Toast and Square Compete on Point-of-Sale Hardware Discounts

Industry analysts note that these promotions are tied to long-term software contracts

Point-of-sale hardware providers are slashing prices to attract merchants amid rising competition and upgrade demands, with Toast and Square leading the discount push as of October 2026. The moves come as businesses seek modern systems that integrate payments, inventory, and customer loyalty tools without high upfront costs. Both companies are responding to pressure from rivals and shifting merchant expectations for affordable, scalable technology. The discount strategy reflects a broader industry shift where POS vendors prioritize market share over hardware margins, especially as cloud-based software becomes the primary revenue driver. Toast has reduced prices on its handheld terminals and kitchen display systems, targeting restaurants upgrading from legacy setups. Square, meanwhile, is offering bundled deals on its register and reader kits, aiming to win back small retailers who have explored alternatives like Shopify Payments or Lightspeed.

Industry analysts note that these promotions are tied to long-term software contracts, ensuring recurring revenue despite lower hardware costs. How Are Merchants Responding to Lower Hardware Costs Merchants are taking advantage of the discounts to replace aging equipment, with many citing improved transaction speed and better analytics as key motivators. A mid-sized café owner in Austin reported saving nearly $1,200 on a Toast terminal bundle, which included staff training and menu integration support. Similarly, a boutique clothing store in Portland switched to Square after receiving a free reader with a three-month software trial, saying the lower barrier to entry made the transition less risky.

These upgrades are often paired with staff retraining and menu or inventory system overhauls

These upgrades are often paired with staff retraining and menu or inventory system overhauls, indicating a deeper operational shift beyond just new hardware. What Risks Do Discount-Heavy Strategies Pose for POS Providers While aggressive pricing helps gain market share, it raises concerns about long-term profitability and potential quality trade-offs if cost-cutting affects hardware durability or support responsiveness. Some industry observers warn that deep discounts could trigger a race to the bottom, making it harder for smaller POS players to compete without venture backing. However, both Toast and Square emphasize that their hardware remains profitable at scale due to efficient manufacturing and software-led upsells. They argue that securing a merchant’s POS system opens doors to higher-margin services like payroll, lending, and marketing tools, which ultimately offset initial hardware losses. Frequently Asked Questions Why are Toast and Square discounting their POS hardware now?

They are responding to increased competition and merchant demand for affordable, modern systems that support integrated payments and business management features, using lower hardware costs as an entry point to long-term software contracts. Do these discounts mean lower quality or less support for merchants? No, both companies state that hardware quality and support remain unchanged, with discounts structured around bundled software agreements that ensure ongoing revenue and service continuity. How long are these promotional pricing offers expected to last? The promotions are tied to specific upgrade cycles and merchant acquisition goals, with no fixed end date, but they are likely to continue as long as market pressure for affordable POS solutions remains strong.