Do You Really Want the Cheapest Terminal?

If you don’t care about long term PAIN and just wanted the short-term ‘gain’ or savings, then DON’T READ THIS POST about payment processing!

Just wanted to write about this topic because the last few weeks probably near a dozen people who I quoted have said that the quote I sent was $5more/mth  @ $36.99, or $100-$150 more @ $999 for the buy-outright price of a Dial-Up Debit & Credit Card Terminal compared to other companies that have quoted them.

Let’s run through some scenarios and see what makes sense, because you can’t compare apples to oranges.  First of all SERVICE is more important than anything because debit & credit card processing WILL BE A NIGHTMARE without excellent service

We have about 4 dozen testimonials on this site with a few dozen Business Owners who said that they will send theirs, (but haven’t yet for whatever reason).  I don’t see that ANYWHERE in Canada for this industry except for one other company’s (but this is one of my best friends)!  I do see a lot of complaint websites popping up about unethical companies preying on Business Owners.

You go to Wal-Mart to buy things that are disposable that you use everyday- no service required (i.e. microwaves, dvd players and vacumn cleaners).  Debit & Credit Card Acceptance for your business is vital and one of the top 5 things needed for you to stay in business, so don’t be fooled by the lowest price.

The companies that promise cheap terminals are only able to do this by:

  1. providing used/ refurbished terminals that will have a lot of breakdowns and therefore downtime for you as a business.  What happens when it breaks down every two weeks and how much will that cost you in the end?
  2. will not have a helpdesk or proper warranty.  Let’s say that you get a terminal for $750, but the wholesale price for a terminal is in the $400-$500 range.   After programming your terminal, pinpad and shipping out to you, let’s say the Point of Sale Company keep $150.  This is not including staff, building and other business expenses.  My point is that- will they send you another terminal if this one breaks?  Do the math… would you?  BTW: call their helpdesk and test the wait time.
  3. there is something that you are missing or they are not telling you like monthly debit & credit minimums that you have to hit or you get charged extra.  Other fees like statement, admin, etc., etc.  BTW: quick way to check if your quote is no good is that you only get 3-4 fees listed, or you only get the fees verbally, or it seems super cheap.

Most Point of Sale Companies have similiar expenses relative to their sales. If that is so, then the only way they are getting you a cheaper is by charging more fees after you’re on board with them, or by not fulfilling their service and warranty promises because they can’t afford to, or they are eating the costs and happy with decreased gross margins.  If they are doing the latter, then they will go out of business soon, and it will cost you in the end in time, money and frustration.


The reason why if they do the latter and will go out of business is because they mistakenly believe that what they lose in gross margin, they can make up in increased sales volume.   This is a business myth taught by broke teachers in highschools, colleges and universities across North America who have never owned a business before- discount and make up in volume.

Example: If you have a 35% gross margin (before counting fixed and variable costs of your total expenses), and you lower your prices by 10%, then you have to almost double your sales to make the same money.  If you have a 25% gross margin, then you will have to triple your sales.  Not to mention that even if you could have that much more sales (that’s a huge IF), that you will tax your current infrustrature to death in efforts, cost and ability to provide service because you will have to double or triple your business expenses to keep up with the increased sales, unless you were only running your business on 1/3 to half of it’s capacity before.]

Remember: You always get what you pay for. To be a smart business person you save where you can do without frills, but for the important things you get competitive pricing, but focus on service.


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