If you're shopping for a POS system for your restaurant, cafe, bar, or hospitality venue, you've probably noticed two very different pricing models.
Some systems offer free or cheap hardware with integrated payment processing. Others charge more upfront but let you choose your own payment processor.
These aren't just different pricing structures. They're fundamentally different business models, and understanding the difference could save your venue tens of thousands of dollars over the life of your POS system.
This article breaks down how embedded POS and independent POS systems work, where the real costs sit, and which model puts more money back in your pocket over time.
The short version: For a typical two-terminal Australian restaurant, an embedded POS system costs $20,000 to $30,000 more over five years than an independent POS, primarily through inflated payment processing fees you can't negotiate or avoid. The "free" hardware and cheap software are paid for many times over through payment processor lock-in.
An embedded POS system is a point of sale system that bundles the software and payment processing into a single package, requiring venues to use the provider's own payment processing service. You can't separate the two.
The most recognisable examples of this model are systems that offer free or heavily subsidised hardware, low monthly software fees, and a flat transaction rate on every card payment. The appeal is obvious: low entry cost, one provider, one bill, quick setup.
But the business model behind it is worth understanding. These providers aren't making their money from software subscriptions or hardware sales. They're making their money from payment processing. Every time a customer taps their card at your venue, the POS provider takes a percentage, and that percentage includes a margin above the actual cost of processing the transaction.
You can't see that margin on your statement. You can't negotiate it down. And if you want to switch to a cheaper processor, you can't, because your POS only works with their processing service. Changing processors means replacing your entire POS system.
This is what the industry calls POS payment processing lock-in, and it's the most common source of hidden fees in POS systems across Australian hospitality.
An independent POS system is a point of sale system that separates the software from the payment processing, allowing venues to choose, negotiate with, and switch between multiple payment processors without changing their POS. The two systems work together through integrations, but they're independent businesses.
Your POS provider charges you for the software. Your payment processor charges you for processing. Neither one locks you into the other.
With an independent POS, you can compare rates from multiple processors, negotiate directly based on your volume, and switch processors if a better deal comes along, all without touching your POS system. Your menu, your reports, your staff workflows, your floor plans, everything stays exactly the same. Only the payment integration changes.
PowerEPOS is an independent POS system. Triniteq charges a flat monthly subscription for the software and zero transaction fees. You choose from over 15 integrated payment processors, including Tyro, Zeller, Zero Payments, Linkly, and all major Australian banks, and you negotiate your rates directly with them.
The upfront cost of a POS system is the number most people focus on when doing a POS system cost comparison. But for hospitality venues processing hundreds of thousands of dollars in card payments annually, the upfront cost is the smallest part of the total picture.
Here's where the money actually goes over five years.
Embedded POS systems often subsidise or give away hardware. That's attractive on day one. But you're not getting free hardware, you're financing it through higher processing fees for as long as you use the system.
Independent POS hardware typically costs $4,000 to $8,000 for a standard two-terminal restaurant setup. You own it outright. There's no ongoing cost tied to it, and it doesn't lock you into any particular payment arrangement.
Embedded POS software fees range from $0 to $120 per month for a two-terminal setup. Some systems genuinely offer free software because, again, they're making their money on processing.
Independent POS software fees are transparent and predictable. With PowerEPOS, the first terminal licence is $55 per month (inc. GST) and each additional terminal is $35 per month. For a two-terminal venue, that's $90 per month. The fee is the same whether you process $10,000 or $500,000 in card payments. Your costs don't increase as your business grows.
This is where the POS system cost comparison becomes significant.
Embedded POS systems typically charge between 1.6% and 2.6% per transaction. That rate is fixed by the POS provider and includes their margin above the actual interchange cost. You can't negotiate it, and you can't compare it against other processors because you have no alternative.
With an independent POS, you negotiate your processing rate directly with your chosen processor. Depending on your volume and card mix, rates for Australian hospitality venues typically fall between 1.0% and 2.0%. Higher volume venues can negotiate toward the lower end of that range.
The difference between paying 2.6% and 1.5% might sound small. On $50,000 in monthly card revenue, it's $550 per month, $6,600 per year, $33,000 over five years.
That's where the real cost of an embedded POS sits. Not in the hardware. Not in the software. In the processing fees you pay every single day, hidden inside a rate you never negotiated.
Let's put real numbers to this. Here's a side-by-side comparison for a restaurant with two POS terminals processing $50,000 per month in card payments.
| Embedded POS | Independent POS (PowerEPOS) | |
|---|---|---|
| Hardware cost | $0–$3,000 (subsidised) | $4,000–$8,000 (owned outright) |
| Monthly software | $0–$120 | $90 (flat, inc. GST) |
| Processing rate | 1.6%–2.6% (fixed, non-negotiable) | 1.0%–2.0% (negotiated direct) |
| POS transaction fees | Included in processing markup | Zero from Triniteq |
| Processor choice | One (POS provider's) | 15+ integrated options |
| Switch processors | Requires replacing entire POS | 1–2 hours, no POS changes |
| Fee increases with growth | Yes (transaction-based) | No (flat monthly fee) |
| 5-year total (2 terminals, $50k/month) | $78,000–$88,200 | $54,400–$58,400 |
| 5-year difference | $20,000–$30,000 cheaper |
The "free" hardware and cheap software fees are paid for many times over through inflated processing costs. And this comparison assumes the venue's card revenue stays at $50,000 per month. If the business grows, the gap widens. At $80,000 per month in card revenue, the five-year difference climbs to over $40,000.
The direct cost difference is significant enough on its own. But POS payment processing lock-in carries additional costs that don't show up in a simple calculation.
Australia's payment processing market is competitive. New processors enter regularly, existing ones adjust rates to win business, and technology improvements drive costs down over time. When you're locked into an embedded POS, none of that competition benefits you. Your rate is your rate, regardless of what the market offers.
As your transaction volume increases, your value to payment processors increases. A venue processing $30,000 per month has different negotiating leverage than the same venue processing $100,000 per month two years later. With an independent POS, you can renegotiate or switch based on your current volume. With an embedded POS, growth just means you're paying more in fees at the same percentage.
The longer you stay with an embedded POS, the harder it becomes to leave. Your staff know the system. Your reports are built around it. Your workflows are established. Replacing the entire POS to switch processors feels like a massive disruption, so you stay, even when you know you're overpaying. This is exactly the dynamic embedded POS providers rely on.
If you operate multiple venues, processor lock-in costs multiply across every location. A restaurant group with five sites, each processing $50,000 per month, paying 1.1% more than they need to, is losing $33,000 per year across the group. Over five years, that's $165,000 in avoidable processing fees.
One of the biggest concerns venue operators have about moving from an embedded POS to an independent POS is the disruption. It sounds like a major project: new hardware, new software, retraining staff, migrating data.
The reality is more straightforward than most people expect.
A typical PowerEPOS installation for a standard restaurant takes two to four weeks from order to go-live, including hardware delivery, remote configuration, and staff training. Staff training usually takes two to three hours, and most teams are comfortable within the first service.
If you're already on an independent POS and just want to switch processors, the change takes one to two hours. No new hardware. No retraining. No data migration. You update the payment integration settings, test the terminal, and you're live.
To be fair, there are scenarios where an embedded POS can be the right choice.
Embedded POS is better when:
Independent POS is better when:
For any established hospitality venue in the second category, the maths consistently favours an independent POS. The upfront hardware cost is recovered through processing savings, typically within the first 12 to 18 months, and every month after that is pure savings.
Whether you're buying your first POS or considering a switch, these questions will help you understand the true cost of any system you evaluate.
"Can I choose my own payment processor?" If the answer is no, or if there's only one option, you're looking at an embedded system with processor lock-in.
"What processing rate will I pay, and can I negotiate it?" If the rate is fixed by the POS provider with no room for negotiation, the margin is built into their business model.
"What happens if I want to switch processors in two years?" If switching processors requires replacing the POS, that's a lock-in cost you need to factor into your decision.
"Does the POS provider charge transaction fees?" Some POS providers charge their own per-transaction fee on top of your processor's fee. This adds another layer of hidden fees to your POS costs that increase with your revenue.
"Is my monthly POS fee fixed, or does it increase with my transaction volume?" Flat monthly fees give you cost certainty. Transaction-based fees mean your POS costs grow as your business grows.
The decision between embedded and independent POS comes down to a simple question: do you want lower costs today, or lower costs over the life of your business?
Embedded POS systems win on day one. The hardware is cheap or free, the setup is quick, and the monthly software fee is low. But every card payment your customers make includes a margin you never agreed to, can't negotiate, and can't escape without replacing your entire system.
Independent POS systems like PowerEPOS might cost more upfront. But you own your hardware, your software fee is a flat rate and predictable, and your payment processing rate is something you negotiate directly with the processor of your choice. If a better rate becomes available next year, you switch in a couple of hours without touching your POS.
For Australian hospitality venues processing $20,000 or more per month in card payments, the independent model consistently delivers a lower total cost of ownership, greater flexibility, and more control over one of your largest operating expenses.
Want to see the numbers for your venue? Call us on 1300 784 666 or contact us and we'll run a cost comparison based on your actual transaction volume. No obligation, just useful numbers.
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