Terminals Are Generally Free

Free.

That bears repeating: Free.

Why do I take the time to say it like that? Frankly, in my industry I setup two types of businesses. One is opening its doors for the first time and has never taken credit cards. The other has been open for years and has taken plastic for years. 95% of what I deal with is the latter. They are in business now, have a history of card usage, and unfortunately a history of over paying for their hardware.

One of the last businesses I have spoken to had a chain of 500+ stores and most of their machines were still on (all had been on at one time) a lease. The lease was for $48 a month per machine for 4 years. they could have gotten their machines for free, but instead they paid $26,736 a year or $106,944 over the course of the 4 year agreements when they could have gotten it for free.

How it works

First of all, almost any merchant service provider worth his salt (or her salt ladies) will get you the machine for your business for free if you process $1,000 monthly. They do this by giving you a monthly minimum that you must meet of $25. That does not mean you only have to process $25, it means the processor must earn $25 in fees. That means if you process $1,000 in a month you should have about $25 in fees more or less (as always it depends on your rates: higher rates earn the the fees more quickly, lower rates more slowly, ...but you knew this already didn't you?).

Now this is different from a lease in several key ways:

• A lease is for a set period of time. Even if your business fails you have to keep paying a lease until your four years run out.
• If you have a lease you pay for your terminal no matter how much you do a month. Seriously, if you have a lease of $48 a month and you process $5,000,000 a day; you will have to pay all the fees on the $5m + the $48 lease.
• Most leases are non-cancelable. this is so that if you find a better merchant rate, your still stuck paying your old company for your lease.
• Leases often have provisions stating that non-performance is not an option for cancellation.
• Leases are often significantly higher per month than rentals, flat out purchases, free placements, or anything else.

The only real provisos I can mention here are these: First and foremost, does your company do $1,000 per month? Are you close? If so go for free placement, because unless you melt it down to slag, they will generally replace it free twice a year (ask your provider to make sure). This includes if you drop it, fry it via a lightning strike, or spill coffee on it. The second is: do you need more than one machine per location?Normally they will give you one for a $25 a onth minimum/ $1,000 a month in processing dollars, but most will only place a second one for free if you process $100k monthly. I know it doesn't make sense, but it's their ball game. Either way, most businesses need one and can get it.

Free.