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Need A Credit Card Machine For Your Small Business? Don’t Lease!

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Frank Kehl

Frank Kehl

Frank Kehl has been writing about merchant services, payment gateways, and international money transfer services since 2015. He has a Bachelor of Science degree from Penn State and a Juris Doctorate from the Ventura College of Law. After a long and enjoyable career of traveling around the world as an Air Force navigator, he’s comfortably settled down in the wine country town of Paso Robles in California’s scenic Central Coast region. He enjoys reading, photography, hiking, and numerous other outdoor pursuits.
Frank Kehl
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31 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Jill Sherman

    This article was so helpful but I wish I would have read it before I entered into a contract and leased my equipment. I was snowed! The rep that came out made it sound a lot more attractive and now I am being charged monthly fees Idid not se coming!
    I want to get out of my contract and do it the right way now. How should I go about it? After reading this I feel like it’s worth the 500.00 to cancel my contract. But will that even work? It sounds like I may even have a problem doing that. Any advice would be so helpful. Thank you in advance.

      Jessica Dinsmore

      Hi Jill,

      That sounds terrible! I’d suggest combing through your lease contract to see if there are any possible ways to contest the lease. Most lease contracts are noncancelable, meaning the merchant is on the hook for all 48 payments as soon as they sign up, even if they later go out of business. Unfortunately, there isn’t much you can do in this situation, unless your contract offers a way out. I wish you the best!

        Andrew Barnard

        I agree that owning your own terminal makes financial sense, just be aware of who you are allowing to install programming onto your machine and what their policy is regarding future removal of their programming.

        A few years ago we purchased our own VX-520 terminal and WorldPay programmed it for free. This year we changed providers and attempted to have the new provider reprogram our terminal, but WorldPay refuses to remove their certificate info from our terminal. WorldPay claims it’s company policy to not allow another provider to use our machine, essentially “bricking” it.

        I would highly suggest everyone AVOID using WORLDPAY!

          Franco

          Great information , my experience with First Data was horrible from the start. They have a third party person doing sales that promise you all this stuff cash back, etc. Then when you contact the company you find out that the guy that sold you the services doesn’t work for them directly. Took me a year to get the cash back. Then when the equipment has a problem they told me I didn’t have a warranty. I said you own the equipment they then connect you to the leasing department. different division same company. You spend hours going back and forth meanwhile your machine isn’t working and you can’t process your sales. Horrible Horrible Service. I finally got lucky and got a woman on one of my many calls that help me solve my problem.
          My question to you do you know companies that sell equipment in Canada?

            This comment refers to an earlier version of this post and may be outdated.

            Jessica Dinsmore

            Hi Franco,

            Give Helcim a try. I think they’ll be able to help you out with equipment.

              This comment refers to an earlier version of this post and may be outdated.

              T Henry

              I’m an agent in this industry and would like to offer a bit of advice. This article is 100% correct. Leasing is absolutely geared toward making a huge profit without you knowing it. Leasing is not typically offered by the processor, it is offered and sold through its agents. All the leasing company does is follow the signatures that the agent provides them, so in their eyes, nothing bad has happened. Before you pull the trigger on signing with any merchant service company. Make sure to read up on reviews of not just the company, but on the agent. Find an agent that is reputable, AND NOT only short term in the business. Get references from them, ask local business owners who they use and who’d they recommend. Find out if that agent will give you interchange pricing and offer a no contract merchant service agreement. Think of this like a car sale. There’s shady used car guys and there’s honest used car guys that back up their word. This industry works in the same manner. There’s no certification required to be an agent to do this, However there is a certification program out there that you can look into. Look up ‘electronic transaction association certified payment professionals’. There are a list of agents in there that will more than likely far exceed your expectations.

              To all business owners these are the demands you need met.

              Can you buy the equipment
              Can you get no contract on the merchant agreement
              Can you waive the annual fees (if there are any)
              Can you have interchange pricing (don’t go any higher than 25 basis points)
              Make sure you know how statements are given (most places are paperless so online access needs to be obtained)
              Demand no monthly minimum on your agreement (this is a sneaky way to get extra money out of you)
              Demand a copy of the entire agreement WHILE THE AGENT IS THERE, this also includes the terms and conditions packet (required to be given by all agents). Open that terms and conditions packet and look for ‘term and termination’ a lot of agents say ‘no contract’ but they have been known to lie about it.

              Happy hunting to all

              Tim

                This comment refers to an earlier version of this post and may be outdated.

                Randy Ruiz

                In your opinion who has the best rates for a merchant in using credit card transactions

                  This comment refers to an earlier version of this post and may be outdated.

                  T Henry

                  Randy, every merchant agent and company works a little different, ‘best rates’ is a very vague request. How about finding an agent that has a great reputation that works well with the local businesses. A good agent will price you good and treat you well when an issue arises. I know this is a very old post but thought i’d throw this in there.

                    This comment refers to an earlier version of this post and may be outdated.

                    Umut Kokangul

                    I signed lease with a credit card merchant. It was 40 months lease that I had been told if I do the lease for 60 months I will get better deal with fees. I told him it is all nice but what will cost me to get out of lease ? He showed me the part saying $299 early termination fee so I signed it. After 3 yes I wanted to close the account with merchant they took $950 from my account and I am still paying $160 for terminal I do not use. I am planning to sue the company for sending me representative who mislead me to sign the lease. Any advice on that ?

                      This comment refers to an earlier version of this post and may be outdated.

                      Abderrahim

                      The sales reps take advantage of business owner that usually just want to start getting money to there account not thinking how much of that money will be pocketed by the merchant services .some business owners are just happy to have a prossessor because they think they might not even be able to accepte cc .so there is a lot of business owners that don’t have a slight idea about the process .and even some smart business owners think about bottom line and cancelation fees but forget about other fee since most sales rep flat out lie lie lie.and when you call them to explain a charge they refer you to customer service which give you flat out truth about the charges or about the contract you didn’t have the time the mood the desire to read.so read those contract read reviews know what your business exactly needs before you set up an appointment with one of those reps.good luck everyone.

                        This comment refers to an earlier version of this post and may be outdated.

                        Gonzalo

                        I need advice. The Rep. of This merchant Company trick me when reading my present statement and make me belive that i was paying 3000.00 a Month on a 40000.00 credit card sales, and that he was going to save me 1700.00, but now that i sign the contract and the lease company by phone, i find out that i am only paying 950.00 with my present company and i havent use the equipment . How can i get out of this contract . they say it was a mistake reading the statement and i have to pay a termenation fee of 495.00.

                          This comment refers to an earlier version of this post and may be outdated.

                          Ryan Schwoeble

                          You need to contact a Business Solutions company that is wholesale and is able to buy out leases and has everything in writing with guarantee letters from the president of the company. Merchant processing companies do not offer this. Complete Business Solution companies do. I owned a business and have dealt with many different companies. When I sold my company, EIR Electric Pittsburgh PA, I became a consultant for such a company to help business owners out of these shady situations provided by these processing companies.

                            This comment refers to an earlier version of this post and may be outdated.

                            Gary Tracey

                            I was told I was not signing a lease but just agreeing to the % to take cards and now that switched to another company I have a collection agency trying to get $ 2,600 for the rest of a lease I didnt even no I was signing, I was told there was NO contract or lease but it looks like I sign one without my knowledge, this company was Electronic Payment Solutions the machine I thought was theirs was First Data Global Leasing,I am fighting this all the way to the end.

                              This comment refers to an earlier version of this post and may be outdated.

                              Amy Hilton

                              I’m in the same situation so what was your out come if you don’t mind me asking

                                This comment refers to an earlier version of this post and may be outdated.

                                Audie Courtney

                                After nearly two years of good service they flopped, sent a letter saying our terminals were no longer useable, after they had disconnected them from service and when we called to report the problem no one would respond back, we were told at least 10 times we will call you back and no one ever called back. We had 20 payments that could not be processed so we had to go to a different company and machine. after 3 to 4 weeks we get new machines show up at our office. we had called and left a message that we were canceling due to the bad service. at that time we were told we were under a 4 year contract and could not cancel, were are the customers rights when the company fails on there part. I was told it would cost $395.00 to cancel the contract. and then had to pay the rest of the lease on 5 machines that I did not order. The machines I have the lease on are no good. looks like another small business just got screwed over. I WOULD NOT RECOMEND THEM TO ANYONE. ANY SUGGESTIONS ON WHAT TO DO?

                                  This comment refers to an earlier version of this post and may be outdated.

                                  Jenny

                                  I am in the process of looking for another merchant service provider. When we bought our taxi business a few years ago, we inherited a contract with a less than stellar provider and a very nasty third party lease with unspeakable terms. The lease on the terminals should be up in a few months. I found your site today and have already learned so much about what to look for in a provider. But it looks like I have lots of homework to do still. I would prefer to purchase (long range?) wireless terminals for our small fleet but don’t know where to start. Which models are a good fit? I noticed your site was US based and I am from Canada. Do you have any knowledge about Canadian providers or can you direct me to a reputable source for information? Will terminals purchased from eBay (US) work with Canadian providers, that is, if they will allow that at all? I would like to thank you for a very informative site that helps take away a bit of the pain of finding a new POS provider. Keep up the great work!

                                    This comment refers to an earlier version of this post and may be outdated.

                                    jeffrey Santisi

                                    Wow! The horror stories continue. I spent 10+ years in merchant services and I’m totally disgusted with all the thugs, thieves and losers that now populate this once great industry. Merchant Service companies and reps should be required to get licenses like insurance and if they lie or deceive they lose license and are fined. That would knock out the slime and tremendously reduce a merchant’s expense

                                      This comment refers to an earlier version of this post and may be outdated.

                                      Dawn Kee

                                      Can I buy an I CT250 terminal from someone besides Elavon? Theirs are ridiculously expensive!

                                        This comment refers to an earlier version of this post and may be outdated.

                                        Tom DeSimone

                                        Hi Dawn,

                                        You can absolutely buy it from someone other than Elavon. The terminal will just have to be reprogrammed to work with your processor. Many processors will do this for free. Have you checked out Helcim? They set up accounts with Elavon, but might be able to get you a lower rate than you have now, plus their terminal sales/rentals are fairly priced. Just something to consider. Otherwise you can buy the terminal anywhere, from Staples to Amazon.com to eBay.

                                        -Tom

                                          This comment refers to an earlier version of this post and may be outdated.

                                          Mike Firestone

                                          There are also Independent Sales Organizations out there that will require you to upgrade your terminal, which may or may not be legitimate. But they will charge you a ridiculous amount of money for the terminal and if you try to buy the terminal from a reputable vendor, then they tell you they will charge you $100.00 or more to download the credit card application into the terminal. We all know they are making money on the transactions to begin with and the application download is generally free. Just another way to grab a few bucks.

                                            This comment refers to an earlier version of this post and may be outdated.

                                            Lnel

                                            There are a few Companies that are selling their leases at $159.00 to $499.00 monthly! They tell them they get a big discount on there credit card processing when it all comes down to it, they were paying more for the card processing than they were before! To get out of the lease the cost is over $6000.00! That is unfair business and ROBBERY!

                                              This comment refers to an earlier version of this post and may be outdated.

                                              Moaz Alibhai

                                              If you buy a terminal and later decide to switch to a different service provider, will the terminal work with the new provider ?
                                              Thanks

                                                This comment refers to an earlier version of this post and may be outdated.

                                                Ellen Karasek

                                                This website is full of remarkable advise for any business owner. Unfortuntely for me, I only found it ‘after a few hard knocks’ with a merchant terminal provider (you strongly suggested to avoid doing business with).
                                                I want to switch providers, but as a Canadian Business owner my options are limited.
                                                I chose to purchase my terminal several years ago (due to the unwanted surprises of a lease). I don’t know the steps to take to switch to another merchant provider. The sales rep at the time insisted there were no yearly fees, yet in the past 3 years they’ve helped themselves to a total of $380. referred to as ‘business fees’. One of these payments was for a whopping 189.84, without any advance notification or invoice. How do I make it ‘impossible’ for them to help themselves?
                                                Can anyone suggest how to proceed (switch) without disrupting the flow of business?
                                                Thanking you in advance for your advise!
                                                Ellen

                                                  This comment refers to an earlier version of this post and may be outdated.

                                                  Juie

                                                  I ordered the mobile reader, but i turns out the terminal comes with it ???? Why would I want that when I’m looking to go wireless? Buyer beware! Thanks for the BBB tip. Will try that.

                                                    This comment refers to an earlier version of this post and may be outdated.

                                                    Joe

                                                    We were told that our lease would be 24 months, my boss signed the contract after being told it’s only for two years. Being the shop/business just started, two years sounded a long period but she signed it believing it was the two years as promised. We have now found that she is paying the highest percentage per transaction possible and the highest rent for the unit! But that’s not all, in the very bottom corner of the contract is a box stating 48 months!!! Is this contact fraud? How would she get out of this? Telling her one thing and printing another is that fraud?

                                                    Thanks
                                                    Joe

                                                      This comment refers to an earlier version of this post and may be outdated.

                                                      ROB

                                                      ANY ADVICE ON HOW TO BREAK A 48 MONTH LEASE 36 MONTHS INTO IT

                                                        This comment refers to an earlier version of this post and may be outdated.

                                                        Tom DeSimone

                                                        Hi Rob,

                                                        Unfortunately terminal leases are among the hardest agreements to get out of. If you are not using the terminal at all and have no plans to, I would recommend sending it back and paying off the remainder of your contract well before the lease expires. You will have to pay off the contract one way or another, either month by month or all at once. If you wait until the agreement expires to send the machine back, you could end up getting hit with additional fines and penalties. Leasing companies generally pay for return shipping, and will send you a prepaid box to send the machine back in.

                                                        Other than that, I don’t have much advice for you. Wish there was an easy fix, but these leases are brutal. If you haven’t already, try contacting the BBB. In some cases leasing companies are willing to settle for a lesser amount if you bring the BBB into it.

                                                        Good luck,
                                                        Tom

                                                          This comment refers to an earlier version of this post and may be outdated.

                                                          Gregory

                                                          Thank you very much for this article and your website, in general. Very informative.

                                                            This comment refers to an earlier version of this post and may be outdated.

                                                            Antonia Nelson

                                                            In our business, the woman who set up our
                                                            Merchant account never told us about having
                                                            a four year contract! Our previous company had no
                                                            contract so we thought it was the same,
                                                            Wells Fargo has been horrible to deal with and I don’t
                                                            know how to get out of this, pulling hair
                                                            Out

                                                              This comment refers to an earlier version of this post and may be outdated.

                                                              Jeff

                                                              I think the worst thing about leasing is being locked into a 48 month contract for a piece of electronics that is going to be thrown around and looks old and worn out with 12 months. Worst is the fact that as PCI standards evolve yearly and as improvements to security levels emerge you(via Lower rates) or your customers can’t benefit till the lease is over where your can finally upgrade.

                                                              Avoid leasing It’s just smart business

                                                                This comment refers to an earlier version of this post and may be outdated.

                                                                kerstin Barber

                                                                MY EX WIFE HAD AN agreement with a credit card co. They did not personally handle the machine and left it to another company who did not fufil the tech help that she needed . She lost thousands of dollars because of their neglect . We must have had it fail at least a dozen times during the first two months of leasing. It failed many times later. We had them take the machine back and they never called us. We were under a contractual legal obligation to be tied to a three year contract , but we feel that after all our trying to get the machine back they ( the company they chose to service us) failed .

                                                                  This comment refers to an earlier version of this post and may be outdated.

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