Credit Card Machine - Lease or Buy

Exploring Payment Options

Aug 13, 2008 Gail Cavanaugh

With the expenses in running a business, many business owners opt not to accept credit cards for their businesses, claiming they cannot afford the fees.

There are several options to consider: one can acquire a free terminal from a reputable merchant service provider with an option to upgrade to a new terminal in one or two years. One can purchase a refurbished terminal at a reduced cost or one can lease a terminal with the option for buyout of the terminal at the end of the lease. Any of these options would be a cost savings to the business owner and allow more cash flow for operating the business.

Two Free Credit Card Machines Avalialble

Many merchant services providers are offering the Hypercom T7P terminal as a free terminal, while others are offering the Nurit 2085. The Hypercom T7P terminal can process approximately 400 transactions per day, while the Nurit terminals can process up to 450 transactions per day. For most small business owners, 400 transactions per day will be able to meet their needs for credit card transactions.

Pay Now or Pay Later

One must weigh the options of purchasing a land line terminal or acquiring a free terminal because of the features included with each one. Neither the Hypercom T7P nor the Nurit 2085 have an internal PIN pad for processing debit cards. If the retailer plans to process debit cards, he must purchase an external PIN pad separately.

Both terminals can handle multiple applications such as check services, gift/loyalty cards, debit and credit cards. However, only the Nurit terminals can accept all four multiple applications. If the retailer does not intend on verifying checks, then the Hypercom T7P will meet his needs. While the credit, debit, gift and loyalty cards can be swiped through the terminal, a check reader must be purchased to verify checks.

Monthly Payments

Leasing a brand new terminal involves paying a monthly payment with an option to buy the terminal at the end of the lease period for a lump sum. For most companies, four years is the popular contract term. Monthly payments can be as low as $25. Lease payments qualify as an income tax deduction. The business owner will be able to operate the terminal for several years after the lease period.

However, Jean D. Siflett, Esq., CPA says in Smart Fast e-News that “the leasing company will come after you for payment even if the even if the equipment or product does not work.” For some people, leasing is beneficial because of the low outlay of cash, if it does not break down.

Short Term Needs

Purchasing a refurbished terminal at a reduced cost would be an option for a business owner who has limited cash. These used machines have a shorter life span, but may fulfill the short-term need for a terminal. For the business owner who prefers to pay cash in full rather than monthly payments over four years, this would be an option.

In conclusion, there are ways to purchase a credit card terminal when the budget is tight. If the business owner fails to act, he may miss out on sales.

The copyright of the article Credit Card Machine - Lease or Buy in Small/Home Business is owned by Gail Cavanaugh. Permission to republish Credit Card Machine - Lease or Buy in print or online must be granted by the author in writing.

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Comments

Mar 31, 2009 7:46 AM

Guest :

Good article. In my experience it is almost always better to purchase the equipment. If you shop around, you can find good pricing with similar warranties on refurbished equipment as new equipment. Stay away from ebay equipment unless you are good at repairs. There are several quality equipment vendors. The one I have had the best results from is www.creditcardsupplies.net.

Oct 14, 2009 1:10 PM

Guest :

After some research I decided to purchase a machine rather then lease one. In the long run it was a much cheaper option.
A little research on your own and not under the pressure of a sales person trying to lock you into a contract is helpful.
So after so comparison shopping I found the guys and gals at www.discountcreditcardmachine.com to have the best prices and service.

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