Buy or not to Buy? (Should You Lease Your Credit Card Terminal Or Buy)

November 12, 2015

We’re going to get down and dirty today with math (the amount of enthusiasm is overwhelming), and answer the pressing question surrounding credit card terminals for your retail, bar, or restaurant business:

Should you buy or lease your credit card terminals?

Buy.

Okay, we’ll explain why you should buy instead of lease.

Costs

It may seem scary to invest so much money in a credit card terminal all up front.

The average card terminal runs on the low end $200, and high end $600, and that’s for one. That’s no small chunk of change, unless you’re Scrooge McDuck, but not all of us have pools of money to swim in.

Not everyone can buy a terminal
(credit: imflip)

Most processors will offer a friendlier number if you choose to lease the terminal for around $49 dollars a month (highest we’ve seen is $120 a month), but $50 is the norm.

That seems more manageable, but this lease number is deceiving.

It costs more than you believe

That $50 is only for one terminal, if you need two terminals it’ll be closer to $100 a month.

That also never includes service charges, so that customer support will add to that original $50. It also doesn’t include the actual interchange rates and processing fees.

Pretty much you’re paying $50 a month to only lease the one piece of equipment. My that $50 is stacking up fast.

But wait, isn’t that still cheaper?

No.

Let’s take the low end of the monthly charge by itself, and compare it to the high end priced terminal of $600. $50x12 months is...well looky there! $600! (We know that’s right, because we used a calculator!)

Within the first year, you’d have already paid for the terminal. So you’ve already spent the money on a piece equipment in a year, that you leased and do not own. It’s paid for itself by this point!

Still not convinced?

The contract

Yes, when you lease terminals, you are bound by a contract, and charged fees for switching processors. Those fees, are also no small chunk of change.

So in the course of 4 years, you’ll have paid $600 x 4 (which is $2,400), for one terminal, that would have cost you $600 (on the high end, most are less than that).

Plus all the other fees and rates you’d be paying normally.

If you lease equipment, you’ve likely been had

That’s also assuming your processor leasing you the equipment, does not increase your rates every year; which you are locked into a contract to accept.

We could go on forever about this, but the truth is it’s a horrible investment to lease your credit card terminal.

Buying a high end terminal will still be cheaper in the long run then leasing and signing a contract with a devil of a leasing processor.

Invest in equipment

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