Should you buy, lease or rent your payment terminal?

September 5, 2018

If you’re looking into setting up a payment terminal (aka PIN pad) for your business, there’s a chance you’ll run into the question of whether to buy, lease or rent a device. Each solution is a viable option, but each leaves you with different responsibilities and fees depending on which you choose.

It’s important to do your research when making any impactful business decision, especially when payment terminals and processing plans are in question. To help you understand which option is best for you, consider the following pros and cons of each of the three major choices.

Buying a Terminal

Buying a terminal is likely the most simple to understand of the three options, but surprisingly fairly uncommon. Payment terminals can be bought directly from some payment processors, or through other third parties.

Pros:

  • Merchants have ownership of the terminal.
  • It is a one-time purchase.
  • Merchants are not tied to a rental or leasing contract with a payment processor.

Cons:

  • Merchants incur any repair, replacement, or software update costs.
  • Merchants incur any cost and effort to ensure terminal is PCI-compliant.
  • Terminals quickly depreciate.
  • Most terminals are incompatible with other payment processors.

Leasing a Terminal 

Most terminal leases allow merchants to use their payment terminals for a monthly fee that goes towards the cost of the final ownership of the device. At the end of the leasing term, some leasing plans allow merchants to upgrade their device at a cost, or continue processing with the device they now own.

Pros:

  • Ownership of payment terminal at the end of agreement.

Cons:

  • Lease agreements are expensive to break. Merchants may have to pay additional pay-out costs, serving costs, on top of paying out the remaining of the lease.
  • Merchants are typically unable to upgrade their terminal during the lease period.
  • Often requires multiple contracts with more than one party (leasing agent and processing company).

Renting a Terminal

Renting a terminal allows merchants to use a terminal on a contractual basis, for a monthly fee. Given that the terminal is still owned by the payment processor, many processors take on the responsibility of the upgrades, repairs and replacements that the terminal needs.

Pros:

  • Certain technology and software upgrades are included in most rental packages.
  • Flexibility to upgrade terminals at a small upgrade fee.
  • Free terminal repairs and replacement when merchant isn’t at fault.

Cons:

  • Payment options are limited to only monthly payments.


​If you’re interested in learning more about the options you have when it comes to payment terminals, make sure to take a look at our articles Is It Time to Update your Credit Card Machines? and How to Choose the Right Payment Terminal For Your Business


The information in this article is provided solely for informational purposes and is not intended to be legal, business or other professional advice or an endorsement of any of the websites or services listed. 

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