Some business owners who want to start accepting credit card payments would rather lease processing equipment than purchase it outright. Of course, quite a few vendors and companies will happily rent this equipment to you. But before signing up, you should ask them these six questions.
1. What fees I will be charged?
Make sure you know exactly how much you’ll be shelling out before you sign a contract. In addition to the price of the monthly lease, you may also be required to pay for equipment insurance, gateway or access fees, and other “add-on” charges.
2. What brand and model of swipe terminal will I be leasing?
Once you have this information, do a little research to see whether you can purchase the same terminal for less than you’ll pay to lease it. It’s not unusual to find the same equipment for $200 to $400, which is less than paying $20 a month for even a year or two.
3. Which credit cards does the equipment process?
All equipment is compatible with Visa and MasterCard, but what about Discover, American Express, and Diners Club? Don’t assume that the cards you want to accept will match the ones that your leased equipment can process. Inquire.
4. How long is my contract, and how do I cancel it?
Many credit card equipment leasing companies require you to give notice that your are canceling your contract long before your term is up. Find out if this is the case with your provider — and if there are consequences for missing the deadline. Note: You probably won’t be able to terminate your contract early without paying a penalty.
5. What kind of customer support do you offer?
If your equipment malfunctions, will you be able to contact someone immediately to get the problem fixed? Can you call, chat, or email the company 24/7, or can you seek assistance only during business hours?
6. Is there an alternative to buying or leasing equipment?
Before agreeing to buy or lease credit card processing equipment, consider a mobile-payment service like GoPayment as a means to avoid the hassle. To use GoPayment, all you need is your smartphone or tablet computer, plus the free app and card reader provided by Intuit.