How the rise of e- and m-payments affects you...

2015 will be year of the eCommerce and mobile payments

Unless you’ve been living under a rock (and, yes, withhold your judgment because I lived under a rock for many years), you’re aware at this point that payment processing has changed considerably since the first physical credit card terminal in the 1970s.  We still use those old terminals, yes, but now there are other ways of accepting credit card payments that revolve entirely around the internet, where the cards being used don’t even have to be there.  Nowadays, in fact, you can log onto someone’s website and buy something from their online store with just a couple of clicks; you can walk into a retail store and hold your phone to a scanner and complete a purchase.  Your credit card numbers are scrambled and stored in an electronic vault, and, if anyone touches your information, your bank usually lets you know seconds after the occurrence.  The way payment security and convenience has advanced in the past decade or so has been simply astounding.

Today I want to focus on eCommerce payments and mobile payments because these two payment methods in particular represent the zenith of payment technology (at least for the moment), and as the years stack up, mobile payments will likely gain a great deal of traction, and eCommerce payments will become even more popular than they are now.

Do you wonder why that is, though?  It’s not that people embrace whatever new thing is thrust in front of them—just look at New Coke or minidiscs.  Something else is drawing people to these new technologies.  I think it’s pretty intuitive, actually.

 

eCommerce and mobile payments are EASY

I can’t prove this, but I would wager that both e- and m-payments were conceived of with the intent to make life easier, both for consumers and the shop owners who cater to them.

 

Of course, keying in credit card numbers over the phone has always been possible, and, with the advent of the online payment gateway, embedding that technology in a company’s website so consumers could purchase products directly from the site probably wasn’t much of a stretch—in hindsight, of course.  The idea is instead of looking on a company’s website and calling that company to order a product, you can now save a step and simply click, type a few things, and…you’re done.  And, you don’t have to call, wait for a human to pick up the phone, and deal with bad phone connections—none of that.  (The same goes for third party mobile wallets like PayPal.)

Likewise, pulling out a credit card and swiping has always been possible, but, having everything stored on a smart device makes for a world of new possibilities, like the “smart” choosing of the most beneficial rewards program for a particular purchase, and, not having to worry about losing credit cards because they’re all stored on your phone.  Furthermore, the possibility of integrating digital wallets with other smart apps (and hell, just being able to access everything on the same device!) has the potential to make life easier in ways we haven’t even considered yet.

Bottom line: e- and m-payments make life quite a bit easier.

eCommerce and mobile payments are substantially more secure than you might think

I can’t prove this either, but I would wager that both e- and m-payments wouldn’t be anywhere near as successful as they are (even with mobile wallets in such a nascent stage) if their extra security features weren’t working very effectively.  I’m talking about tokenization, of course.

Tokenization breaks credit card information into disconnected bunches of random numbers that can only be unscrambled with a special formula.  If a hacker ever breaks into a server that utilizes tokenization, the credit card numbers he comes across would be completely unusable.  Ironically, it’s the e- and m-payments’ perceived lack of security that prevents them from advancing even more quickly—at least in today’s age.  Tokenization makes credit card data virtually indecipherable to wrongdoers, but older generations who are used to things done a certain way might not choose to believe it.  (And, I’m not bagging on older or more stubborn folks here.  Point in case: I refuse to buy one of those newer TVs with the higher frame (refresh) rates because I’m not used to how the picture looks, and I don’t particularly like it!  I don’t give a damn if the quality’s better.  It just doesn’t seem like a TV anymore with that kind of picture.  And, by the way, I just learned you can turn that feature on and off.  Still don’t trust it…yet.)  I don’t doubt at all that as new generations are indoctrinated into the e- and m-payments mentality, they will embrace it easily, without a second thought—unlike folks who have experienced something different in their lives.

The net effect of these new technologies

We’re living in some pretty pivotal times right now, and, barring the world ending unexpectedly, these payment technologies will soon become the norm—or, even more the norm than they are now.  PayPal, which is already the standard on so many websites, will be even more prevalent, as well as other, similar services like Amazon Payments.  And, as more companies begin to utilize tokenization—on its own or as a byproduct of adopting Apple Pay or something similar for in-store purchases—transactions will get even easier for consumers to perform on their own, without the help of a salesperson.  And, they’ll be safer than ever before.  So, essentially, everything is going to be easier and safer.  That's how technology tends to work.  Eventually.

I know this is a bit of a departure from my normal doom and gloom stance on most aspects of credit card processing, but developers really nailed these e- and m- ideas.  The potential for safer transactions for all merchants is simply enormous, as is the potential for integrating payments into other apps and aspects of life with digital wallets.  This is truly an exciting time…and, I’m really curious to see what happens next on the payments front.

COST Versus PRICE in Payment Processing: They're Not Interchangeable

(or, a brief sojourn through time is the only way I can make this point)

Why, yes, I did borrow this image from 1995.

Today I want to talk about the differences between costs and price and how those two factors stack up against each other in credit card processing.  What does that even mean?  It’s quite simple, really, but I can explain it better with an analogy than I can with algebra.  Let’s pretend we’re at a furniture store for a minute…

At IKEA

I can feel you cringing.  Hey, I’m on a budget here!  We’ll let you shop at Restoration Hardware in a minute.  Anyway, we’re here at IKEA and I’m looking at a chest of drawers.  I see something that looks pretty decent, does everything I want it to do, and it’s only $200.  Before you ask, yes, I’ve shopped around a little bit and this is the best deal I’ve found, so I’m pretty proud of myself.  I think I’m going to have to put it together myself, but I’ll survive.  After doing a little work, I’ll throw this in my room where it will proudly store all of my clothes.

Now, let’s turn the clock ahead five years.  I know I didn’t tell you we were getting into a time machine, but just ride it out; I swear it’ll be a good experience.

Five years later…

Don't worry, these are stunt doubles, not even from IKEA.

Here we are, back at my house, and my dresser from IKEA has moved around town a few times.  I’ve used it endlessly, and it’s operated tirelessly for me—well, as tirelessly as it could.  It’s quite banged up, and the cheap black finish is scratching off.  Also, I didn’t tell you this, but two of the drawers have never quite closed correctly, so the paint is really coming off around those edges because of all the excess friction.  If we take a step back, this thing looks beaten.  It’s a little embarrassing, actually, and if I have company over I might have to cover it up just to save face.  I guess it’s just the way things are, though.

Now, let’s go back to the present moment and, instead of going to IKEA, let’s go across the parking lot to Restoration Hardware like you wanted in the first place.

At Restoration Hardware

Now, we’re looking at some nice pieces of furniture, and we happen upon a new wooden dresser, and…wow, it looks classy as hell.  Really nice veneer on the wood, really straight, and of course all the drawers are perfectly flush with the body—and, I can tell this because the thing’s already put together!  I hold my breath and glance at the price placard and my eyes bulge—it’s $600.  You assure me it’s a good deal, though, because—well, look at the quality!  You’ll have this thing forever, you assure me.  I fret for a minute but ultimately succumb to peer pressure, and you warmly reassure me I made a really smart purchase.  I feel a little better as I watch the complimentary shipping service guys wrap the chest up and load it into their truck.  The thing’s going to make my room look awesome…

Now, back to the time machine, obviously.

Five years later…

Yes, it is.

Well, when I first got the dresser into my room, it was pretty fantastic, and I guess it shouldn’t surprise you that, for the price, it’s held up incredibly well.  I’ve had to move it a couple of times, but it doesn’t have anything but superficial scratches on it.  All the hinges still work well, and none of the finish is flaking off, due in part to the fact that there isn’t any excess friction from shoddy workmanship (my own in an alternate scenario!).  I haven’t even thought about replacing it—and, why would I?  It’s an awesome piece of furniture, and it perfectly complements my room.

Okay, one more trip back to the present.  This is where we heroically apply what we’ve learned to the present moment to change the future for the better.  God, I should be a screenwriter.  Anyway, I’ve learned that buying furniture isn’t something to sneeze at—it’s more of an investment for the future.  My RH dresser hasn’t crapped out on me once, and I don’t expect it to unless my house burns down.  I’m in pretty good shape.

I haven’t mentioned credit card processing ONCE yet

And here you thought you were going to fall asleep at your desk.  Not so this time!  But, like all good things, this one must come to an end too.  The reason I told such a flowery story is because I like doing stuff like that, but, the story’s meaning really can be applied to picking a suitable payment processor.  So many times—in fact, the vast majority of times—merchants in need of payment processing go shopping at IKEA.  It’s the only place they ever shop, and, if the folks over there or any other big bin store come out with a better-priced chest of drawers or a lamp, merchants are sure to at least give it a once-over and probably even take it home because, gosh, it’s just so cheap.  Processors might cold-call you and remind you you can come to Restoration Hardware and you’ll have an attentive salesman there who isn’t bogged down with putting inventory away, who can tell you exactly how their special couches are stitched, the thread count of the sheets on their display beds, and the kinds of wood that go into their armoires.  “But,” a merchant might counter, “What are your rates?”  The sales guy on the phone answers, and the number he quotes makes the merchant a little flip.  “Don’t even bother me with that nonsense,” the merchant might say, and hang up the phone immediately.  “Serves him right for trying to swindle me out of my money,” the merchant says to himself.

The thing the merchant does not realize, and what you now do realize by now, is that choosing the choosing the right vendor for your company, much like buying furniture, is a solution for now and an investment for the future.  Not next year, not something to tide you over till you’re out of college, but…the future.  When you shop for payment processing, you’re not just shopping for the lowest price or lowest rates: You’re shopping for low costs, a solid company behind the services offered, a good pricing plan for those costs, technology that fits your business goals, a more-than-adequate support team: a solution that can grow with your business.  You may very well end up paying a little more than you would have, but your choice will pay back your business in spades.  And, you might even take pride in your choice like you'd take pride in buying a piece of furniture that really improves your room instead of simply serving a purpose until the next plebeian piece of furniture comes along.

Jeremy

Disclaimer: I shop at IKEA.  I take good care of my furniture but I know very well I'll have to replace it if I ever share my space with anyone else permanently.  That's analogous to, say, accepting over $30,000 monthly in credit card payments.

MOTO Credit Card Processing is Dead

(or, 3 tips to make it in MOTO business today)

Well, you heard me.  MOTO credit card processing as it was known at its inception is dead.  What comes to mind when one pictures MOTO credit card processing?  A businessperson typing a card number into a credit card terminal, right?  The technology in those terminals is approaching the age of dirt.  And, even more importantly--because some of us enjoy collecting classic items--that old technology is responsible for 85% of the card-not-present downgrades on monthly processing statements and 75% of the shoddy reports generated by harried accounting staff members.

Okay, so I’m totally lying about the numbers.  The point—that transactions are downgraded terribly and reporting tools are nonexistent with physical terminals—is absolutely valid.  If there were a way to measure shoddiness of reports as a function of harriedness of accounting staff from the general crappiness of the quality of life due to the oldness of your physical terminal, there would probably be a positive correlation.

MOTO credit card processing as you probably know it has outlived its expiration date.  If you know it as something else than what I’ve described, be happy you didn’t have to live through the golden (expensive, stressful) years.  You don’t have to take notes today.  However, if you have no idea what could ever replace your credit card terminals in the scheme of your business, you’ve arrived at the right place.  It’s time to get down and dirty.

MOTO credit card processing tips

1.  With the internet all things are possible (especially improved payment technology)

The internet has improved human life tremendously—or, rather, it’s sped everything up and made it easier to pass information around.  How does this apply to MOTO credit card processing?  Well, nowadays, you have options other than the physical terminals you might be using.  Take, for example, the virtual terminal:

If you're not familiar, it'll look something like this.  Pretty nice UI, and intuitive reporting tools.

Important to know about your virtual gateway:

• You can access your online gateway from anywhere with an internet connection, not just your office.
• Most virtual gateways are equipped with built-in searching and reporting tools, which are absolutely invaluable for copy requests, other audits, and simply reporting things at the end of the day or month.
• Some virtual gateways can be equipped to integrate to your accounting system (like QuickBooks, or wherever else you might create and reconcile invoices), which brings about a whole host of other benefits.  There’s no better way to catapult your business into the 21^st century than with a payment integration—and, your accounting staff will agree.

2. You can utilize payment channels other than mail and telephone

I know MOTO stands for Mail Order/Telephone Order, but in the past decades, that business model has expanded to include online orders, either via email or shopping cart.  Strongly consider whether or not your customers would benefit from the addition of an email payment portal, or a web shopping cart.  Maybe your website isn’t much to look at, or—good heavens—maybe you don’t even have a website.  Whereas payment integration can help almost everyone, adding a web shopping channel might not be for you if you have a well-established client base and you aren’t worried about not attracting Joe Average consumers.  But…I would wager that this idea helps more businesses than it hurts.  I mean, adding visibility and more payment methods can never hurt.

Shopping carts give you access to SO much useful data!  Makes me want to start my own business.

Important to know about an online payment method for your customers:

• This is the age of automation.  Usually, if people have the opportunity to use an email portal or shopping cart for payment, they will.  That means orders come to you without you having to answer the phone.  And, that saves time.
• You can automatically import your online payment data to your virtual gateway with information from other payment channels (like telephone) and make your reporting even easier.
• Some shopping carts (like Magento) are designed to lower the base costs of accepting certain credit cards for payment.  Depending on your potential for online orders, this could be a great windfall.

3. The importance of PCI compliance can’t be overstated, so use a compliant solution

In light of the mainstream data breaches you've undoubtedly heard or read about, this point can't be stressed enough.  Using a virtual gateway or an integrated processing solution has the potential to significantly increase your data security, and decrease your chance of becoming the next mainstream news story.

Important to know about PCI compliance:

• It’s easy to believe you’re invulnerable to hacks since you use a physical terminal—but, it simply isn’t true.  Hacking into phone lines isn’t terribly difficult; an entire subculture of phreakers could attest to that in the 1980s. 
• Using a virtual terminal secures your data, and, using a tokenized data solution makes the data even safer than with a conventional virtual terminal.
• Solutions like these are in high demand given the past few years—and, contrary to what you might believe, these solutions are usually available at no additional cost, as modern processors have adopted PCI compliance as a standard.

The beginning of something great

When something dies, something invariably takes its place, and we’re witnessing the implementation of some really cool payment processing options.  (I don't know about you, but I really like it when I can get a machine or a computer program to do instantly the work I would have spent 30 minutes doing, all while offering me a higher standard of data protection.)  Request a virtual terminal demo from the merchant services provider of your choice, and talk to several companies about what new MOTO credit card processing options will do for you.  I think if you give these options a chance, you’ll be pleasantly surprised at how much your business is improved.

Until next time,

Jeremy

What on earth is EMV?

He's ready to learn.  Let's get moving.

These days, EMV chips are all the rage in Europe, and, with their official USA ETA in October 2015, they’re coming on over to stay in the United States as well.  You might have an EMV card now, or maybe you’ve seen a few of your customers present them to you for payment.  But, aside from looking high-tech and probably having to do with security, just what’s going on with these EMV chips?  Here are five quick details to take with you.

1.   EMV chips don’t significantly change how cards are used, but they really only work for card-present transactions

As the EMV chip is a physical feature of a card, it interacts with another physical object for its security: an EMV chip reader.  For card-not-present transactions, all information is transmitted manually over a phone line or the internet, so the chip’s security won’t have any use at all in those situations.  Aside from the physical aspect of having EMV chips, newer credit cards look the same as their older counterparts.  (Eventually, the magnetic stripe on EMV cards will fall out of use as businesses update their hardware, as all pertinent transaction information can be gathered through an EMV chip anyway.)

2.   The EMV shift will cost businesses and banks a good deal to implement

Replacing a couple of credit card terminals might be annoying, but it isn’t terribly expensive–I’ve seen EMV-equipped terminals for $300, give or take about $50.  But, what if you own a retail store with four credit card terminals?  What if you operate an independent grocery store and you need to replace ten?  Considering those possibilities, it’s no wonder many business owners are trying to shelve their updates for as long as possible.  And, it isn’t just retail businesses that are feeling the pain.  Banks have their work cut out for them, what with the nearly billion older credit cards in circulation now.  And, let’s not forget their ATMS, which will all have to be equipped to read new EMV debit cards.

3.   October 2015 is the deadline to update your card-reading hardware, but you probably won’t see overall compliance until much later

October 2015 marks the liability shift—the point at which businesses become responsible for fraudulent charges resulting from EMV-equipped credit cards used with standard mag stripe-reading terminals.  Some businesses will be slow to adapt to the new rules, however dire the punishment for not doing so, simply because of the expense of updating hardware.  You may very well have $1200 lying around to spend on four new EMV terminals, but, you may not want to part with it because you don’t see the need—not yet, anyway, because you haven’t been hit by fraud… It’s a waiting game, though.

4.   EMV chips do prevent fraud nicely, but it’s still possible to pull a fast one on card-issuing banks

In October of this year, a fraudster team in Brazil reportedly captured credit card data from a real EMV-equipped credit card, and then manipulated information like credit card numbers, issuing banks, and acquirer IDs, to fabricate other transactions on the fly that looked quite real with the addition the captured EMV information.  According to this article, the fraudsters played off the notion that banks’ fraud controls would be looser for EMV-signed transactions—and, indeed, they were, as banks automatically approved the charges due to the presence of the additional EMV information, however false it was.  These so-called replay attacks aren’t so common, but can occur from time to time if someone’s head is turned away at the wrong time.

5.   There are two different potential EMV systems to put in play, each with distinct advantages and disadvantages

When businesses choose to upgrade to EMV technology, they will have another choice to make: whether to use a chip-and-PIN system or a chip-and-signature system.  Chip-and-PIN systems are the inherently more secure option because their requiring a PIN (verified by the EMV chip) with every transaction makes it much, much harder for thieves to use a card fraudulently at that kind of credit card terminal.  As expected, a chip-and-PIN system requires the use of a special PIN pad, which costs businesses money to use.  Bearing that in mind, there is another, somewhat less secure method businesses can use to secure their EMV transactions: the chip-and-signature system.  The major factor chip-and-signature systems bring to the table is their lack of a PIN feature.  Signatures add a small veil of security, much like signatures for purchases with conventional credit cards, but the problem is signatures can always be replicated, and, as anyone who’s ever used one of those battered electronic styli and pads at a grocery store can attest, it really doesn’t matter what the hell you sign.  Predictably, businesses tight on cash will opt for the less secure chip-and-signature method in the interest of cutting costs—until they’re affected by fraud themselves.  So it goes!

By now you understand I’m full of it; brevity isn’t my strong suit

Those weren’t fast facts at all, but, hopefully they were substantial facts and you come away from this ready to win some bar bets.  In all seriousness (I know!  In this blog?!), EMV is a big deal because it’s the first real update to the credit card itself since its (mainstream) inception in the ‘70s.  Cards are going to look a little different, and business owners and banks will have to front the cost of these upgrades; that’s just the system we’ve built.  Security will likely be much better in the future, though, and we won’t have as many of these nasty fraud stories to talk about.

Cheers,

Jeremy

Understanding Advertised Processing Rates!

(Why total processing cost is (usually) not equal to the percentage you’re promised.)

Short answer: Because there’s much more that goes into your total price than a rate.  If you ask for a rate, you’ll get a rate, sure.  But that’s like asking a car dealership how much an engine costs and expecting to walk out with a whole car after paying.  Unfortunately, the rate can be deceptively small or completely made up.  How often do you see stuff like this?

It sounds fantastic, and it would be if it were possible 100% of the time without National Bank Card, salesmen that they are, losing money on processing costs.  The reality is it ain’t.

Long answer: Your total costs are comprised of much more than a single percentage—unless you’re using a flat rate pricing program, but we can get into that later.  Unfortunately for you, single percentages sell a lot better than a block of fine print, and, with those nifty contracts that MSPs dole out like candy, it’s pretty easy for them to get away with promising you something lovely and sweet and then delivering something slightly sour. 

Single advertised percentages can mean a few different things, but hardly ever the full price.  A single percentage can refer to:

• The interchange (base) cost to accept a credit card.  It’s not likely a processor would come out and tell you this, not only because interchange isn’t in everyone’s vocabulary (“You mean the freeway junction?”) so it’s easier to avoid talking about it, but because interchange costs fluctuate rapidly depending on what credit cards your customers use.  For a full breakdown, you can click here.  Let’s just say it doesn’t read like The Catcher in the Rye, though.  (Brief synopsis: Consumer credit cards and debit cards aren’t so expensive.  Business-type credit cards and government purchasing cards are.)

• The total cost to accept credit cards.  This is more likely what a processor wants to convey when advertising “Card Processing under 1%.”  However, as we can see by skimming over that Interchange Guide above, even interchange costs are rarely below 1%.  So, do we really expect National Bank Card (or any other processor, for that matter) to eat cost on your transactions?  Good heavens, no.  We’ll see some companies like Sage Payment Solutions advertising 1.85% on “qualified” transaction costs, too.  While 1.85% is a tad more realistic than <1%, it still doesn’t account for a big number of card types in that interchange guide—anything over 1.85%.  What happens if you don’t get that 1.85%?  SPS can just say your transactions didn’t qualify.  Better luck next time!  Here is the picture as it appeared December 1^st, 2014:

(FYI, the folks at QuickBooks Payments love to do this too.  Remember, though: hate the game, not the player.  Both Sage Payment Solutions and Intuit Merchant Services are using a pricing formula that's been tried and proven over years: the fewer numbers you show someone, the better off everyone is.)

• The markup on your transactions.  This is usually what a given processor is trying to convey with an ad like that of our friends at National Bank Card, much as they may not want you to realize that.  A markup of 1% on top of an interchange cost is no small chunk of change, especially as your processing volume rises.  (That’s why it’s more common for smaller companies to have higher markups and larger companies to have smaller ones.  Somewhere down the line, someone realized that 1% of $3 million per month was $30,000 and that their company was helping to finance someone’s country house and yacht every month.)  “Under 1%” is of course better than 1%, but how much better?  We can’t tell, of course.  As long as they keep you below a 1% markup, though, they’ve kept their promise.  Get ready for a nice 0.95%!

A note on flat rate pricing

The only situation where I would trust a processor reading me one number over the phone or on the internet would be after they've thoroughly analyzed the trends for credit card usage among my customers--that is, they'd have to tell me what kinds of card types are coming in and how they arrived at that single cost.  For example, if I'm in the B2B realm, accepting a good number of corporate cards every month, it wouldn't be out of the question for someone to quote me a flat rate of 3%.  It's a little high, yes, but it covers the real expenses of the credit cards I accept.  You'll never see those kinda of quotes advertised on "credit card processing" Googles, though, because everyone's already advertising <1%.

Back to business...

Those are your options when you see ads like the one I mentioned.  They’re everywhere, and you’ll get a rotation of them whenever you Google “credit card processing.”  And, going back to the short answer, the reason they’re so popular is they’re a lot easier to read and process than a mass of fine print  And, since this explanation wasn’t written in size 6 font, I hope it helped you a little more than a big ol’ text block would have.

Cheers,

Jeremy

2014: the year of MEGA breaches! Who was the biggest turkey?!

Wanna Know What’s NOT Free? A FREE Terminal

Free terminal for you?  Or, free overhead for your processor?

Every now and then, I still hear stories of merchants who get duped into signing agreements for eternally long merchant services contracts, unresponsive service, and–my favorite–credit card terminal leases.  Terminal lease agreements are really something to behold because we’re talking about a very inexpensive piece of machinery here–$200, maybe $300 for a really nice, sleek-looking one.  Right away, you know that if you plan to stay in business longer than 1-2 years, paying $15 per month doesn’t make any sense.  And that’s just a small aspect of this terminal business. As humans, we make bad financial decisions when circumstances aren’t perfect, and some salespeople unfortunately make a killing off getting you to make a bad choice under pressure.  And, while we’re on the subject of bad choices…have you heard the expression “free terminal” before now?

The truth about free terminals…

It’s important to think about why a merchant services provider would offer free machinery to its prospective clients.  It’s not the same as something intangible, like a cloud-based software package or virtual gateway; while software developers put in the time and expenses into developing their product, there comes a time when the developing company will break even–or, simply offer their software product for free as a benefit.  With physical card readers, however, processors do not stand to benefit in the slightest by offering free terminals, especially not as a way of enticing merchants into signing up.  It’s for this reason that so, so, so much of the time, you’ll find that free terminals are accompanied by a thick merchant services contract.  Usually for 36 months.  And, it probably stipulates that if you decide to end your agreement before 36 months elapse, you pay for the value of about ten of those lousy terminals or the fees for your highest-volume month multiplied by the number of months left on your agreement, whichever is worse.  In fact, I’ve never heard of a company that didn’t offer free terminals without some sort of string attached to the offer.  Terminals are tangible items, so they always carry a cost.  Processors aren’t total goof-offs–they usually find a way to pass the charge onto you.  If you choose to fulfill your contract, you might not see the ugly side of the agreement–and, you may really get free machinery–but, brace yourself if you anticipate batting an eyelash at that contract.

The solution to ostensibly free terminals?  Try a guaranteed non-free one, or don’t try one at all.

I try to play devil’s advocate whenever I can, so I don’t want to tell you to avoid free terminal offers at all costs.  If you’ve found a deal that really is wonderful and a merchant services provider that is either that loyal to you or that scared to lose your business that he offers you free machinery–and, if machinery is the best way for you to accept your card payments–I say go for it.  Everything else aside, wholesome relationships are hard to find, especially in business.  Especially in credit card processing.

However, if you’re the least bit uncertain, get away from that free terminal before you put pen to paper.  Go online and search for the brand of terminal you like, fork over the $250, and get your terminal in the mail next week.  Never pay for a machine again.  Refuse to do business with anyone who makes you purchase or lease their own machinery instead of letting you use your own.

And, furthermore, if you’re feeling innovative, consider that using a physical terminal might not be the best processing solution for your business at all.  Online virtual terminals don’t take up space on your desk and are designed to provide reporting and searching tools to businesses who need that sort of functionality.  They generally don’t cost any more than a physical terminal to use, and, in some cases, they can give businesses a lower base cost on business-type credit cards.  Depending on your dollar volume of transactions per month, you could save a substantial amount of money by conducting business that way instead of through a machine.  You might consider choosing a merchant services provider that offers a solution that really fits your business.

Hopefully you learned something interesting from this (or you were at least entertained)!  Of course, it’s one thing to be told something by someone you don’t know and quite another to have experienced it firsthand, but, you know what I always say… If you don’t believe me, go out and try it and tell me how it goes.  Hopefully you don’t subject yourself to one of those free gags and I see you before 36 months, though 

Take care,

Jeremy