Point of sale progress
Notes on the future of POS, according to POS companies
What’s the future of point of sale? It depends who you ask! I’ve talked to people who believe they’re indispensable to modern restaurants and those who believe they’re irrelevant and dying… and everything in between.
Still, popular point of sale companies are growing. Take Toast, for example: In the first three months of this year, Toast signed its biggest deal to date with Applebee’s parent Dine Brands, and netted 6,000 new restaurant locations. Its software processed over $40 billion in transactions. It launched a huge marketing campaign that plastered San Francisco’s public transit stations with bright orange ads they said was aimed at “restaurant people” — though no passenger could miss them. Toast, perhaps more than any other restaurant point of sale, has managed to launch itself into diner consciousness.
A decade ago, the point of sale was a clunky piece of hardware physically wired to the restaurant. Now, they’re cloud-based systems accessible on tiny screens and customizable to handle operations at all types of restaurants. (Plus, there’s that longstanding rumor-slash-poorly kept secret about the major restaurant tech player launching their own point of sale system…. eventually.)
I’ve talked to a handful of point of sale leaders over the past few weeks, and here’s how they see the future of POS:
Actually pocket-sized handhelds
Square showed off its new handhelds during a May event in San Francisco. I was surprised by its compact size when I picked it up. (And it was obvious that Square’s team was very, very proud of the design.)
Since the earliest pay-at-the-table handhelds arrived in America — years after they showed up in Europe — the hardware design standard was, roughly, “It fits in your back pocket.”
But, as one of Square’s comms reps told me during the SF launch event, “Pockets are subjective!”
The company’s newest handheld is objectively pocket-sized. It’s close to the same size as an iPhone, slightly thicker on one end. It weighs about the same, and fit in the pocket of every garment I was wearing.
Beyond its design, Square’s handheld isn’t just for taking orders at the table or accepting payments — though it does that. It can function as a point of sale system on its own, meaning restaurants of any size or stripe can run their entire business from just one handheld.
More:
Alerts!
If a point of sale system is a restaurant’s brain, then shouldn’t it think for the restaurant’s staff? At least a little bit?
During an interview for my podcast, the Simmer, Krystle Mobayeni, the co-founder of BentoBox and now head of restaurants at BentoBox acquirer Fiserv, explained features of her company’s new point of sale system. It’s built for “upper market” restaurants, or those that do more than $1 million in annual processing volume.
One software feature, called floor cues, flags tables that require attention, turning them a different color on the screen so staff knows the table hasn’t been touched in a while.
“These little things… it’s not rocket science,” Mobayeni said of features inside the point of sale. “It’s more than just inputting an order. It’s, how do we make service better?”
[Expedite <3s technology that affects service at higher-end restaurants.]
Like many point of sale features for full service restaurants, these cues are meant to help, not replace, great human service. “We’re not telling you what you should do because this person’s been waiting a long time. That’s for the restaurant to decide, that’s the human element. But we’re helping you identify that without having to think too much,” she said.
Listen to our interview (begins at 15:25):
Democratization
Toast, the popular point of sale system that got its start with independent restaurants, is now chasing enterprise — chain — brands. This year, the company cut deals with Applebee’s and Topgolf to put its point of sale tech in more locations as it chases those sweet, sweet multi-unit deals.
During a late May interview, also for the Simmer, Toast’s chief marketing officer, Kelly Esten, pushed back on my assertion that the company was abandoning independent restaurants to chase bigger brands. Larger restaurant brands have long used Toast, she said, and the company has worked to grow with them. But they aren’t playing favorites.
“Everyone on Toast from Applebee’s and Marriott down to the coffee shop around the corner are on the same platform, same version,” she said. “We do not do what I would call customization.”
That doesn’t mean Toast won’t build a feature that a restaurant like Applebee’s needs, it means if they build it for one customer, they build it for everyone.
“The innovation is flowing both ways,” Esten said, mentioning an upcoming Toast customer advisory board retreat that would bring together Toast’s independent advisory board, made up of a handful of leaders from small restaurants on Toast’s platform, and its enterprise advisory board, which includes execs from Caribou Coffee and Din Tai Fung among others.
“They really wanted to meet each other,” Esten said. “We think they’re going to learn a lot from each other.”
(She wouldn’t let me in. I asked.)
Listen to our interview (begins at 11:03):
AI, AI, AI
Are you even a restaurant software company if you’re not talking about how AI is going to enhance operations for restaurants?
The more point of sale companies have expanded, the more data they have on every facet of restaurant operations — diners, suppliers, inventory, revenue, costs, popular items, and more — the smarter the software can get at running it all.
There are too many individual features for me to keep track of, but it’s safe to assume that every part of a point of sale is going to get an AI glow-up. Actually, when Toast announced its big AI play, Toast IQ, it described it as a layer of technology that would live on top of all of Toast’s products. It can suggest upsells for servers to offer in the moment, help with marketing efforts, and track restaurant advertising, among other functions.
In a statement that mirrors literally any other restaurant technology executive’s stance, Toast’s president and co-founder Steve Fredette called ToastIQ “the beginning of a new stage of innovation” to help restaurant workers “elevate their craft.”
Hey, where’d the news go?
I’ve moved the links I drop at the end of these newsletters to an end-of-week edition sent to paid subscribers only. Restaurant Links includes relevant stories and news coverage + Expedite’s opinionated analysis.
The first edition is unlocked, but subsequent editions live behind the paywall.
Per Wired:
I’m not sure how long Substack will remain a viable outlet for indie journalists like me. If you appreciate this work, please consider upgrading to paid status.
You mentioned how a decade ago, POS systems were clunky pieces of hardware physically wired to restaurants, and that's absolutely true.
But I think the biggest change in POS isn't actually the tech improvements... it's the underlying business model. Toast and Square have fundamentally shifted how POS companies make money. They're not selling software anymore, they're payment processors who happen to offer great software.
Every feature they build, every time they expand their platform, they're increasing their addressable market and capturing more payment volume. When Toast adds inventory management or Square builds employee scheduling, these aren't just features... they're hooks to route more transactions through their payment rails.
This creates an interesting dynamic where their success is tied directly to their customers' growth. The more a restaurant processes, the more revenue these companies generate. That's why they can offer the software at little to no cost while continuously investing in new capabilities.
The tech improvements are impressive, but this business model transformation is what really changed the game. It democratized access to sophisticated POS systems and created a flywheel where expanded functionality drives payment volume, which funds further development.
Looking ahead, their future seems promising, though the main vulnerability would be disruption in the payments ecosystem itself.