Hardware or Cloud TSE: Which Solution Fits Your POS System?
Since the introduction of the Cash Register Security Ordinance, all electronic cash registers must be equipped with a Technical Security Device (TSE/TSS). When implementing this, retailers, restaurants, bakeries, and others often face the same question: Hardware TSE or Cloud TSE? As is often the case, both methods have advantages. Ultimately, the solution must fit the specific requirements of the business. Here is a comparison.
TSE in Brief
Security, logging, and thus the protection of POS systems against manipulation are at the heart of the Technical Security Device. A TSE ensures that:
- all cash register transactions are recorded securely,
- no data can be altered or deleted afterward,
- every transaction receives a unique signature,
- all processes are auditable for tax authorities (Cash Register Inspection § 146a AO).
In Germany, TSEs must also be certified, either as hardware or as a cloud service provided by a certified provider.
Hardware TSE: Advantages and Limitations
With a hardware TSE, the cash register is secured via a physical device. This can be a USB stick, an SD card, or an additional module connected directly to the register.
The hardware handles the signing of all transactions locally and independently of an internet connection – which is one of its biggest benefits.
Advantages:
- Ideal for poor or missing internet connections: Signing happens directly on the device; weak Wi-Fi won’t cause outages.
- Easy integration: Many POS systems support hardware TSEs via plug & play.
- Full on-site control: Businesses keep the TSE physically on-site.
Limitations:
- Risk of technical failures: Like any hardware component, failures, damage, or wear are possible.
- Additional costs: Hardware failures may incur extra expenses, which are difficult to plan for.
- Certificate expiry requires replacement: Certificates expire after a maximum of five years, requiring a new device.
- Maintenance effort: Replacement, updates, and physical security are the responsibility of the business. Neglecting maintenance can create security gaps or compliance issues.
- Limited storage: Depending on the system, large amounts of data may increase requirements.
Cloud TSE: Advantages and Limitations
With a cloud TSE – for example from fiskaly – transaction signing does not occur locally on the POS system but via a certified cloud service. Communication between the cash register and TSE is encrypted and in real time.
Advantages:
- No hardware, no outages: No device needs to be connected, monitored, or replaced. Once an internet connection is available, the system runs.
- Certificate renewal without effort: Certificates are renewed centrally – fully transparent for businesses without using their own resources.
- Centralized data provision: Reports for tax authorities are available centrally and quickly, enabling fast access during an audit.
- Predictable costs: Monthly fees are easy to budget. Unforeseen hardware failures with additional costs are avoided.
- Higher data security: Redundant storage minimizes the risk of data loss.
- Quick scalability: Ideal for branch businesses or companies with multiple registers.
Limitations:
- Internet-dependent: A cloud TSE requires a constant online connection.
- Data protection & compliance: External storage requires trust, reputable providers, and GDPR compliance.
Which TSE Fits Which Business?
The choice between hardware and cloud TSE depends on three key factors. First and foremost is internet availability. If the connection is unstable, a cloud TSE is not recommended. With stable, permanent connectivity, cloud solutions are possible, but hardware TSEs may also make sense for other reasons. For example, frequent mobile use in food trucks, market stalls, or direct agricultural sales favors hardware components.
The number of cash registers also impacts the decision. For a single register or just a few devices, hardware TSE is usually sufficient. As the number of registers increases, and with multiple branches, centralized management via cloud TSE significantly reduces administrative effort.
Finally, business process requirements should be considered. For high demands regarding automation, reporting, and compliance, a cloud TSE offers clear advantages. Hardware TSE can often be the more pragmatic choice for simple processes and limited digital infrastructure.
There is no one-size-fits-all solution. Ultimately, the choice should reflect the technical conditions, operational workflows, and future plans of the organization. Our intelligent POS solution, ITR POS, supports both physical TSEs (USB or SD, e.g., from Swissbit) and cloud TSEs from fiskaly.
Tailored Security
With the right TSE solution, businesses can not only meet legal requirements but also make operations more efficient and modern. The key is that the solution fits the operational reality. Knowing your needs is a big step toward compliance, cost savings, and efficiency.