Is a Free POS System Really Free? How $0/Month POS Works
A $0 software bill doesn't mean the POS costs nothing — it means the cost sits somewhere else, usually in card processing. Here is how the model works, what to check, and how PalomaPOS does it.
“Free POS” is one of the most common offers a restaurant or bar owner hears. Sometimes it is a genuinely good deal. Sometimes what you don't pay on the software bill comes back through the processing rate, an equipment lease or an exit fee. The difference is rarely on the first page of the offer. This guide explains how a processing-funded POS works, what is and isn't free, and the questions that separate a good offer from an expensive one.
PalomaPOS Team
Restaurant POS & Payments specialists
Written and reviewed by the PalomaPOS team — restaurant POS and payments specialists based in Hollywood, Florida. We update this content as pricing, regulations, and product capabilities change.
1. How a $0/month POS gets paid for
Every POS company has costs: building the software, the support team, hardware and onboarding. With a subscription POS, you pay for those through a monthly software fee. With a processing-funded POS, the company is also your card processor — or works with one — and earns its revenue from the processing fees on your card sales instead of a software subscription.
So you still pay for the POS. You pay through card processing. That isn't a trick; it is a different pricing model. But it means the processing terms, not the $0 price tag, decide whether the deal is good for you.
The $0 software price is normally tied to processing with that company. Ask what the software costs if you process somewhere else — and whether that option exists at all.
2. What is $0 — and what usually isn't
- Software subscription — the part that is $0 in a free-POS offer.
- Card processing — you pay it on every card sale: the card networks' costs plus the processor's markup and per-transaction fees. This is where the POS gets paid for.
- Monthly and annual fees — statement fees, PCI fees, gateway or batch fees, monthly minimums. Some offers have them and some don't; the fee schedule tells you which.
- Hardware — bought outright, leased, or placed free while you process. A lease is often a separate contract that keeps running even if you stop using the POS.
- Add-ons — features sold as separate modules, or fees per extra device.
- Getting started — menu build, data migration, installation and training can be included or billed.
Add up everything you would pay in a month and divide it by your monthly card volume. That is your all-in effective rate — the number that actually compares two offers. Check your current effective rate →
3. The real test: what happens if you leave
A free POS is easy to start. The terms that matter show up on the way out. Before you sign, ask:
- Is there a contract term, and is there an early termination fee?
- If the hardware is leased, how many payments are left, and can the lease be ended early?
- If the hardware was placed free, what do you return, and when?
- Can you take your menu, customer list and sales history with you?
4. How PalomaPOS's version works
- Software: $0/month POS software when you process card payments with PalomaPOS.
- Processing: quoted from your current statement. A person reviews it for free and replies with a written breakdown and a PalomaPOS quote.
- Hardware: sold at cost, or placed free for qualifying processing volume. PalomaPOS runs on Valor and Sunmi POS terminals with built-in printers, on Android tablets and phones, and on iPhone and iPad.
- Getting started: menu build and data migration are free. Setup and training happen by video call, and the hardware ships to you.
- Your money: same-day funding, with an instant funding option, and embedded banking. A cash discount program is available — signage is provided and the POS does the math, and we review the card-network and state rules with you before you turn it on.
- Support: people, in English and Spanish, Monday to Friday, 9 AM to 6 PM Eastern Time.
- Leaving: month-to-month, with no cancellation fee. If you leave, you send the terminal back.
5. Questions to ask any “free POS” vendor
- Is the $0 software price tied to your processing? What does the software cost if I process elsewhere?
- What will processing cost me — in writing, every fee, for my current card volume?
- Which pricing model is it: flat rate, tiered or interchange-plus?
- Which monthly or annual fees are there on top of the per-transaction rate?
- Is the hardware bought, leased or placed? Who owns it, and what happens to it if I leave?
- Is there a contract term or an early termination fee? Does anything renew automatically?
- Which features cost extra? Is there a fee per device?
- Are menu build, data migration, setup and training included?
- How fast do card sales reach my bank account, and does faster funding cost extra?
- Who answers support — a person? In which languages, and at what hours?
- How do I export my menu, customer list and sales history if I leave?
Ask for every answer in writing — including from us. A good offer holds up to that request.
6. So is a free POS worth it?
It can be — when the processing quote is fair for your card volume and the exit is clean. The way to know is to compare the all-in effective rate of the offer with what you pay today, using your own statement rather than an advertised rate.
If you'd like a second pair of eyes on it, send us your current statement. Get a free statement review →
Want this for your business?
Book a free 15-minute demo. We'll walk through your menu and your current processing statement — no pressure, no commitment.
FAQ
Is a free POS system really free?
The software subscription is free; the POS is paid for through card processing. You still pay processing fees on card sales and, depending on the offer, you may also pay for hardware, monthly fees or add-ons. Compare offers by the all-in effective rate: total fees divided by card volume.
Why would a company give away POS software?
Because it earns from the card processing on your sales instead of from a software subscription. That is why the processing terms — and what happens if you leave — matter more than the $0 price.
What does PalomaPOS charge?
POS software is $0/month when you process card payments with PalomaPOS. Processing is quoted from your current statement after a person reviews it for free. Hardware is at cost, or placed free for qualifying processing volume.
What happens if I leave PalomaPOS?
PalomaPOS is month-to-month with no cancellation fee. If you leave, you send the terminal back.
Do I have to buy hardware for a free POS?
It depends on the vendor: hardware can be bought, leased or placed free. With PalomaPOS, hardware is sold at cost, or placed free for qualifying processing volume.
Is a free POS a good choice for a small restaurant or bar?
It can be, if the processing quote is fair for your card volume and there is no long contract or equipment lease behind it. Compare each offer's all-in effective rate with what you pay today.