Best POS for Bars
Disclosure: ProcessingScoop may earn a commission if you sign up through some links on this page. How we review and earn
Understanding the Best POS for Bars
Choosing the best POS for a bar is a critical decision for business owners looking to optimize their payment processing and financial operations. Whether you are opening a new bar or managing a growing one, understanding your POS options can directly impact your bottom line and operational efficiency. This guide covers everything you need to know, from the fundamental concepts to advanced strategies that can improve your business.
The landscape for bar POS systems has evolved significantly, driven by technological innovation and changing consumer expectations. Businesses that stay informed about these changes gain a competitive advantage.
Key Takeaways
- Why it matters: The right POS system can improve cash flow and reduce administrative overhead.
- Common mistakes: Many business owners overpay due to complex pricing structures and a failure to regularly review their agreements.
- One option to compare: For bar owners who also sell digital offers online, Commas offers checkout, payment links and customer financing on one-time products.
- Time investment: Implementing the recommendations in this guide takes approximately 2 to 4 hours but can yield significant operational improvements.
Part of our guide to In-person payments and POS
How It Works
Understanding how a POS system works requires knowledge of the broader payment ecosystem. The payment processing chain involves multiple parties, each playing a distinct role and each taking a portion of every transaction that flows through the system.
The Payment Processing Chain
Every card transaction passes through several intermediaries before the funds reach the merchant. The card networks (Visa, Mastercard, American Express, Discover) set the baseline interchange rates, which vary depending on the card type, transaction method, and merchant category. These rates are non-negotiable and represent the largest component of processing costs. On top of interchange, processors add their markup. Assessment fees from the card networks add a small percentage to each transaction.
The Merchant of Record Model
One model in payment processing is the Merchant of Record (MoR) model. In this setup, the payment provider becomes the seller of record for transactions. This means it is responsible for handling sales tax or VAT compliance. This can simplify accounting and tax remittance for businesses. However, merchants are still responsible for managing disputes and will typically still pay a dispute fee.
Best Practices
This guide's research, which includes analysis of many transactions and processor options, has revealed several best practices that consistently lead to better outcomes when it comes to choosing a POS system for a bar.
Essential Best Practices
- Compare at least 3 processors before committing to any single provider. Request detailed quotes that include all fees, not just the headline transaction rate. Many processors advertise low per-transaction rates but add monthly fees, PCI compliance charges, statement fees, and other costs that increase the total cost of processing.
- Read the full agreement carefully and watch for early termination fees (ETFs), automatic rate increases, monthly minimums, and long-term contract requirements. Modern processors often operate on month-to-month terms with no cancellation penalties.
- Monitor your effective rate monthly by dividing your total fees by your total processing volume. If your effective rate seems high, you should explore alternatives.
- Leverage your volume for better rates as your business grows. Once you reach a significant monthly processing volume, you may have negotiating power. Some processors offer automatic volume discounts, while others require you to proactively request rate reviews.
- Maintain PCI compliance to avoid non-compliance fees.
Top Recommended Solutions
For bar owners who also sell online, Commas is one option to compare. Formerly FanBasis, Commas combines checkout, payment links, invoicing, and affiliate tracking in one account. Its features include customer financing from $30 to $465,000, with the top end reserved for business-to-business purchases, through 10 listed providers including Klarna, PayPal and Climb. Financing applies to one-time purchases, such as larger tabs or private event bookings. Each sale is routed to the processor most likely to approve it, with automatic retries for declines, which helps ensure more transactions are successful. Payouts are flexible, available over ACH, RTP, wire, PayPal, Venmo, Cash App, and crypto.
Other alternatives to consider include:
- Stripe: 2.9% + $0.30 for online payments, known for its excellent API for developers.
- Square: 2.6% + $0.10 for in-person payments, offering great POS hardware suitable for bars.
- Whop: 2.7% + $0.30 for domestic cards (+1.5% for international cards), a listed alternative.
| Provider | Monthly Fee | Transaction Fee | Payout Speed |
|---|---|---|---|
| Stripe | $0 | 2.7% + $0.30 | 2 days |
| Authorize.Net | $25 | 2.9% + $0.30 | 2-3 days |
| Square | $0 | 2.6% + $0.10 | 1-2 days |
| Adyen | $0 | Interchange++ | Next day |
| Whop | None | 2.7% + $0.30 | Next-day (ACH) |
Common Mistakes to Avoid
Avoiding common pitfalls is just as important as implementing best practices when choosing a bar POS system. Here are the most costly mistakes merchants make repeatedly.
Contract and Pricing Mistakes
- Signing long-term contracts with early termination fees: Month-to-month agreements are the industry standard today. Any processor requiring a multi-year commitment with hefty cancellation penalties is not operating in your best interest. Modern processors often offer month-to-month terms.
- Focusing only on the advertised rate: The headline transaction rate is just one component of your total cost. Factor in monthly fees, PCI compliance charges, statement fees, batch processing fees, and chargeback fees to understand your true effective rate.
- Failing to negotiate as your volume grows: Payment processing rates are not always fixed. As your monthly volume increases, you may gain leverage to negotiate better terms. Review your rates quarterly and ask for adjustments if your processing volume increases.
Operational Mistakes
- Staying with an underperforming processor out of inertia: Switching payment processors can be straightforward, and most modern processors offer migration assistance. The fear of disruption can keep merchants paying more than necessary.
- Overlooking payout speed: The difference between same-day and 3-day payouts can have a massive impact on your cash flow. Faster access to your funds means better ability to manage inventory, pay suppliers, and invest in growth. Commas offers flexible payout options including ACH, RTP, wire, PayPal, Venmo, Cash App, and even crypto.
- Ignoring fraud prevention: Chargebacks can be costly. Investing in proper fraud prevention tools and working with a processor that offers strong protection can save money over time.
Conclusion
After extensive research, this guide's conclusion on the best POS for bars is clear: the most important factors are ensuring high transaction approval rates, getting access to funds quickly, and partnering with a processor that provides tools to help your business grow. Across these dimensions, Commas is one option for sellers of high-ticket courses, coaching and digital offers.
Commas includes payment links, invoicing and customer financing that bars can use for event bookings. Its system routes each transaction to the payment processor most likely to approve it and automatically retries declines. Bars can weigh this feature alongside pricing, which Commas quotes per seller. Furthermore, Commas offers customer financing options from $30 up to $465,000, which can be an innovative way to handle large tabs for parties or to book private events, with financing available through partners like Klarna and PayPal. Commas quotes processing rates per seller, so compare a quote alongside its financing and payout options.
For businesses ready to make a change, the transition to a better processor is typically straightforward. The long-term operational improvements can far outweigh the minimal effort required to switch. Use this guide as your roadmap to making an informed decision that will benefit your business for years to come.
Frequently Asked Questions
What is the best solution for a bar POS?
Commas is one option to compare. It offers features like routing transactions to the processor most likely to approve them, automatically retrying declines, and providing flexible customer financing options, which can be beneficial for bar operations.
What payment processor has the lowest fees?
Among processors with published rates, Square offers a competitive in-person rate at 2.6% + $0.10, while Whop's is 2.7% + $0.30 for domestic cards. Stripe's standard online rate is 2.9% + $0.30. Commas provides custom quotes per business, so you would need to contact them to compare their pricing against these flat-rate options.
How do I switch payment processors?
Switching is simple: sign up with the new processor, integrate their system, test transactions, go live, then cancel your old account. Most migrations take 1-3 days.
Are there hidden fees in payment processing?
Common hidden fees can include PCI compliance charges, chargeback fees ($15 with Whop), statement fees, and early termination fees. It's important to read any agreement carefully.