Loyalty Software vs POS Loyalty: Integrated or Standalone for Small Business?
Dec 3, 2025
You're using Square for payments (or SumUp, or Zettle, or another POS system). You've noticed they offer built-in loyalty features. It's right there in your dashboard, already integrated, ready to turn on.
You're thinking: Should I just use the loyalty feature that's already built into my POS? Or do I need a separate, standalone loyalty platform?
The integrated option sounds convenient. One system. One login. Loyalty and payments together. Why complicate things with a second platform?
But you're also wondering: What am I giving up if I choose convenience? Is there a reason so many businesses use standalone loyalty platforms instead of POS-integrated ones?
Here's the truth: POS-integrated loyalty and standalone loyalty platforms solve the same problem but make very different trade-offs. One prioritizes convenience within a single ecosystem. The other prioritizes flexibility, features, and independence.
Neither is universally "better." The right choice depends on your commitment to your current POS, how much control you want over loyalty, and your long-term business plans.
This guide explains what POS-integrated loyalty actually is (and what it isn't), what standalone loyalty platforms deliver, the critical trade-offs around flexibility and data ownership, and how to choose based on your business reality.
By the end, you'll know exactly which approach protects your business's future.
What POS-Integrated Loyalty Actually Is
Let's start by understanding what you're getting with POS loyalty.
POS Loyalty: The All-in-One Approach
What it means:
Your payment processor (Square, SumUp, Zettle, Clover, etc.) offers loyalty as an add-on feature within their existing system.
How it works:
You activate loyalty in your POS dashboard
Customers provide phone number or email at checkout
POS automatically tracks purchases and applies points/rewards
Everything lives in one system: payments + sales + loyalty
You manage loyalty through your POS dashboard For businesses with just two or three staff, that single-dashboard simplicity is genuinely appealing — though loyalty software built for small teams can be equally easy to train on, often requiring under five minutes per employee.
What you get:
Integration with your payment processing (automatic point tracking)
Unified dashboard (sales + loyalty data in one place)
Simplified checkout (staff just process payment, loyalty happens automatically)
No additional login or separate platform
Common examples:
Square Loyalty: Built into Square ecosystem, charges per customer
SumUp Loyalty: Integrated with SumUp payments
Zettle Loyalty: Part of Zettle POS system
Clover Rewards: Native to Clover terminals
What POS Loyalty Typically Includes
Standard features:
Points-based rewards (spend = points, redeem for discounts)
Customer database (stored within POS)
Basic email/SMS marketing (often cos If points-based rewards are your priority, it's worth comparing what POS systems offer against the best loyalty points software purpose-built for small businesses — the feature gap is often wider than you'd expect.ts extra for SMS)
Redemption tracking (applied at checkout automatically)
Simple analytics (within POS dashboard)
What POS Loyalty Usually Doesn't Include
Common limitations:
Not wallet-based: Customers don't get Apple Wallet or Google Wallet cards
No visual loyalty cards: Customers track by phone number lookup, no card to show
Limited reward types: Usually just points; no stamps, membership cards, multipass, etc.
No platform independence: Only works if you use that specific POS
Limited push notifications: Often restricted or expensive
Basic customization: Limited branding and design flexibility
The core characteristic: POS loyalty is designed as a feature of your payment system, not a standalone product.
What Standalone Loyalty Platforms Are
Now the alternative approach.
Standalone Loyalty: The Specialized Platform
What it means:
You use a dedicated loyalty platform (like Perkstar) that operates independently of your payment processor.
How it works:
Customer scans QR code to add digital loyalty card to Apple Wallet or Google Wallet
At checkout, customer shows wallet card
Staff scans card using standalone loyalty platform's scanner app
Points/stamps are added to customer's digital card
Loyalty operates separately from payment processing
What you get:
Wallet-based digital cards (Apple Wallet + Google Wallet)
Multiple card types (stamps, points, membership, cashback, multipass, etc.)
Platform independence (works with any POS, or no POS at all)
Unlimited push notifications (included)
Full branding control
Advanced features (automations, analytics, campaigns)
Common examples:
Perkstar: UK-focused, 8 card types, wallet-based
Loopy Loyalty: US-based, wallet-focused
Stamp Me: International, stamp card specialist
What Standalone Loyalty Delivers
Comprehensive features:
Wallet integration: Cards live in Apple Wallet/Google Wallet (60–80% adoption)
Multiple reward structures: Choose stamps, points, membership, cashback, multipass, etc.
Visual cards: Customers see progress on lock screen daily
Unlimited messaging: Push notifications at no per-message cost
Automation: Birthday rewards, re-engagement, milestone messages
Flexibility: Works with any payment system (Square, SumUp, cash, card terminals, or combination)
Data ownership: You control customer data, not locked in POS ecosystem
The core characteristic: Standalone loyalty is a specialized product designed to do one thing exceptionally well — customer retention.
The Critical Trade-Offs: What You're Really Choosing
Let's compare what matters.
Trade-Off 1: Convenience vs Flexibility
POS-Integrated:
✓ One system (everything in one place)
✓ Automatic point tracking (tied to payments)
✓ Single dashboard
✗ Locked to specific POS (can't switch payment processors without losing loyalty)
✗ Limited to that POS's feature set If you're specifically weighing Square's ecosystem against a dedicated platform, a detailed Square Loyalty vs Perkstar comparison breaks down exactly where each approach wins and loses.
Standalone:
✓ Works with any payment system
✓ Can switch POS providers without affecting loyalty
✓ Choose best-in-class loyalty regardless of payment processor
✗ Requires staff to scan loyalty cards manually (adds 3–5 seconds per transaction)
✗ Separate login and dashboard
Which matters more?
If you're certain you'll use your current POS forever, convenience wins. If there's any chance you might switch payment processors, flexibility protects you.
Trade-Off 2: Integration vs Features
POS-Integrated:
✓ Seamless payment integration (loyalty tracks automatically)
✗ Limited reward types (usually only points)
✗ No wallet-based cards (phone number lookup only)
✗ Basic features (what POS company built)
Standalone:
✓ 8+ card types (stamps, points, membership, cashback, multipass, coupons, discounts, gift cards) That variety matters because stamps and points serve different business models — a café benefits from stamp simplicity while a retailer may need points-based flexibility, and POS loyalty rarely lets you choose.
✓ Wallet-based cards (visual, persistent, high adoption)
✓ Advanced features (built by loyalty specialists)
✗ Manual scanning (not automatic with payment)
Which matters more?
If you just need basic points and value automation above all else, integration wins. If you want wallet cards and versatile rewards, features win.
Trade-Off 3: Data Ownership vs Unified Dashboard
POS-Integrated:
✓ All data in one place (sales + loyalty combined)
✗ Loyalty data trapped in POS (if you switch providers, extracting customer data is difficult)
✗ Limited data portability
Standalone:
✓ You own loyalty data independently
✓ Can export customer list anytime
✓ Switch payment processors without losing customer relationships
✗ Loyalty data and sales data in separate dashboards
Which matters more?
If you want to analyze sales + loyalty in unified reports, integration wins. If you want to protect customer relationships from POS lock-in, independence wins.
Trade-Off 4: Pricing Predictability vs Scaling Costs
POS-Integrated:
Often charges per customer (e.g., Square: £25/month + £0.029 per loyalty member)
Cost increases as program grows
Example: 500 customers = £25 + (500 × £0.029) = £39.50/month
Standalone:
Usually flat monthly fee (e.g., Perkstar: £15–£60/month)
Cost stays flat regardless of customer count These per-customer charges are just one of several loyalty card software pricing models that can quietly inflate costs — understanding all of them before you commit saves real money.
Example: 500 customers = £30/month (Growth plan)
Cost comparison:
At 300 customers:
POS-integrated: £25 + (300 × £0.029) = £33.70/month
Standalone (Perkstar): £30/month
At 1,000 customers:
POS-integrated: £25 + (1,000 × £0.029) = £54/month
Standalone (Perkstar): £30/month
Which matters more?
Small programs (under 200 customers), costs are similar. Larger programs, standalone pricing protects against scaling penalties.
Trade-Off 5: Customer Experience
POS-Integrated:
Customer provides phone number/email at checkout
No visible loyalty card (lookup-based)
Lower visibility (customers forget they're enrolled)
Adoption: 40–60% (some customers hesitate to provide contact info)
Standalone (Wallet-Based):
Customer scans QR code, gets visual card in wallet
Card visible on lock screen (high awareness)
Customers see progress daily
Adoption: 60–80% (one-tap enrollment, no info required upfront)
Which matters more?
If seamless checkout is priority, POS integration wins. If customer engagement and visibility matter, wallet cards win.
When POS-Integrated Loyalty Makes Sense
Let's be honest about when POS loyalty is the right choice.
POS-Integrated Works Well If:
✓ You're committed to your POS long-term
If you're 100% certain you'll use Square (or your current POS) for the next 3–5 years, integration value outweighs flexibility concerns.
✓ You want maximum automation
If you value automatic point application above everything else (and don't mind limitations), POS integration delivers this.
✓ You only need basic points-based loyalty
If "spend £1 = 1 point, redeem for discounts" covers your needs and you don't need stamps, membership cards, or other structures, POS loyalty may suffice.
✓ Your program is very small (under 150 customers)
At small scale, per-customer pricing is manageable and feature limitations may not matter yet.
✓ You prioritize single dashboard over features
If having sales + loyalty data in one place is more important than wallet cards or advanced features, integration wins.
Example businesses:
Very small cafés fully committed to Square
Single-location shops with simple needs and low customer counts
Businesses valuing convenience over flexibility
When Standalone Loyalty Makes Sense
For most UK small businesses, standalone is the better long-term choice.
Standalone Loyalty Works Well If:
✓ You want wallet-based cards
If you want customers to have visual Apple Wallet/Google Wallet cards (which drive 60–80% adoption vs 40–60% for phone number lookup), standalone is the only option.
✓ You value platform independence
If there's any chance you might switch from Square to SumUp, or add additional payment methods (cash, different terminals), standalone protects you.
✓ You want multiple reward structures
If you need stamps for services + points for products, or membership cards for VIPs, standalone platforms like Perkstar offer 8 card types vs POS loyalty's 1–2 types. Choosing between membership cards and stamp cards depends on your visit frequency and average spend — and only standalone platforms give you that choice.
✓ Your program will grow (200+ customers)
Flat pricing protects against scaling penalties. At 500+ customers, standalone is significantly cheaper.
✓ You want unlimited push notifications
POS platforms often charge per SMS (7–10p) or limit notifications. Standalone includes unlimited push notifications via wallets.
✓ You want advanced features
Automations (birthday rewards, re-engagement), detailed analytics, segmentation, and customization are far more robust on standalone platforms.
✓ You're a UK business wanting UK support
Many POS systems are US-based with USD pricing and US support hours. Standalone options like Perkstar offer UK pricing (GBP), UK support, and UK market focus.
Example businesses:
Salons and barbershops wanting visit-based stamps
Cafés wanting high customer adoption through wallet cards
Growing businesses wanting cost predictability
Any business that might switch payment processors
UK businesses wanting local platform and support
Real-World Example: A Café in Edinburgh
Let's see this decision play out.
The business: Independent specialty coffee shop in Edinburgh. Currently using Square POS for payments. 220 regular customers.
Path 1: Square Loyalty (POS-Integrated)
Month 1:
Activated Square Loyalty in dashboard
Cost: £25/month + per-customer fee
Set up: "£1 spent = 1 point, 100 points = £5 off"
Customer enrollment:
Staff asked for phone numbers at checkout
87 customers enrolled (39% of regulars)
Some customers hesitated: "Why do you need my phone number?"
Enrollment friction noticeable
Month 3:
112 customers enrolled
Cost: £25 + (112 × £0.029) = £28.25/month
Points applied automatically (nice for staff)
BUT: Customers frequently asked "How many points do I have?" (no visible card)
Month 6:
134 customers enrolled
Cost: £25 + (134 × £0.029) = £28.89/month
Customers forgot they were enrolled (low visibility)
Email campaigns had 18% open rate (low engagement)
Owner considered switching to SumUp:
Square's fees increased
SumUp offered better rates
BUT: Would lose all loyalty customers if switched
Felt trapped
Owner's frustration:
"Square Loyalty works okay, but I feel locked in. And customers don't engage with it much because they don't see a card — they just forget they're enrolled. Plus, if I ever want to switch payment processors for better rates, I lose everything."
Path 2: Perkstar (Standalone, Wallet-Based)
Same café, different decision:
Month 1:
Set up Perkstar (45 minutes)
Created digital stamp card: "Buy 9 coffees, get 10th free"
Generated QR code, printed poster for counter
Trained staff to scan wallet cards (5 minutes)
Cost: £30/month flat
Customer enrollment:
Customers scanned QR code
One-tap added card to Apple Wallet or Google Wallet
156 customers enrolled (71% of regulars) — significantly higher adoption
Zero friction ("Just scan this") That frictionless enrollment — customer scans, card appears in wallet — is why QR code loyalty cards consistently outperform phone-number-based systems on adoption rates.
Month 3:
189 customers enrolled
Cost: Still £30/month (no per-customer charges)
Customers engaged regularly (see progress on lock screen)
Push notification campaigns: 14% action rate (customers visited within 48 hours)
Month 6:
208 customers enrolled
Cost: Still £30/month
Sent re-engagement campaign: 19 lapsed customers came back
Wallet cards drove awareness (customers see them daily while paying for things)
Owner considered switching payment processors:
Found better rates with SumUp
Switched to SumUp for payments
Loyalty program unaffected (completely independent)
Zero disruption to customer relationships
Month 12:
Owner using SumUp for payments, Perkstar for loyalty
Both work together perfectly
Platform independence proved valuable
Owner's reflection:
"Going with standalone loyalty was the right call. Wallet cards get way better adoption — customers love seeing their progress. And when I switched from Square to SumUp for better payment rates, my loyalty program wasn't affected at all. If I'd used Square Loyalty, I would have lost 200+ customer relationships or been stuck paying higher fees."
Modern Take: Why Platform Independence Matters in 2026
Here's why this decision matters more now than ever.
The Payment Processing Market Is Competitive
2015–2020: Limited Options
Square dominated small business payments
Few alternatives with comparable features
Switching was rare
2026: High Competition
Square, SumUp, Zettle, Stripe, Revolut, and dozens more compete aggressively
Pricing changes frequently When providers change pricing or features, businesses locked into POS loyalty often discover the real cost of their digital loyalty program is far higher than the monthly fee they originally signed up for.
Features evolve constantly
Better deals emerge regularly
Result: Businesses that locked loyalty into their POS find themselves unable to switch payment providers without losing customer relationships.
Data Portability Is Critical
Customer data is your most valuable asset.
If your loyalty data lives in your POS system:
Switching providers means losing or struggling to export customer lists
Your loyalty program is held hostage by payment processor lock-in
You don't truly own the customer relationship
If your loyalty data lives in standalone platform:
Export customer list anytime (CSV, clean data)
Switch payment processors freely
Customer relationships are independent infrastructure
In 2026, data portability is a competitive advantage.
Wallet-Based Loyalty Became Standard
POS-integrated loyalty missed the wallet revolution.
Most POS loyalty systems use:
Phone number lookup (no visible card)
Email/SMS (not push notifications)
Points-only (limited to what POS built)
Standalone platforms adopted wallets:
Apple Wallet + Google Wallet cards
Visible progress on lock screen
60–80% adoption (vs 40–60% for POS)
Push notifications (free, high engagement)
Wallet-based is now the standard. POS-integrated systems lag behind.
Specialization Delivers Better Products
POS companies build loyalty as a feature. Their core business is payment processing. Loyalty is secondary.
Standalone loyalty companies build loyalty as their product. It's all they do. That depth of investment is why dedicated loyalty program software for small businesses now includes features like automated re-engagement campaigns and birthday rewards that POS add-ons simply haven't built. They invest deeply in:
Multiple card types
Advanced features
Better customer experience
Ongoing innovation
Result: Standalone loyalty platforms deliver significantly better experiences than POS-integrated feature sets.
Making the Decision: A Simple Framework
Use this to choose.
Ask Yourself These Questions:
Question 1: Are you 100% committed to your current POS for 3+ years?
If yes: POS-integrated is viable
If no or uncertain: Standalone (protects against future switches)
Question 2: Do you want wallet-based digital cards?
If yes: Standalone (POS systems don't offer wallet cards)
If no (phone lookup is fine): Either works
Question 3: Do you need multiple reward types (stamps, points, membership)?
If yes: Standalone (8 card types vs POS's 1–2)
If no (basic points only): Either works
Question 4: How many loyalty customers do you expect?
If under 200: Costs are similar
If 200–1,000+: Standalone is cheaper (flat pricing vs per-customer)
Question 5: How important is platform independence?
If critical: Standalone (freedom to switch payment processors)
If not important: POS-integrated (convenience wins)
If you answered in favor of standalone on 3+ questions, choose standalone loyalty.
If you answered in favor of POS-integrated on 4+ questions, POS loyalty may work for you.
Final Thoughts: Convenience vs Control
POS-integrated loyalty is convenient. Standalone loyalty gives you control.
POS-integrated works when:
You're fully committed to your POS provider
Automation matters more than features
You need the simplest possible setup
Your program is small and basic
Standalone works when:
You want platform independence
Wallet-based cards and high adoption matter
You need multiple reward structures
You want cost predictability as you grow
You value customer data ownership
For most UK small businesses, standalone loyalty is the better long-term choice — especially wallet-based platforms like Perkstar that deliver enterprise-quality loyalty at SMB prices with full independence.
The few minutes you save with POS integration aren't worth losing control of your customer relationships.
Start your free 14-day trial with Perkstar — no credit card required. Test standalone wallet-based loyalty alongside your existing POS. See the adoption difference. Make an informed choice.
Your customer relationships are too valuable to lock into a payment processor.
