What is a POS system? The complete guide

A POS system (a computerized cash register) is software that records every sale, issues a receipt to the customer and keeps the data for reports, stock and your accountant. It runs on a computer, tablet or phone, and connects to equipment like a receipt printer, barcode scanner and cash drawer. A cloud POS keeps the data on a server, so the owner can see it from anywhere.

In short

• What it does: sales, receipts, closing the register, stock and reports.
• What it's made of: software, a device, peripherals and usually internet.
• What the law requires: a record of every payment, and software listed in the Tax Authority's software registry (מרשם התוכנות).
• What costs money: software, hardware and card processing. Three separate costs.

What's the difference between a cash register and a POS system?

A classic cash register is a closed machine: keypad, drawer and printer. It records amounts and prints a daily summary. A POS system is software. It knows every product by name and barcode, updates stock, manages customers and produces reports. In everyday speech the two terms are used almost interchangeably, and cloud software is also called a "cash register". → What is a cash register · What is a smart POS

How a POS system works

Every sale goes through five steps:

1. Add products: scan a barcode, tap the screen or weigh the item.
2. The register calculates: price, promotions, discounts and VAT (18% since 1.1.2025).
3. The customer pays: cash, card, phone, voucher or cheque.
4. A receipt is issued: printed or sent to the customer.
5. The data is saved: stock goes down, reports update, and at the end of the day you close the register with a Z report (דוח Z).

The three parts: software, hardware and internet

1. Software

This is where you set up products, prices, staff and permissions, and where receipts and reports come from.

• Installed software: runs on one computer in the shop and stores the data there. Without a backup, a computer that dies takes the data with it.
• Cloud software: runs in a browser or an app. The data is on a server, and you can see reports from home too.

2. Hardware

Equipment	Needed?	What to know
Computer, tablet or phone	Yes	A cloud POS usually runs on a device you already have.
Receipt printer	Almost always	Thermal printer, no ink. Paper width 80 or 58 mm.
Card terminal	If you take cards	Separate from the register or connected to it. → Pinpad: what it is
Barcode scanner	In a shop with many products	Most scanners work like a keyboard, no installation.
Cash drawer	If you take cash	Usually connects to the printer and opens when a sale ends.
Scale	Produce, deli, butcher	A scale that connects to the register, or one that prints a barcode label.

Equipment that works with KupaLi: Supported hardware.

3. Internet

A local POS keeps the data in the shop and works without internet. A cloud POS keeps it on a server, and works without internet only if it has an offline mode. → Online or offline POS: what happens when the internet goes down

Card processing and pinpads

Card processing is how money from a customer's card reaches the business's bank account. You need an agreement with a card processing company and a terminal. In Q2 2026 small businesses paid an average fee of about 1.07% (KupaLi's calculation from Bank of Israel table J040). A pinpad is a payment device connected to the register. The customer taps a card or phone on it, or inserts a card and enters a PIN, and the register sends it the amount, so nothing is keyed in twice. → Card processing for business: what it costs · Pinpad: what it is and how to connect it

What Israeli law requires

1. A document for every sale. Every payment is recorded, and the customer gets a receipt. This is set by the Income Tax (Bookkeeping) Instructions.
2. Registered software. Bookkeeping software given to other businesses must be listed in the Tax Authority's software registry, even when it's free. Check the Tax Authority's public database, which also shows how long the approval is valid.
3. Uniform-format file (קובץ במבנה אחיד). Registered software produces two files, INI.TXT and BKMVDATA.TXT, for your accountant and for audits.
4. Keep records at least 7 years from the end of the tax year.
5. An allocation number (מספר הקצאה) is needed only on a tax invoice to a licensed dealer (עוסק מורשה) who asks for it, above ₪5,000 before VAT (from 1.6.2026). A receipt to a private customer needs no allocation number.
6. Cash: a transaction of up to ₪6,000 can be paid in cash. Above that, cash only up to 10% of the amount or ₪6,000, whichever is lower (since 1.8.2022).
7. The displayed price wins. If the register charges more than the displayed price, the customer pays the displayed price.

Being listed in the registry is a technical step. It doesn't certify that the software meets every rule, and the responsibility stays with the business owner. Check with your accountant what applies to your business. → Computerized cash register: what the law really requires

How much does a POS system cost?

1. Software: a monthly subscription, per branch or per station. Check what's included and what costs extra.
2. Hardware: if you have a computer or tablet, a receipt printer is sometimes enough.
3. Card processing: a fee on every card transaction, per your agreement with the processing company. Sometimes there's a terminal fee too.

Questions before you sign:

1. Is there a setup fee?
2. Is there a commitment?
3. What does another station or branch cost?
4. How do you get support?
5. Can you export your data if you leave?

Is there a free POS system?

Yes. "Free" refers to the software. Hardware and processing cost extra, and every legal requirement applies to a free POS too. → Is there a free POS? What's really free and what costs money

How to choose a POS by business type

Business type	What to check
Café	Order add-ons, kitchen screen, speed when there's a queue
Grocery store	Barcodes, many products, stock and purchasing
Clothing store	Sizes and colors, exchanges and credit notes
Bakery	Selling by weight and by unit, daily production
Hair salon	Appointment book, services and staff commissions
Market stall / Food truck	Selling from a phone, working without stable internet

All 26 business types: POS by business type.

Example: KupaLi's POS system

1. Runs in the browser, on the computer, tablet or phone you already have.
2. Register plan (קופה רושמת) at ₪79 or Smart POS plan (קופה ממוחשבת חכמה) at ₪119, per branch per month + VAT. No setup fee and no commitment.
3. Internet down? Keep selling with cash and cheques, and everything syncs when the connection returns.
4. Cards two ways: on the terminal you already have, or on a pinpad connected to the register (₪1,500 + VAT). With the pinpad, the register sends it the amount and the customer pays.
5. Listed in the Tax Authority's software registry, with a uniform-format file on every plan.
6. Support: a smart in-app assistant around the clock, and email support.

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How it started

Year	What happened
1879	Brothers James and John Ritty of Dayton, Ohio, get a patent for a mechanical cash register.
1884	John Patterson buys the company and names it National Cash Register, now NCR.
1906	Charles Kettering builds the first electric cash register at NCR.
1974	A UPC barcode is scanned at a checkout for the first time, at a supermarket in Ohio.
2010–2011	POS on the iPad: the software moves to tablets, and the data to the cloud.

More questions

What must a receipt show?

Business name, business number, items, date, time and transaction number.

Does the POS have to be registered with the Tax Authority?

Bookkeeping software given to businesses must be listed in the software registry, even when it's free. Check the Tax Authority's database.

Does the POS issue tax invoices?

It depends on the software. Some registers issue only receipts, and then you issue tax invoices in invoicing software.

Can I connect a card terminal to the POS?

Yes, if the software supports an integrated terminal. Otherwise, take the card on a separate terminal and mark the payment as card in the register.

What happens to my data when I switch POS?

Registered software produces a uniform-format file with all the data. In KupaLi you can download it on every plan.

Is there a POS in Russian or Arabic?

Yes. In KupaLi each employee picks the screen language, including Russian and Arabic. The customer receipt is always in Hebrew.

How much does a POS system cost?

Software, hardware and processing, each separately. In KupaLi the software costs ₪79 or ₪119 per branch per month + VAT.