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?