This means the merchant is processing 600 transactions per month. Let’s say you have a merchant processing $30,000 per month in credit card volume with an average ticket of $50.
CREDIT CARD TERMINAL LEASING COMPANY FREE
In the merchant services industry, most processors have minimum pricing requirements in order to offer a free terminal.
Then the customers choose the lease option because it is a lower investment for them in the short run and a much better investment over the long run. So, What is a “Good Lease?” I define a good lease as any lease where the customer is made aware of the minimum pricing constraints in order to offer a free terminal. The merchant would pay $29.95 to the leasing company for 48 months, at the end of which he or she would own the terminal after a final payment of some kind.Įxample: $29.95 / 0.0296 = $1,011 – $300 Terminal Cost = $711 * 85% split (15% to ISO) = $605 Lease Funding to You
CREDIT CARD TERMINAL LEASING COMPANY ISO
(This is called “Funding the Lease.”) The factor rate is based on the merchant’s credit score which is rated from “E” (Lowest) to “A+” (Highest.) On this particular 48 month lease, the lease factor would probably range from: E = 0.0429 to A+ = 0.0296 Once the lease has been “Verbalized” (the merchant confirms that the terminal is installed and operational and agrees to the terms of the lease), you would receive $29.95 divided by the factor rate, less the cost of the terminal and any cut the ISO or Processor takes into your bank account. Once the terminal is installed, they will credit your bank account with a “lease factor rate” on the lease. You have the merchant fill out the standard application and then a lease application must also be filled out. Let’s say you as an agent go out and sell a lease. How does a lease work? A lease is a very interesting financing tool. Let’s jump in and explore this important topic. I am a big fan of free terminal programs, but I also believe leasing has its place. However, a lease can be a great way to increase your commissions while also providing a lower cost, long term investment for the merchant if you structure the lease and merchant services correctly. Selling leases on credit card terminals often has a negative connotation because of the sales people who try and rip off the merchant by selling an overpriced lease, or promise savings to justify the lease payment that will never actually happen.
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