What are Corporate Credit Cards? – Different Types of Cards
February 12, 2025
Follow the Money Trail In recent months, there has been a spate of disclosures around the world about how banks are compromising on customer identification procedures and are indulging in money laundering and other unsavory activities. From the US to India and the shadow banking system around the world including China, regulators have realized that […]
What is FinTech and how is it a Game Changer for BFSI firms? Anybody with a passing curiosity about the world of banking and finance and how technology plays an important role in the operations of such firms would surely have come across the term FinTech. Used in multiple contexts and with a wide variety […]
Prima facie, capital budgeting may seem like a very simple task. After all, it has just 3 steps. The first is to find the cash flows, the second is to find the appropriate discount rate that represents the time value and riskiness of those cash flows and the third step is to use both these […]
Lyft is one of the most famous tech unicorns in the world. There was tremendous amount of buzz in the market regarding the Lyft IPO. This is the reason that the company has been able to garner a valuation of close to $24 billion. This astronomical valuation is despite the fact that the company has […]
The manner in which startup companies obtain their financing can have a very large impact on the future of their business. In the previous articles, we have already discussed how bootstrapping as well as investments by professional investors work. Both of these approaches have their own advantages and disadvantages. Up until recently, it was assumed […]
With the advent of technology, more and more people have started accepting digital payments. This means that corporations have to provide their customers the option to make payments using a wide variety of payment methods. Some of these payment methods are electronic whereas others are not. Commercial banks have identified the possibility of providing good services to their clients by providing an automated point of sale system which helps these corporations provide more convenience to their customers.
In this article, we will have a closer look at what point-of-sale systems are and how commercial banks utilize them to provide value-added services to their customers.
A point-of-sale system is a combination of hardware and software which allows any merchant to take payments from their customers. The point-of-sale system has been created to accept payments from a wide variety of payment methods. This can include traditional methods such as checks and cash. On the other hand, it generally includes more modern methods such as credit cards with magnetic stripes, credit cards with integrated chips, mobile wallets, and digital payments using the quick response (QR) code.
A point-of-sale system is a set of hardware and software which communicates with other banks and payment processors in order to make digital and contactless payments possible. Since most of the sales in the developed world are done using electronic payment methods, a point-of-sale system becomes very important.
Commercial banks provide their customers with this point-of-sale service in return for a fee. Commercial banks charge the customer's account, provide settlement data at the end of the day and transfer the cash to the bank account of the merchant without any significant delay.
Point of sale systems are very important for corporations across the world. This is because a lot of purchases made by the modern consumer are impulse purchases made instantaneously. Hence, businesses want to have a point-of-sale system that allows consumers to have as many payment methods as possible, and also the payment should be processed as quickly as possible. Businesses across the world have the need for a high-tech point of sale system which they can strategically utilize in order to grow their business. Commercial banks have the capability to provide these services to these business houses.
Commercial banks charge a transaction fee when funds are routed through their systems. Hence, if a merchant receives $100 via a point-of-sale system, they may receive only $98 after deducting a commission. The percentage of commission being taken becomes smaller and smaller as the volume of transactions increases.
Large-scale retailers pay a very small percentage of their revenues to commercial banks. Revenue from point-of-sale systems is a significant contributor to the overall revenue being generated by commercial banks.
Nowadays, banks have started facing some competition from newer more technologically advanced fintech companies. However, even to date, the business of point-of-sale systems is almost completely controlled by commercial banks.
There are many benefits provided by point-of-sale software systems which make them very popular amongst businesses. The details of these benefits have been mentioned below:
The bottom line is that point-of-sale systems are a very important commercial banking service that is offered to corporate clients. Point of sale systems has moved beyond being transactional devices to becoming strategic marketing devices.
Your email address will not be published. Required fields are marked *