Rent, Buy or Lease? How to Choose the Right Credit Card Terminal

As a business owner, you know that accepting credit card payments is crucial to success. But should you rent, buy, or lease your credit card processing terminal? This big decision comes down to weighing convenience vs. control. Here’s what you need to consider to make the smartest choice for your company’s needs.

First, What is a Credit Card Terminal?

A credit card terminal is the hardware that enables you to accept debit, credit, and mobile payments. It securely connects to card networks to authorize transactions. Your “integrated”  terminal should seamlessly integrate with your point-of-sale or software you are using to run your business.  Non-integrated terminals are stand-alone and not connected to a point of sale/software solution. 

When selecting a terminal, be sure to look for essential security features like EMV chip technology and point-to-point encryption (P2PE). EMV chips and P2PE encryption protect payment data by encrypting information throughout the entire transaction process. This enhanced security helps reduce fraud risk and chargebacks, which can lower your interchange fees. Processors incentivize merchants to adopt advanced security by offering reduced interchange rates. So investing in a terminal with features like EMV and P2PE provides protection for customers' data and your business's bottom line.

Renting Offers Convenience

The big perk of renting is simplicity. There are no upfront costs - typically just a small monthly fee. Rental agreements include support, repairs, and easy upgrades to new models. There is also no contract term. Terminals are pre-programmed for your payment processor so implementation is quick. Renting is ideal if you want hassle-free payments with little maintenance.

Buying Gives You Control 

Purchasing means you fully own your terminal typically lasting several years with proper care, paying for themselves over time. But repairs and replacements are your responsibility. Purchasing makes sense if you want maximum control and don’t upgrade often.

When buying your own terminal, it's important to consider portability. Choosing a terminal model that is not locked to a specific processor will allow you to switch payment processors in the future while keeping your existing terminal. This provides more flexibility and prevents you from having to purchase new hardware each time you change processors. However, some proprietary terminals like Clover are restricted to only working with their payment platform. Be sure to ask about portability and processor restrictions when selecting a terminal to buy. The ability to take your terminal with you gives you more control over your payments ecosystem.

Leasing is the Worst Option

Leasing processing equipment is usually the worst option. Leases require no upfront costs, which is tempting, but the total cost over the typical 4-year noncancelable contract far exceeds buying outright. Even returning leased equipment early does not release you from payments.

Sales agents tout leases as deductible business expenses without mentioning that purchased equipment is also deductible for less overall cost. Leases generate easy profits for providers, not good deals for merchants. After the last payment, you likely still won't own the equipment and must buy it at inflated prices or continue leasing indefinitely.

Leasing is an unethical practice in an industry with a bad reputation already. Reputable providers offer purchase options or don't lease at all. If a sales rep pushes leasing, it's a red flag to find a better provider immediately. Don't lease processing equipment.

Key Considerations

Assess your business needs and capacity:

• Budget - Renting costs less upfront. Buying has lower long-term costs. 
• Upgrade frequency - Do you need regular upgrades to the latest features?
• Wear and Tear - Does your operation lend itself to destroying equipment due to the environment in which your business accepts payments? 
• Technical expertise - Can you support and maintain a purchased terminal?

Choosing the Right Terminal Features

Beyond just renting vs. buying, it’s also important to consider what features your credit card terminal needs to have. Determine what capabilities are essential for your business model and customer needs. Key features to look for include:

• Payment types - Does it accept chip, tap, swipe, and mobile payments?
• Connectivity - Wireless, WiFi, Bluetooth, LAN options.
• Security - EMV certification, point-to-point encryption. 
• Portability - Do you need to accept payments in the field?
• Hardware - Does it have an easy-to-use interface and durable construction?
• Software - What reporting, analytics, and automation features are included?
• Integrations - Does it sync with your POS, payroll, and CRM platforms?

Carefully evaluate must-have terminal functionalities. Partner with a payments provider like Paystri who can guide you through choosing the right model, settings, and features whether you opt to rent or purchase. This ensures your terminal aligns seamlessly with your business processes and customer needs.

The great news? Paystri offers a wide array of payment hardware from leading manufacturers where both rental and purchase options exist. Our expert team helps identify the best solution for your business now and as you grow. Contact us to explore your custom terminal options!