Why would you do that?

"I leased my credit card processor."

Why!!??!! Why would you do that?

"There's a guy here trying to get me to lease a credit card machine."

RUN!!!! RUN AS FAR AND AS FAST AS YOU CAN!!!

Let's talk about business math.

Credit card terminal A processes cards quickly and quietly, has a small footprint and an easy user interface. You can lease it for $49 a month for 36 months.

Credit card terminal B is the exact same piece of equipment, brand new out of the box. It's free, and if it stops working you can get an equally free one that looks just like it.

So- what's better for the merchant, $1746, or free? Seems like a no-brainer, but every day I see smart, successful business owners that chose the $1746 option.

Now let's take it a step further. What if I told you that with the $1746 option, about $1000 of that goes straight into the pocket of the salesman who sold the equipment? Because that's the case. Kind of makes your ears burn, doesn't it.

One step further- your 36 month lease is actually a never ending monthly payment. At lease end, you have to return the equipment- or you can keep it, as long as you keep chucking out your $49.00 every month. Now your $1700 is $2352, or $2940. For something you could have had for free!

There may be a valid business case for leasing a credit card machine, but I have never seen it. Yes, a merchant gets to claim the depreciation on her income taxes; but I don't think the depreciation allowance comes anywhere near seventeen hundred dollars. I've heard salesman that lease terminals use buzzwords like "allocation of equipment" and "end user serviceability ", but that is a salesman trying to fog an issue and put a grand in his pocket.

There are processing companies that will provide their merchants with free equipment- not many, but a few. You can purchase a brand new terminal outright for a few hundred dollars. You can buy them refurbished on the internet for less than a hundred dollars.

One final note, if you still think leasing a terminal makes since to you. Go online and Google Northern Leasing, and LFG, and Eagle Finance, and Pushpin Holdings. See if that is a road you would like to travel down.

If I were a merchant I would want to stay far away from it.