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Don’t Lease a Credit Card Machine!

By March 24, 2023April 12th, 2023No Comments

Credit card terminal leases benefit processors not you. Don’t fall into the trap of leasing machines.

It’s that simple. The article below will provide plenty of reasons why you shouldn’t lease a credit card machine, and this settlement involving a large leasing company is further proof.

Credit Card Machine Leases are Nonsense!

Thankfully, the practice of leasing credit card machines has been declining, but some processors just can’t seem to let the cash cow go. Leasing processing equipment is a big money maker, and processors with questionable business practices will ride the gravy train to the end of the tracks.

An experience we had here at CardFellow will give you an idea of just how much money a processor can make by leasing a credit card machine.

We helped a dental office that was paying $45 a month over four years for a PIN pad that they could have purchased for $90. They’re paying $2,160 for piece of equipment worth $90. The monthly lease amount paid for the PIN pad in just 2 months, but the office had the lease (with the monthly payment) for another 46 months after that. The processor is making a profit of $2,070!

We would have loved to post the name of the processor, but the dental office asked us not to. Please post a comment below to let us know if you’re stuck in a lease. We’re more than happy to give processors willing to lease equipment some negative press.

The exact amount that the processor charges for the equipment you lease will vary, but whether you overpay by a little or overpay by a lot, you’ll still wind up paying more than you need to for equipment. In this snippet from an equipment lease, the business is paying more than $1,500 over 4 years for a machine that costs a few hundred dollars.

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Save yourself the money and avoided leasing.

Save yourself the money and avoided leasing.

Benefits of a Lease (According to Processors that Lease Equipment)

The term beneficial lease is an oxymoron when referring to processing equipment. Regardless, let’s look at the benefits of leasing as provided by processors that lease equipment.

No Initial Costs

Well, this is certainly true. A lease does not typically require an initial investment. Instead, it drains your bank account over a period of two to four years. If possible, consider borrowing $200 for a friend or relative if this is your main motivation for leasing a machine.

Fixed Monthly Payment

They’re right again. Leases do typically have fixed monthly payments. Of course, a single fixed payment of $200-$300 (to purchase a machine outright) is a lot more financially attractive than 48 payments of $50.


This selling point is always a headliner when it comes to leasing. After all, technology is moving so quickly that your terminal will be obsolete in a year or two. Right? Wrong. Modern terminals will be functional for quite some time. Even if you have to purchase a new terminal every five years, you’re still paying much less than you would have if you went the leasing route.

Lease Costs are Tax-Deductible

Of course they are, but so is the cost to purchase a terminal. This one is laughable and not a good reason to justify leasing a terminal.

“It’s Not the Agent, It’s the Processor”

This is a lame excuse. The organization selling processing services, whether a direct processor or an ISO, has the ultimate say in what is and isn’t an acceptable practice. Some two-bit agent using their processor as an excuse to lease equipment is one you should throw out of your store or office.

Agents and ISOs earn (a lot) of commission by leasing equipment, and any willing to do so is simply looking to pad their profits.

Look at First Data Global Leasing, for example. First Data has thousands of ISO and agents, and their leasing program is available to any that want to use it. However, many prefer not be associate with gouging their customers on equipment costs.

Getting Out of a Credit Card Machine Lease

Unfortunately, lease agreements are typically water tight. You’ll have better luck getting out of a straightjacket than a lease agreement.

The best thing to do if you’re stuck in a lease is to read your agreement carefully to determine how much notice you have to give to cancel your agreement. Once you figure out the date, set a reminder so you don’t miss it.

And forget about buying your equipment at the end of the lease. Most leases have a fair market value clause that would make you pay more than the terminal is worth. Not to mention that processors usually sell equipment at or near cost with a new credit card processing account.

There is some good news, though, if you’re looking to break your lease because you want to switch processors. A lease agreement is typically separate from a processing agreement. This means that you can cancel your merchant account agreement without having to cancel your lease agreement.

Many credit card machines such as those made by Verifone, Hypercom. and Nurit are universal and can be reprogrammed to work with different processors. If you have a universal machine, you can ditch your current processor, continue paying on your lease, and use the machine with your new processor. While you’ll still have the equipment lease, you may be able to save on your processing costs, so it’s better than nothing.