Your Cloud POS System Has Deep Roots


Question: What’s over 130 years old and is just getting started?

Answer: The cash register!

Long after the invention of the register, around 2008, we saw merchants taking transactions with their iPhones. Just a few years later, they were running their businesses in the cloud with the likes of tablet POS systems such as NCR Silver.

A long road, for sure. How on Earth did we get here?

Introducing the ‘Incorruptible Cashier’

Jeff Opt, NCR archivist

Cha-Ching! When it comes to cash registers, Jeff Opt is your man

Innovation was the first step. But smart sales and marketing? That’s where good innovations die. (And, sometimes, bad innovations thrive.)

The inventors of the register, for instance, failed to find a sustaining market for the thing because there was no demand. But that was about to change when John H. Patterson achieved controlling ownership of the device for about $6,500.

Patterson, founder of NCR, then called “National Cash Register Company,” succeeded at selling the “Incorruptible Cashier” by executing on a smart marketing strategy and developing a systemized sales system to turn a hard-sell into an essential piece of equipment.

“The first successful market were bars,” says Jeff Opt, NCR’s archivist in Dayton, OH, where the company was founded. “It was a regular thing for bartenders to skim from the till, and Patterson knew that. As a result, bartenders lobbied vehemently against them.”

Patterson’s salesmen were given marketing materials, their own territories, and many more revolutionary things at the time, Opt says. Patterson also marketed to each customer type — such as grocers and bar owners — differently to better address unique pain points.

“Patterson’s true genius was finding a market,” Opt says. “Back then, people didn’t see the benefit. They were like, ‘What’s wrong with keeping cash in a drawer?’ “

The Class 500. Ain't she pretty?

The Class 500. Ain’t she pretty?

When it comes to the battle for mass adoption, cost is another factor.

In 1908, the glamorous NCR Class 500 register was introduced. An ornate beast, it could keep track of up to nine separate totals, which meant it could be used by multiple clerks and departments.

Even by today’s standards, the Class 500 was expensive. One could be found between $315 to $555, Opt says. You could tack on another $20 for each drawer! And it was so heavy, even a strongman needed help moving it.

“It was equivalent to buying a Model T at the time,” Opt says. “A cash register was a significant investment.”

A 16 GB iPad Air, meanwhile, costs about $400 and clocks in at 1 pound. Strongmen — or rich men — need not apply.

The rise of the credit card

Back in the late 1800s, consumers and merchants exchanged goods using credit — only with credit coins and “charge plates.” Charge plates were about the size of a dog tag and embossed with a customer’s name and address. They were issued mostly by department stores, but also by a few oil companies.

In 1946, this old school method began to change.

That’s when the first credit card was issued. Introduced by banker John Biggins, the “Charg-It,” as it was called, was a huge innovation. But it did have serious limitations: Purchases could only be made near Biggins’ Brooklyn bank.

In the early 1950s, the credit card took off with a new product. Called The Diners Club Card, the bill had to be paid at the end of each month. Tens of thousands of people, however, were using the cards within two years of introduction.

In the late 1950s, the revolving balance and plastic cards were introduced. Another breakthrough innovation during that time was NCR’s Post-Tronic…

The budding payment ecosystem

The Post-Tronic was a bank machine, the first one to take advantage of magnetic stripe technology.

The Post-Tronic

One serious banking machine.

“This machine meant a technological breakthrough for all banking institutions,” writes retired NCR employee J.F. Van Hanswijk Pennink on The History of Computing Project website. “It eliminated double bookings that generated many mistakes, because mutations were put separately on the accountslip and the customer card.”

In 1974, NCR commercialized the first barcode scanner. To this day, it consists of a light source, a lens and a light sensor that translates optical impulses into electrical ones.The commercialization of the device solved a long-time need for grocers in particular.

The first product scanned

A juicy bit of trivia.

The first scanner was installed at Marsh’s supermarket in Troy, Ohio. On June 26, 1974, the first product barcode was scanned.

The product? A 10-pack of Wrigley’s Juicy Fruit chewing gum, which now resides at the Smithsonian!

It obviously didn’t stop at the scanner, or chewing gum.

– In 1970, the credit card’s magnetic stripe had its first big test with a joint pilot project by American Express and IBM at Chicago’s O’Hare Airport. It took 10 years, however, to really catch on, according to

– IBM produced a successful computerized cash register three years later in 1973. Back then, “dumb” terminals were wired back to an IBM mainframe “controller.” The mainframe did all the processing. The terminals simply “painted” the screen.

You could argue this was when cash registers became POS systems.

– NCR also marketed an electronic register in the early 70s, with the Class 280 Retail System.

You couldn’t argue that “mom and pops” could easily afford them due to the addition of a mainframe.

– In 1981, Verifone had a huge innovation with the credit card terminal. These devices greatly reduced the time it took to process cards.

– Things got even easier — and prettier — with Atari in 1986. That’s when the first POS with a colorized graphic touchscreen was introduced, under the ViewTouch trademark, on the 16-bit Atari ST. Yes, Atari did a lot more than Space Invaders and Q-bert.

– In the late 1980s, Microsoft changed the game for consumers and businesses alike with its Windows operating system. In 1992, the first Windows-based POS system was introduced. Called IT Retail, the system offered local processing power, local data storage, networking, and a much more advanced interface.

Looks like a game of Jeopardy! (Source:

Looks like a game of Jeopardy! (Source:

By then, system costs had declined immensely and were affordable for the average small business merchant. But a whole new realm of affordability — as well as functionality and mobility — was introduced when the omnipresent iPhone was turned into a POS in 2009…

Mobility and the cloud

Hat’s off to the early innovators. No longer forced to accept just cash, or bust knuckles on manual “Zip-Zap” card imprinters, merchants such as service providers and farmers markets were freed by the mobile credit card swiper for smartphones.

Today, we see mobile transactions everywhere — from cafes and retail shops to food truck parks. We now count roughly 130 players in this mobile POS space.

Since the proliferation of the smartphone and tablet swiper, we’ve seen the likes of loyalty systems such as LevelUp … and the slow, percolating rise of the mobile wallet.

Not even tied to a dongle, NFC and QR-based mobile wallets promise to take payments to the next level.

In Sept. 2014, Apple may have seriously upped the ante with Apple Pay. Available on iPhone 6, adoption has been somewhat swift. As of February, Chase bank alone reported having more than 1 million customers adding cards to the service, according to MacWorld.

Today, some cloud POS systems are accepting digital payments such as bitcoin. Not even tied down by a swiper  — or a bank for that matter — bitcoin is digital currency that can be purchased over the Internet. It’s transferred from person to person over the Internet with no middleman.

And that magnetic stripe we’ve been swiping for three decades? It’s in the process of being replaced with a more secure chip and PIN, commonly called “EMV.”

With such sophistication, the tablet POS system isn’t just for farmer’s markets and food trucks anymore. National franchises such as Great American Cookies, for instance, have taken full advantage of a tablet system, which the cloud makes possible.

It took 30 years for the credit card to get a swiper. It took 3 years to flood the market with powerful mobile POS technology.

“For me, the biggest innovation was back in the beginning when Patterson defined the market,” Opt says. “After that, there have been so many steps. We’re getting closer to a cashless society. But NCR was talking about that idea back in 1963. Each step has played an important role — from the magnetic stripe to the computer itself.”

With innovation and adoption occurring faster each year, where are we going next?

Click on the POS timeline image to enlarge.

Click on the POS timeline image to enlarge.

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