Owning a business is quite the investment. And when you layer in the need for payment processing, the complexity of managing your finances escalates significantly.
This is especially true when solution providers charge hidden fees, outrageous markups, and endless hours of confused Google searches. Not to mention, some credit card machines can be shockingly expensive. Depending on the credit card terminal you choose, buying a new machine could cost your business between $300-$800 per terminal. Most small businesses cannot handle that cost when starting.
Thankfully, we’re here to break down how you can save when investing in a credit card machine. Whether the solution is leasing machines, opting for refurbished models, or buying wholesale to save in the long-run, there are several ways to save on your business’s credit card machines.
TL;DR
- Credit card machines and terminals can be costly. Thankfully, your small business can find alternatives to renting or buying equipment at full price. Many businesses buy refurbished machines at a low cost or lease-to-own their equipment.
- Owners are encouraged to ask for help from their point-of-sales representatives or other providers.
Opt for a lease-to-own option
Many small businesses choose to lease their credit card machines. But unlike renting the machines and throwing money at them with no return benefits, a lease-to-own option allows businesses to pay off their credit card machines incrementally. Most lease-to-own options range between 12-24 months. The leasing agreement is often between the merchant service provider.
Lease-to-own agreements differ in price, depending on the type of terminal you purchase (wireless are more expensive than older models), the length, and if your business requires a separate receipt printer. Lease agreements range from $25-$50 a month typically.
Benefits of leasing credit card machines
Leasing agreements on expensive equipment can benefit small to medium-sized businesses just starting out. Spreading out smaller expenses allows your business to gain all the equipment to thrive. But while leasing offers spread-out deductions, purchasing equipment outright often allows for a more significant immediate tax write-off via Section 179 of the tax code.
Leasing agreements provide small businesses access to the latest business technology they might not have had access to if they chose a credit card terminal they had to pay for in full.
Drawbacks of the leasing-to-own
While leasing equipment can be one of the best short-term options for your business, compare the cumulative lease costs to the direct purchase expenses. Most lease agreements end up costing more than purchasing the product flat-out. While incremental payments are convenient, buying the equipment right out can be wiser than paying more than the card machine is worth.
Buy refurbished equipment
Buying refurbished credit card machines is another cost-effective solution to a potentially expensive problem. Refurbished credit card processing machines offer both cost and environmental benefits.
And contrary to what some might think, these terminals aren’t old or outdated. Many connect to ethernet, come with contactless payment, and connect to the WiFi. More often than not, refurbished machines work perfectly fine. However, when buying refurbished, verify the PCI PTS version. A machine with WiFi is useless if its security certification has expired, which could expose your business to non-compliance fees.
Ensuring your equipment’s reliability
When purchasing a refurbished payment terminal, choose one with a warranty. Never buy a machine labeled “as-is.” Always purchase from a trusted source. Many businesses refurbish the best credit card machines, so you don’t have to worry about quality.
And don’t forget to read the reviews and the fine print before you buy. Verify the seller’s authenticity and the product to ensure everything is above board.
Trusted sources for purchasing refurbished machines
Always purchase refurbished units from certified payment hardware refurbishers like TeleTraders or directly from your processor. Generic marketplaces like eBay often feature “locked” hardware that is impossible to reprogram.
Negotiate with providers
One of the best ways to save money when making a big purchase is to develop and flex your negotiation skills. (If you’re able to negotiate in person—even better.)
If you choose to purchase from an ecommerce company, research their competitors’ prices for credit card processors, and ask if they can meet or beat them. Negotiating also helps vendors get to know you and your business needs.
Tips for negotiating
- Be professional
- Do your research
- Watch the market for the best time to buy
- Treat your vendors like experts
- Get quotes
- Don’t be desperate
Avoid renting equipment
Although the benefits of renting might tempt small to medium-sized business owners, the risks are not worth the reward. Before you decide to rent your credit card terminals, run a long-term cost analysis to see if you would be saving money.
Renting vs. leasing
Unlike with leasing-to-own, renting equipment will throw away money that you could have invested in your products. While some leasing agreements are more expensive than renting options, the long-term effects are much more cost-efficient.
As you’re running your business’s long-term cost analysis on renting, run it on a leasing agreement. While there is red tape in both of these agreements, leasing-to-own results in the product completely in your ownership, while renting is a continual cost with no return benefit.
Beware of “free terminal” offers. These are usually rental agreements in disguise, where the cost of the machine is hidden within inflated transaction percentages.
Alternatives to rental agreements
- Borrowing from business friends
- Leading-to-own
- Incremental payment plans
- Alternative payment solutions
Buy equipment from your POS or payment processing provider
If none of these money-saving hacks work for you, consider buying your necessary equipment from your POS system or payment processing provider.
Both systems interact throughout the sales. Your POS system takes the card payment, while the processing provider transfers the funds. If you purchase your equipment directly from your providers, you will likely have a smoother, potentially contactless checkout process.
POS and payment processing providers don’t necessarily need credit card terminals. As long as they can connect to your machine’s WiFi or Bluetooth, they can conduct their tasks. If you already have a subscription to these systems, you can bundle the equipment in a deal and find new savings.
If you already set up a point-of-sale system or payments provider, make sure the equipment you’re purchasing is compatible with your system, whether by Bluetooth or internet connection. Make sure they work with typical cards/payment methods like debit cards, Discover, Mastercard, Apple Pay, EMV, and more.
Conclusion
While there is not one clear solution to finding the best credit card machine for your business, there are several options.
Want to save even more money on payment processing? At Stax, we believe you shouldn’t be locked into 48-month leases for equipment that will be obsolete in 24. We prioritize ownership and transparency, providing compliant, modern hardware at direct costs so your technology works for you—not the other way around.
FAQs about card machines
Q: How can you save money on credit card machines?
To save money on credit card machines, consider these strategies:
- Compare pricing models of different providers to find competitive rates.
- Look into refurbished or second-hand machines from reputable sources.
- Purchase your card readers from your POS or payment solutions provider.
Q: How much does a card machine cost?
The cost of a card machine varies based on the type, functionality, and provider. Modern countertop terminals typically range from $300 to $800; anything significantly cheaper should be scrutinized for security compliance. Additionally, there may be ongoing fees for service, transactions, and possibly rental fees, depending on the provider and plan you choose. The most sophisticated ones can cost up to $1,000 per terminal.
Q: What is the cheapest way of taking card payments?
A good way to save on credit card payment processing is through a membership-based pricing model like Stax Payments. With Stax, businesses pay a flat monthly fee for access to direct-cost payment processing, eliminating the variable fees and percentages typically charged per transaction.
Q: Which card machine is the best for small business?
The best card machine for a small business depends on the business’s specific needs, sales volume, and mobility requirements. Look into your business requirements and prioritize providers that offer flexibility and no long-term contracts. It’s also best to choose systems that integrate with existing POS software to help you save money (and headaches) from having to integrate separate solutions.
