Handling everything from customer checkout to employee punch-ins to inventory management and reporting, POS systems have streamlined operations for businesses of all sizes. So what would happen if your POS company goes out of business? Are you prepared for a quick migration? It’s a question many business owners don’t even think about, until it’s too late. In this article, I’ll explain what happens if your POS system vendor goes out of business and offer tips to help you prepare for the worst. This article is part of our Contingency Planning series: helping you create proactive backup plans for common or impactful problems with credit card processing that your small business could experience.
Going Out of Business and Other Situations
While I said this article is about your POS vendor “going out of business,” that’s actually not the only situation where you may need to switch quickly. While going out of business through bankruptcy or other unexpected shutdowns is one problem, there are others, including your POS vendor being acquired or the company stops offering support for your system. Any of those situations could mean that you’ll need a new option on short notice.How often do POS companies go out of business?
Firstly, you’re probably wondering how much a problem this really is. Are POS companies going out of business left and right? Fortunately, no. The main reason that you should consider a backup plan is that if it does happen to you, it’s a very impactful situation. CardFellow’s Contingency Planning series focuses on both common situations and less common but impactful situations. This is the latter. That said, there have been several recent examples of a POS company changing course, being acquired, or otherwise causing a scramble for small business owners. Even in cases where there wasn’t a tight deadline to switch, rising rates and uncertain futures made things more stressful for business owners.Revel Systems
A popular cloud-based solution, Revel systems was acquired by Shift4 in 2024. According to Restaurant Business, quoting Shift4, the company announced plans to “roll” Revel into its own SkyTab system; a lesser-known option that left many business owners with a lot of questions. Additionally, there were many reports of Shift4 charging higher costs than Revel. For businesses with thin margins, it gave another reason to consider a change.ShopKeep
In 2020, the ShopKeep POS system was acquired by Lightspeed, who phased out ShopKeep. This required business owners to either migrate to the Lightspeed platform or find an alternative. While Lightspeed offered migration support, some business owners report that the migration process was clunky and that there wasn’t a lot of notice about the switch. This was a classic example of an acquisition that led to “sunsetting” the acquired product or company, which resulted in forced migrations, and according to some users, a loss of preferred featuresLeaf POS
Leaf was a Boston-based startup that offered a cloud-based POS system specifically for small businesses. It was acquired by Heartland Payment Systems, who ultimately shut down the POS system in 2015. According to Digital Transactions, Heartland continued to support the system for a time, but ultimately it was phased out entirely.What Happens When your POS Company Closes
When your POS system company goes under or stops supporting your system, the effects can ripple across your entire business. Here are some of the key challenges:Loss of Technical Support
There’s often no customer service to call if you have an issue with your system or you need help troubleshooting. In the case of an acquisition, there may be migration support available, but some business owners complain that the agents available aren’t familiar with the old system and that help can be a challenge. There are also no further updates to keep your system current and secure. While it may continue working for a time, it will likely get less reliable and less secure.Data Loss
Particularly with cloud-based systems, you may lose access to your data. If your POS company’s servers go offline, you risk losing historical data, including sales and revenue, inventory data, customer information, employee timecards, and loyalty program information.Your Backup Plan: Preparing for POS System Disruption
You can’t prevent any of your vendors from closing their doors or selling to another company. But you can prepare for those situations.Look for Warning Signs
Knowing your POS company’s financial health can help prevent surprises. Keep an eye on news about the POS system, including funding rounds, changes in the board of directors or leadership, or other signs of trouble. You can consider setting a Google alert for the company’s name to make it easy to stay on top of news without having to spend a lot of timeBack Up Your Data
Whether your system is cloud-based or not, it’s a good idea to export and back up key data. Make sure you download information like sales reports, customer lists, inventory information, employee data, and loyalty program balances. Most POS systems offer some sort of easy export option, such as CSV files. Set a recurring reminder in your calendar and export your data according to a schedule, preferably weekly. Be sure to keep any exported data secure and accessible only to employees with a “need to know” role.Create a Shortlist of Backup POS Systems
This one is important. Don’t wait until you have an issue to begin looking for a new system. At that point you’ll be strapped for time and pressured to get something quickly so you don’t lose sales. Instead, check out a backup option or two in advance. Look for companies that can import data from your current system or a CSV file. Ideally, see if you can find a company that supports your existing POS hardware so that there’s less to change over. If that’s not possible, identify what system(s) you like and have the features you need so that you’re prepared to make an informed decision quickly. Update your list every 2-3 years so you stay current with new POS offerings and ensure you don’t have a system that has been phased out on your list.Consider a Backup Low Cost Machine or Card Reader
Most business owners’ primary worry with their POS system company closing is not being able to take payments. The other functions - inventory management, CRM, etc - are important, but can wait a few days. Taking payments is critical. For peace of mind, you can consider having a spare countertop terminal or a tablet / smartphone card reader. These basic options won’t have all the bells and whistles you’re used to with your POS system, but they will let you continue to take card payments while you resolve the POS system situation.Migrating Data
The biggest hassle of switching from your current POS system is data migration. If your POS vendor shuts down, here’s how to make that a little less painful. Assuming you followed the tip to regularly export your data, simply go to your most recently exported files. You may have more than one if you exported multiple types of data, such as transactions, inventory, customer information, etc. Many POS companies offer onboarding, which often includes data migration services. Some have experience importing data from popular systems. Check with your new POS company for help importing your data. Once you’ve imported your data, you’ll need to audit it for accuracy. Don’t assume everything transferred perfectly. Confirm that prices and SKUs are correct, inventory counts aren’t off, and any other critical info looks correct. If you have a lot of inventory, you can “spot check” several SKUs and prices vs. checking every individual item.Don’t Neglect Training
Even if you choose a system similar to your old POS, be sure to take time to train staff, especially on any differences. Provide “cheat sheets” at the register or posted in staff-only areas and give employees time to ask questions. These days, POS systems are a mission-critical tool and it’s important to have contingency plans. While POS vendor shutdowns are (thankfully) not common, they do happen. When they do, they can cause stress and frustration as you scramble to replace your system. By taking steps now to back up your data and identify possible replacements, you can turn a potential disaster into a manageable transition.
Ben Dwyer
Ben Dwyer began his career in the processing industry in 2003 on the sales floor for a Connecticut‐based processor. As he learned more about the inner‐workings of the industry, rampant unethical practices, and lack of assistance available to businesses, he cut ties with his employer and started a blog where he could post accurate information about credit card processing. As the blog gained in popularity, Ben began directly assisting merchants in their search for a processor. Ben believes in empowering businesses by providing access to fair, competitive pricing, accurate information, and continued support. His dedication to transparency and education has made CardFellow a staunch small business advocate in the credit card processing industry.
