So you’re on the lookout for new credit card machines for your business or, perhaps, you’re forecasting replacement costs for your stores and need a working range to work off of.
Whatever your reasoning for being here, it’s important to understand that credit card machines are a bit tricky when it comes to pricing. Almost all of them carry a variety of associated fees, and it’s never “just” the hardware.
With this caveat in mind, we’ll breakdown the costs into three separate categories: hardware, associated fees, and other miscellaneous fees.
Credit card machines can cost anywhere from $200 to $1,000, depending on the features you need and the company you purchase them from.
At the base level, you can expect a magnetic strip, display screen, keypad, and chip card capabilities. If you’re only looking to provide basic service, then you shouldn’t be spending more than a couple hundred dollars on credit card hardware.
The hardware you need is often based on the volume of transaction you have and specific transactional needs.
Prices rise substantially when you add in features such as a built-in printer, wireless capabilities, etc. You should analyze your brand and determine if providing a modern and innovative checkout experience is important to your customers (it usually is!).
If the upper end of that range is intimidating, there are some companies (like [Tidal Commerce]) finding more cost-effective solutions via all-in-one smart terminals. These are typically mobile, include a built-in printer, and feel both clean and modern.
Let’s cover the broad terminal categories types and how to figure out which terminal is best for your business.
Traditional terminals are typically wired, EMV compliant, can accept PIN/Debit transactions, have a keypad, and manually integrate with other devices.
If you transact large amounts, either volume or price, then you want to consider one of the models below.
In general a traditional credit card machine costs significantly less than most other forms of payment devices because of their, reliability, and their capability to easily be semi-integrated into your existing POS (making it easy to upgrade to an EMV solution).
The price ranges depend on additional features such as wifi connectivity, touch screens, etc.
These terminals are mobile friendly, can be brought directly to a customer, provide swiping capabilities via phone, support Apple Pay or Android pay, and are great for small to medium-sized transaction volume with small inventories.
Tidal Smart Terminal – $479
Smart terminals are mobile terminals that offer all and more of the capabilities traditional terminals have, but are also wireless, touch screen operated, and accept all types of payments.
If your business prides itself on being innovative and providing the best customer experience, you should definitely check these out. The cost of Smart Terminals may initially be steep, however over time the features quickly offset the initial cost.
Phone Swipers – $50-$100
Phone swipers are cheap and perfect for small businesses and people on the go. Since they’re so cheap, they make a great backup solution in case you’re out at an event, have an internet outage, or if your terminal is having issues with processing. You may also find some processors offering phone swipers for free.
We always recommend having a few with you and/or at your business location(s), provided there’s no costly monthly fees.
Take some time to analyze your current payment solutions and see which features are must-haves and which ones aren’t. Once you determine the type of terminal you’re looking for, you’ll have a better idea of what you should be paying.
You could also consider leasing terminals for a lower rate, we highly recommend purchasing and planning for the long-term when applicable. It’s almost always better to acquire a low-interest business loan (if necessary) to buy the machines up front than renting the machines.
Be careful when companies offer free terminals! It’s sort of like signing up for a cellphone contract. Always read the fine print. People don’t just give away machines without expecting a return on it, so you know that money has to be coming from somewhere, and more often than not, it’s you!
If you’re having trouble paying for terminals but don’t want to lease, you could consider an installment plan as well.
Shop around for warranties as well. They’re worth a lot in this business, and see if you can get extended warranties for all of your terminals.
As mentioned beforehand, a credit card machine’s cost never ends at the hardware. They’re always fees. It’s how processors make the majority of their income.
The major associated fees are: transactional, flat, and incidental.
As you’d expect, this fee occurs every time a credit card is swiped. Companies usually offer two styles of pricing. They either charge a percent based on transaction value coupled with a flat rate known as “simplified” pricing, or they calculate a customized plan based on monthly transaction revenue and interchange fees. This is commonly known as “interchange plus.”
Flat rates are typically percent-based and are coupled with a per transaction fee. This varies by processors, however, most rates range from 2% to 3.5% per transaction, while the per transaction fees can range anywhere from $0.00 to $0.50 per transaction.
Fee that occurs every time you batch your transactions.
Check with your payment processor to see the different types of fees associated with your merchant account and current terminal. Some processors may charge as much as $1 per batch, while typical processors will charge between $0.10 and $0.50 per batch.
Many terminals run a simple POS system, but almost all businesses use some sort of app integrations and software that is more specific to their niche. So keep in mind the software fees when projecting your costs. Software fees range depending on the type of POS system you have, typically the software fee is rolled into a support contract.
Other fees to consider when purchasing or renting new terminals could be anything from an annual fee for using the terminal to termination fees on your current terminals.
Make sure you take the time to review your existing contract with your provider and the proposed contract of your new provider before signing anything. Keep an eye out for hidden fees, loose language regarding early termination, changes in pricing as your transaction revenue rises or falls—anything that could alter your financial projections and arrangements with your provider.
Shady payment processing companies will often add these fees into your contract and neglect to inform you of them until they begin to take effect.
Do not fall for those companies, or if you notice those in your contract, get out as quickly as you can.
Buying a credit card terminal is almost never black and white once you start calculating the costs of associated fees, having a merchant account, and other misc fees that could bundled in with a contract. But with a keen eye for your needs and, by working with a trustworthy payment processor, you can make sure you’re making the most financially responsible decision for your business.
If you have any questions regarding credit card terminals, fees, or if you would like us to look over your existing contract to help spot those hidden fees—anything you need, please don’t hesitate to reach out to us.
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