such cloud based systems should also have a strong contingency plan for the breakdown of their remote server such as represented by fail-over server support. However, sometimes even a major data center can fail completely, such as in a fire. On-premises installations are therefore sometimes seen alongside cloud-based implementation to preempt such incidents, especially for businesses with very high traffic. However the on-premises installations may not have the most up-to-date inventory and membership information.

For such contingency, a more innovative though highly complex approach for the developer is to have a trimmed down version of the POS system installed on the cashier computer at the outlet. On a daily basis the latest inventory and membership information from the remote server is automatically updated into the local database. Thus should the remote server fail, the cashier can switch over to the local sale window without disrupting sales. When the remote server is restored and the cashier switches over to the cloud system, the locally processed sale records are then automatically submitted to the remote system, thus maintaining the integrity of the remote database.