Credit Card Terminals: Purchase vs. Leasing

When your business chooses to accept credit and debit card payments in-store, you’ll need a credit card machine/terminal and a credit card processor. There are all types of credit card terminals on the market. The options come from a large variety of product manufacturers, with a huge selection of various types and sizes, and a whole host of features and capabilities that vary from one product to the next. It can get overwhelming to even know where to start.

Choosing the right payments technology provider for merchant services such as credit card processing and point-of-sale products will alleviate some of the burden on you while you focus on growing your business. We understand saving money is one of your top priorities. That’s why we want to shed some light on why it’s best to avoid leasing credit card terminals.

At Chosen Payments, we do not offer leases to our merchants. We receive many calls from very unhappy merchants who have unfortunately been locked into a lease in the past. This prevents them from switching their processing provider during the term of the lease. We sympathize with business owners who have entered into a lease as it can appear so enticing to pay a smaller monthly price than a large upfront purchase cost. This is especially true for new businesses who are forced to make many purchases prior to opening their doors. 

We’ve heard our fair share of horror stories when it comes to leasing payment terminals.

An Example of Foolish Leasing

Beverly, the owner of a local dry-cleaning business for over 30 years decides to sign a lease agreement for a new credit card terminal. 

The Account Representative presented Beverly with a lease agreement for $40/month over 48 months. Her total price for that credit card terminal is now equal to $1,920.00.






48 months


An Example of Purchasing

If Beverly would have purchased the credit card terminal instead, she would have saved more than $1500! 

Typically, from our experience here at Chosen Payments, we know that a credit card terminal purchased upfront is about 10% of what a merchant might pay over time in lease. The same product Beverly paid $1,920.00 for actually sells for $150.00-$350.00. Sadly, Beverly has overpaid by $1,570.00 for her credit card terminal and may be faced with yet another payment depending upon the lease. Some require a “Fair Market Value” buyout, while other leases may have a $1 or 10% buyout at the end of the lease.

Other Considerations

Keep in mind, there are more expensive credit card processing devices and fully integrated systems, however; the lease payments will be higher at around $100+ per month for an average of 48 months for a total of $4,800.00 for a high-end system. Consider this against a maximum one-time total fee of $1,800.00 that includes full installation and set-up.

This information is already hard to digest, and we have one more unfortunate piece to add. Many credit card terminals are “sunset” or discontinued by the manufacturer within 2-3 years. Think of it like your personal smartphone; manufacturers make upgrades frequently, add more “smart” features, etc. a few years later, that phone is no longer available and usually no longer holds value. Once a manufacturer sets an “End of Life” date, these products will no longer be supported. Just like with your smart phone, the same cyclical pattern of technology upgrades happens with payment processing products such as your credit card terminal and point-of-sale systems. Merchants are left paying monthly lease payments on a product that can no longer be serviced which not only means there is no value to the product, it also leaves them unsupported and open to a much higher risk of fraud.

The Moral of the Story

Forget leasing. 

Work with a trusted and reliable credit card processing provider such as Chosen Payments. Ask about incentives such as free terminals or activation bonuses to help keep the costs of a credit card terminal to a minimum.

Is it time for a new credit card terminal? We are here to help you with the selection. Call your Account Executive or call 855-4CHOSEN.

Leave a comment