Should I buy or lease a credit card machine?

This is a very common question that’s brought up when people are shopping around for credit card processing. Let’s break it down so you can make the best-informed decision for your business.

Leasing a credit card terminal

Some credit card processing companies allow you to lease, or rent, a credit card machine. This allows merchants to pay a monthly fee in order to utilize the machine; the fee itself may range depending on the company. There are a couple of points you need to be aware of before signing any terminal lease: 1) ownership rights 2) proprietary issues.

Read the terminal leasing agreement – are you simply renting each month or are you paying off the terminal in installments? The main question you need to ask is will you actually own the machine? Also, is the machine proprietary? In other words, will it only work with a certain credit card processing company? If you decided to switch credit card processors, can you still use that terminal?

Buying a credit card terminal

Some people shy away from purchasing a terminal for fear of the potential high cost. The truth is, purchasing a credit card terminal outright can save you hundreds or thousands versus simply renting – best of all, you know you own the terminal and may take it wherever you please. Depending on the terminal model and specifications, one can run you anywhere from $100-$400. On average, a standard credit card terminal may cost you $200 or less.

Let’s imagine you decided to rent a machine for $30 a month and you are locked into a 3 year contract. There are 36 months in 3 years, so simply multiplying $30 by 36 months and you’re looking at a terminal that would cost you $1080! That’s a far cry from just $200. And you may not even own that machine per your leasing agreement—you could be paying $30 every month for the lifetime of your processing agreement!

The bottom line is that you are always looking to make the best financial decision for your business. Do not be lured by promises of free terminals or low monthly rental fees without understanding the terms and the cost. If you need help with purchasing an affordable credit card machine coupled with competitive rates, contact Group ISO at 1-800-571-2606.