The History of Restaurant POS Systems and POS Software

Nicole Georgiev
Table of Contents
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    Restaurant management software has been since the late 1900s. It’s constantly evolving, similar to the restaurant industry as a whole. When it comes to POS software and restaurant POS systems, it’s crucial that you utilize the most up-to-date and modern technology. This way, you can take advantage of all the benefits. 

    Restaurant POS software provides business insights such as payroll reports, restaurant sales, labor cost, as well as your restaurant’s busy and slow periods. These business insights allow you as a business owner to understand how your restaurant is performing and manage your restaurant operations

    Modern-day POS software has become a necessity, and it has evolved quite a bit since the beginning of the cash register. The first POS system was created more than 20 years ago, so let’s take a trip down memory lane.

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    The Beginning of Restaurant POS Software

    The first point of sale system was developed following the electrical calculator and computer innovations in the late 1900s. During this time, brick and mortar retailers saw an increase in the use of plastic payments like debit and credit cards. This led restaurants and other hospitality establishments to switch to digital POS hardware

    Each system has different POS features that business owners can use. Recording each sale and transaction through the POS software made it possible for restaurants to look into each POS report. POS reports allow businesses to keep up with their inventory, analyze sales data, and make smart buying decisions. 

    With POS software, restaurants began to process and record order information with increased speed and efficiency. Over time, the standard POS system started to incorporate different integration options, including restaurant POS integrations. Such integrations include restaurant online ordering, customer relationship management, and loyalty program integrations.

    The first restaurant POS systems weren’t as high-tech as they are today. In fact, the first computer system that was widely used in the restaurant industry was the electronic cash register. It was created by IBM in the mid-1970s. 

    Like most technology, restaurant technology wasn’t at its best when first created and used. Early POS systems provided restaurants with the advantage of calculating how much money they should deposit into the bank compared to what should stay in the cash register. 

    However, this was the bulk of what point-of-sale systems could provide. In fact, most restaurants didn’t have the ability to process credit card transactions through POS. Instead, they had to take credit card payments over the phone, by hand.

    Key Takeaway: Technology improves the restaurant experience for both business owners and their customers. A restaurant POS system allows businesses to implement online ordering, delivery, and loyalty programs, and utilize real-time analytics to run their establishments. 

    The Evolution of Restaurant POS Systems

    In the 1980s, countless industries and business processes changed all thanks to the Internet. With the help of the Internet, transactions became faster, more secure and eCommerce accounting processes became better. This is also because the front of house (FOH) and back of house (BOH) operations became virtually connected. 

    With the Internet changing how both operators and customers did business, restaurants began looking into ways to speed up their daily operations. They started exploring options to process credit card payments via the internet. 

    Gene Mosher was the first person to develop a graphical POS software system in 1986. He adapted the innovative POS technology for his deli, and it included a touch screen interface and colored widgets.

    In 1992, the first POS software system was launched for Windows by Microsoft. In the years following, restaurant technology really started to gain traction, especially when it came to POS software.

    Later generations of restaurant POS software started to include mobile card readers, touch screen functions, and shared terminals. Those shared terminals would communicate internally with accounting systems. Today, many of these POS systems are web-enabled and offer cloud-based functions that allow remote sales and inventory tracking

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    Modern Restaurant POS Systems In the Restaurant Industry

    Restaurant tech improves dining experiences thanks to speed and efficiency. This leads to improved customer satisfaction and greater average order volumes (AOV) from customers. 

    In order for restaurants to meet these demands, they need to invest in innovative restaurant technology. This is possible with cloud-based solutions that improve operational efficiency and the customer experience. 

    Modern restaurant point of sale systems are improving the restaurant industry through: 

    • The standards of service. Streamlining business processes allows restaurants to work on improving their quality of service and guest experiences. POS systems make it possible for wait staff and bar staff to stay on the floor instead of running back and forth to the kitchen or the cash register. This way, they can tend to their customers faster and address problems as they arise. 
    • Decreasing labor. Most establishments look into different ways to decrease their restaurant monthly expenses. One way to do this is by efficiently distributing labor. A POS report can help you identify restaurant seasonality, including the busy season and slow season for your establishment. It also provides insight into peak periods throughout the week. This allows you to strategically schedule employees based on the demand and avoid over-scheduling. This is especially important during a restaurant labor shortage

    Cloud-Based Restaurant POS Software

    Many restaurants invest in cloud-based POS software. This is a POS system that relies on a Wi-Fi connection instead of a closed network that is only accessible on-site. 

    With cloud-based restaurant POS systems, a restaurant manager or owner can access POS reports from any smart device remotely. These reports can include updated inventory levels, sales information, and customer feedback. 

    This kind of accessibility helps keep operations running smoothly and increases profitability. Real-time data makes it possible to come up with real-time solutions. Be sure to consider whether you want an Apple POS or Android POS.

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    POS Systems In the Future: 3 Ways They’re Evolving

    Like any kind of technology, POS systems will continue to evolve. These are 3 ways POS systems are continuing to evolve. 

    1. Contactless payments. These days, society is leaning towards contactless payments and systems that support that. Such payments include Apple Pay, Samsung Pay, Google Wallet, and PayPal mobile payments. Modern POS vendors support these payments, but there are still some that have yet to adopt this feature. Many vendors will look to strengthen their security in order to protect customer data and offer contactless payment options across all of their POS software. 
    2. Customer connections. New restaurant technology will focus on connecting with customers, reaching more customers through mobile devices, and selling suggested products and services. It's possible to do this by capturing customer data through a restaurant loyalty program and a customer facing display. Customer data, such as ordering history and preferences, is also useful for creating restaurant marketing strategies
    3. Mobile ordering. Another future POS system addition is mobile food ordering features. This allows cashiers and services to place customer orders from anywhere in the restaurant. The orders can integrate with POS software to track inventory levels and total sales. It's also possible to complete mobile orders and payments using a mobile point of sale system.
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    Frequently Asked Questions About Restaurant POS Systems

    Since the late 1800s, restaurant technology innovations have come a long way. POS systems now provide thorough business insights regarding sales, inventory, and customers. 

    There are also add-on features for most POS systems that make it possible to accept mobile payments and integrate an online ordering platform. Modern technology allows restaurant owners to make accurate business decisions that drive profits. 

    To learn more about the history of restaurant POS systems and how they’ve evolved, read the following commonly asked questions and answers: 

    How Old Is the POS System?

    The first POS system was invented in 1879; however, the first computer-driven cash register was developed in 1973 by IBM. This was after the creation of the first cash register that could convert currencies. 

    Who Created Point of Sale System?

    James Ritty, an American shopkeeper, invented the point-of-sale system in 1879. It was originally called “Ritty’s Incorruptible Cashier”, but was later referred to as the cash register. In 1973, IBM developed the first computer-driven cash register that is similar to the POS system we know today. It was also the first POS system used by the restaurant industry. 

    What Are the Different Types of POS?

    The different types of POS systems include: 

    • Terminal POS
    • Mobile POS
    • Tablet POS
    • Online POS
    • Multichannel POS
    • Self-order kiosk POS
    • Open-source POS
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