In the past, businesses accepting credit cards had few options but to lease a credit card machine. Those days are behind us. If you’re talking with a company rep that says you have to lease a machine to do business with them, they’re not the company for you. Here are 4 reasons why you should never lease a credit card machine for your business.
Some reps may tell you that leasing their equipment is necessary to process credit cards with them. This is completely false. There is no rule in the credit card processing industry that says leases are required. It’s up to each processor to decide how they’re going to charge for terminals. In many cases, the processing company rep you’re meeting with will only make any money off your account if you sign a lease, so for the rep it’s a negotiating factor. If they can sign you up for a lease, they earn a big payday for signing you up, and they can ride off into the sunset. If they’re sketchy in the beginning of your relationship, what else is hidden in the fine print that you should be worried about? Find a merchant processing company that wants to help you save money rather than force you into a lease.
New terminals cost anywhere from $150 to about $400, depending on the brand. The terminal that we recommend is the VX 520 CTLS and costs around $250. It can do chip cards (EMV) and also allow for nearfield technology. Let’s be honest here, if the rep has an honest face it’s not that hard to get sucked into a lease with a provider. Let’s look at some numbers that will help lay this out a little better:
The average lease of a credit card machine is 48 months
$30 lease x 48 months = $1440
$50 lease x 48 months = $2400
Some leases may be 36 months
$30 lease x 36 months = $1080
$50 lease x 36 months = $1800
All of this, because a rep walked in that had an honest face? I don’t think so. Arm yourself with the knowledge that you can easily get a fantastic terminal for less than $400, and no matter how the rep smiles at you, decide that you’re not going to pay an extra $1,000 for their smile. (unless you feel compelled to help with braces, but that’s a different story.)
Yes, a terminal lease can be a tax deduction but it doesn’t means that’s good. The amount that you pay in fees throughout the life of the lease isn’t worth the deduction when you compare it to the price of buying a new terminal outright. We’re talking about saving thousands of real world dollars here!
Some reps might tell you that you have to lease a credit card machine to get the best rates – because they can make a lot more money upfront. Instead, look for a merchant processing company that wants your business for the long haul; not just on day one.
Just remember, when you’re looking for merchant processing equipment for your business, if the rep suggests that you lease, it’s best to move on and find a more reputable processing company to work with. You want a company that is going to work for your business month in and month out, not one that forces you into a multiple year contract and signs you up for a lease that makes them thousands of dollars extra. Knowledge is power, go and use your new power to save your business some hard earned cash.