Free Credit Card Terminals - Contracts & Cancellation Fees

There are many companies that offer free credit card terminals along with their credit card processing services. Most of them offer it to encourage you to sign a long term agreement with high cancellation fees to retain your services even if you want to use another processor. This is just as bad as signing a long term lease agreement. So be aware before signing any agreement.

Look & ask about the following two things:

1. Is there a cancellation fee? As I mentioned above some companies lure you in with a free terminal. They then have tons of hidden charges that eat your hard earned revenue away costing more than the purchase of a credit card terminal would have.
2. Is there a length to your agreement? Even if you are told there is no cancellation fees make sure they do not have a length to their agreement. Unless it is month to month they could be hiding something and end up having some type of cancellation costs.

I tell everyone that I quote to watch out for this as too many times a merchant chose a different processor due to a deal that looked more attractive to find they are now stuck with a high cancellation cost.

Total Merchant Services offers our free terminal program with no cancellation fees and a month to month agreement. Whats the catch? That's the best part... there are no catches. We want to earn your business and we are so confident you will stay with our company that we are willing to invest in your business by providing the best credit card terminals out there - for free.

For more information on our services feel free to give me a call at (800) 518-6825 or visit my site at www.totalmerchantservices.pro.

Credit Card Processing Interchange Costs

Interchange Explained

Interchange can be complicated to understand. Simply put merchant services interchange is the cost that issuing companies like Visa, MasterCard and Discover charge merchant service providers to process credit cards.

Each card that is issued to a consumer or business falls under one of the above brands. Each brand has multiple different types of cards. Some examples would be debit, rewards, corporate, standard and the list goes on and on. There are 100's of different card types and each one of these categories of cards carries its own cost based on interchange that ranges from 0.05% + $0.22 up to 2.95% + $0.10.

How Do Processing Companies Make Money?

There are a few different ways a credit card processing company charges a merchant to process credit cards. To keep it simple we will look at two common examples.

• Tiered Based Pricing - This type of pricing group's cards in to several different categories based on their interchange cost. Each group of cards would fall in to Qualified, Mid-Qualified or a Non-Qualified grouping. Since individual card types carry different costs the only variable is the amount that the processing company makes off of the transaction. The statement you would get from your company if you have this type of pricing would be simple with only 3 rates. The downfall is thought that you would be paying excessive fees for many of the cards you accept.



• Interchange Bases Pricing - This type of pricing does not group the individual card types. You would pay a fixed amount above the actual cost for each card you accept. The fixed amount that you are charged above cost depends on the volume you process and the amount of transactions and could be anywhere from 0.00% on up. The statement on the other hand with this type of pricing would be much more detailed and could look confusing. This is due to each of the many card types being outlined at cost. Even though it looks a lot less simple than the tiered pricing you only pay a fixed amount above cost.

What should you do now?

Credit card processing statements can be so confusing and often have hidden fees that are missed by an untrained eye. It is best no matter what type pricing you have now to send your statement to a professional merchant services company to have it analyzed. I am constantly looking at statements of companies that thought they had a decent deal to find there are hidden costs that could be cut saving them money month after month.

If you have any questions or would like me to prepare a savings analysis for your company feel free to contact me at 800.51.TOTAL / 800.518.6825. Or you can complete a custom quote request and attach your credit card processing statement HERE.

Make it a great day!

Credit Card Terminal Leases Explained

There are some companies out there that are still signing terminal lease agreements! Unbelievable!

A normal term on a lease agreement for a credit card terminal is 48 months and in many states these agreements are non-cancelable. I have seen prices on these agreements range from as low as $19.95 a month to as high as $160 a month with some extra fees charged by the leasing company. That would bring the total cost for the terminal to $957.60 to $7,680 plus those extra fees.

This is how leasing a credit card terminal works: The agent from the credit card company has the merchant sign the lease agreement upon setting up their merchant account. The merchant account gets set up, the agent purchases the terminal and the terminal is sent to the merchant. On average credit card terminals only cost anywhere from $100 to $499 at the maximum (for standard credit card terminal). Once the terminal is received the merchant services agent will send a lease confirmation to the merchant. The confirmation is signed and sent back to the agent who then forwards it to the leasing company. The leasing company then funds the agent for the lease. 

Let's look at how much the agent now makes off of the lease. Once the confirmation is received the agent is funded. The agent gets paid a large amount of the total that will be collected over the term of the lease. The actual amount funded varies dependent on the credit score of merchant. For the high cost $160 a month lease mentioned above the agent could take home up to $6,650!! In that example the terminal would have cost the agent about $299 dollars new. That leaves the agent with $6,351 profit.

Well we see why it's a good idea for the agent to set up a lease, but is there any reason why a merchant would want one? In the case of a credit card terminal the answer is simply NO!

I personally do not know how the agents that run around tricking people in to signing a costly leases sleep at night. 

Total Merchant Services offers the best state-of-the-art equipment at no cost to the merchant with a month-to-month agreement and low monthly fees. Why sign a lease when you can get it for free?