The Merchant Processing Guru Tip#16: Standalone credit card processing terminals and PCI Compliance
I am hearing of cases where a processor is forcing merchants to upgrade their terminal because their terminal is not PCI compliant. Standalone credit card processing terminals are not affected like PC based processing solutions as standalone terminals do not store credit card numbers. However if you run debit cards through a terminal under the pin-based debit option and you are using your terminals internal pin-pad, that is the portion that may not be PCI compliant. There is a very easy and simple way of getting around that issue, just get an external pin-pad from your processor to plug in to your terminal that is PCI compliant. A pin pad needs to be Triple-DES encrypted (3DES) as these pin-pads store the pin numbers that are entered into them by your customers.
This brings me to the issue of equipment altogether. There is absolutely no reason to lease or even purchase credit card processing terminals, for the most part, any longer. Processing equipment is very affordable these days, many processors have terminal placement programs for $10 – $20 per month where they will replace it if it breaks and often times they include supplies with this program or you can normally purchase your own dial-up terminal for as little as $250 – $300 or $350 – $450 for a Dual Comm (Ethernet) terminal. I still find cases where merchants are paying between $50.00 & $150.00 a month on a lease for 48 months which is robbery on behalf of the company that set them up, as far as I am concerned. The merchant ends up paying between $2,400 to $7,200 for a piece of equipment that may have cost $250 to $350. The worst thing about this type of lease is that they are “Ironclad”, there is no way to break them. You are stuck with paying the entire amount you owe, including a buyout at the end of the lease which is typically 10-15% of the original value of the equipment. Leases may have had their place several years ago, when done properly & they can still be used in some cases as long as they are beneficial to you and on equipment that is just too expensive to purchase up front, but not for just a simple counter top terminal, that’s ridiculous.
To avoid ever getting into a lease like this again or paying outrageous fees for processing your credit cards, consider this. It has been my goal the past 6 years to always provide those who choose to work with me, the most cost effective solution for them and their business. I believe that in doing so I will build a long lasting business relationship with each and every person I work with. If you believe this is something you would like to have in your relationship with a credit card processing provider then get in touch with me today and I will show you how much I value your business.