Credit,card,equipment,leases,E business, insurance Credit card equipment leases: Enough is enough


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Complex rates and fees and obscure merchant account pricing contribute a great deal to the healthy skepticism that merchants feel toward the credit card processors. But one of the greatest contributors, for which there is little justification, is the outrageous practice of leasing credit card equipment used throughout the industry.Despicable is the perfect word to describe credit card machine leases that routinely carry markups of 1,500% or more. Lease agreements lock small business owners into a commitment to pay $1,400 to $5,000 or more over a 4-year period for PIN pads and credit card machines that cost only a fraction of that amount to purchase outright.The deceitful art of leasing credit card processing equipment begins with coaxing a merchant to sign a lease agreement before they’re able to educate themselves about the true market value of credit card processing equipment. Leasing companies are well aware of their outrageous profit margins, and their carefully crafted lease agreements carry language to squash any attempt by the merchant to get out of paying the lease fees once they realize that they’ve been had.Once a merchant service provider locks a merchant into a lease, there’s very little recourse other than to buy out the lease or ride out the full term of the contract making monthly payments along the way. A willingness to coax their clients into signing a lease agreement that they know is unfair tells a lot about the standards of a merchant account sales agent and the company that they work for.Merchant service providers that rely on equipment leases for profit tend to carry this trend through the rest of their service offering, and often impose hefty cancellation fees on their merchant accounts. It is very apparent that the agents and companies that employ these tactics hold inflated profits above the well-being of their clients or the quality of the service that they provide. After all, there’s no reason for them to offer competitive rates and fees or exceptional service when their clients couldn’t leave even if they wanted to due to contracts and cancellation fees.If you have had the unfortunate experience of having dealt with one such provider, and have signed an equipment lease, there is not much you can do about getting out of the contract. However, you can (and should) make sure that you have a cheap merchant account with the low rates and fees. Most credit card machines can be reprogrammed by a number of different processors. You don't have to stay with the provider that sold you the leased equipment if the merchant account rates and fees aren't competitive.Even if you will have to pay a cancellation fee to switch merchant account providers, the savings that a new, more competitive account will yield often justifies the expense in just a few months. A service like CardFellow is helpful in this situation because it evaluates your current account and compares costs and savings from leading price structures like interchange plus and flat rate credit card processing.The best thing to do is to avoid leasing credit card processing equipment. But if you've already signed a lease agreement, the next best option is to cut your losses and ensure that you have a competitive merchant account with the lowest possible rates and fees.

Credit,card,equipment,leases,E

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