Is it time to update your credit card terminals? If you’re still swiping cards on your clunky old dinosaur of a terminal it might be time to think about an upgrade. I’m sure the old guy still gets the job done, but at what cost? There are many downsides to sticking with old equipment, some real, some potential, and some perceived. Security is all of those things. And it is one of the most important reasons to upgrade your credit card terminals. But, most people don’t want to bother with replacing things until they have to. Well if you’re operating with terminals that are not EMV compliant, that time has come.
Some businesses, although they are already EMV compliant, are changing the way they conduct daily business. Consumers are changing their shopping and buying habits in ways that are likely to become the norm as we move into the future. These changes may require businesses to invest in new or different equipment.
There are a few basic Dos and Don’ts when looking to upgrade your credit card terminals.
Every business’s needs are different. On top of that, there is a multitude of configurations for accepting payments depending on when, where, and how a business operates. But there are a few basic Dos and Don’ts of upgrading to new credit card terminals that apply to all businesses. Today we’ll touch on 3 things to keep in mind and 3 things you should not get roped into when considering your upgrade.
DO decide to upgrade your credit card terminals now if you are not yet EMV compliant.
Security and compliance are the two most important reasons to become compliant with the new EMV standards. EMV refers to the set of credit card processing security standards mandated by the payment industry. The fact of the matter is that swipe cards and technology are much less secure than EMV technology and chip cards. If you are still only using a swipe terminal to accept credit cards you are opening yourself and your customer up to fraud.
Businesses who are not EMV compliant assume liability for fraudulent transactions. The EMV liability shift, effective Oct 1, 2015. This meant that all liability for fraudulent transactions from using a swipe terminal with an EMV enabled card moved from the card issuer to the merchant. There has been a significant reduction in fraud due to EMV technology.
Consumers are also very concerned about falling victim to fraud. If they have the perception that your business isn’t keeping up with the latest security measures they won’t feel safe. And if customers don’t feel safe, they may be tempted to go elsewhere.
DO consider the customer’s needs.
The goal of every merchant should be to make the payment portion of the shopping experience as easy and as pleasurable as possible. In the business, we have a term for this: frictionless. Because people don’t usually relate to giving their money away with pleasure. But, they do want the experience to be quick and painless.
Consumers like convenience. They like to buy from businesses that keep up with technology that matches their own. If they want to pay with their mobile wallet or smartwatch and you cannot accommodate they’ll tend to gravitate to places that can.
When you are comparing payment terminals, keep the customer’s experience in mind too while you consider functions. It needs to be quick, simple, safe, and accept any type of payment method they want to use.
DO determine what type of terminal you need, if any at all.
Here you will have to carefully weigh functionality against the cost. You don’t want to get googly-eyed over a bunch of features you don’t need, but it may not behoove you to just go with the cheapest solution you can find either. With everything from the most limited mobile card reader all the way up to a feature-rich all in one POS and terminal, there is a lot to choose form. You’ll want to consider how you conduct most of your business, the features that will enhance frictionless payments, and choose the solution that best fits your needs.
Below are a few of the most popular options for accepting payments.
Mobile card reader- works with your phone and acts as your terminal, sometimes referred to as mPOS. This is a small device that together with a corresponding payment app on your phone you can accept payments without a traditional terminal. You’ll have to pay extra to upgrade to an EMV compliant and blue-tooth enabled device. But, considering the overall affordability, they are still much less than a wireless terminal. These will allow you to accept payments anywhere you are, but that’s about it. They’re equipped with only the most basic functions needed to accept a payment. This is a great option for someone who doesn’t process a lot in sales volume. Or if you only need to be able to accept payment in the field once in a while.
Physical retail terminal- this is the most common stand-alone terminal. Most new EMV terminals are equipped with NFC technology convenience for the customer. There are two kinds of terminals: sign on receipt and sign on-screen. This is like what you come across at retail outlets and grocery stores and they can integrate with almost any type of POS system.
WiFi or wireless terminal- connect to your network either over your internet connection or cellular network. These can also have sing on-screen functionality. This is a great option for businesses that need to carry the terminal out to the customer such as restaurants that want customers to pay at the table. They also work well for mobile businesses and delivery drivers who need to accept payments while out in the field.
Virtual terminal-for card-not-present transactions. Virtual terminals are software applications for manually entering payment information on a computer. These work well for businesses that take orders over the phone or in situations where the customer is not present to physically dip their credit card. A virtual terminal can be supplied to you by your merchant service provider as a feature of your merchant account for accepting payments.
All-in-one -fully integrated POS system with a payment terminal built into the hardware. This option combines all of your POS features and credit card terminal functionality into one nice little package. This option is perfect for businesses that have multiple locations and want to integrate functions such as inventory management with sales.
Now that you have a good idea of what type of functionality is best for your business, it’s time to take the leap! But before you do, there are few things to keep in mind so you don’t regret your purchase.
DON’T lease, under any circumstances.
Don’t give in to pressure from salesmen just looking to make a buck. Do the math. It may seem inexpensive to lease a terminal but when you do the math you’ll quickly find that you’re grossly overpaying for the machine. When you’re ready to upgrade your credit card terminals, it’s best to buy them. Leases are generally written with a long term, about 4 years is the norm, and are impossible to get out of. They’re meant to force you to keep your credit card processing with them, even if you are unhappy with your rates or service. Plus, they are never really “paid off”. In order to keep the terminal once the lease is done, you will either have to buy it then or continue the lease payment indefinitely. With a lease in place, it’s harder to upgrade to a new terminal as technology changes when you are stuck in a lease.
Here’s a conservative example to drive home the point: $30/mo lease for 36 months = $1080… Plus cost to buy the terminal if you want to keep it. You would cover the cost of most terminals within the first year.
When you’re ready to upgrade your credit card terminals it really is best to buy them outright. Besides, if your processor is worth his salt, he won’t even offer you a lease option for your equipment.
DON’T fall for the free terminal
Sometimes a processor will tempt you with an offer for a free terminal. Unfortunately, nothing is really ever free. There are many hidden downsides to these offers. Oftentimes, these terminals must be given back if you change processors. And, if you don’t have to give it back, most of the time they are not reprogrammable. So, you won’t be able to use them with your new processing account anyway.
What if you need more than one terminal? You will have to buy them. They will only usually give you one “free” terminal with your merchant account.
Free terminals tend to come with a couple of buddies called, higher rates and long contracts. Processors will often charge you higher rates in order to provide you a “free” terminal. Higher rates end up costing you much more over time than if you had just paid for the terminal. If you want to change processors you will have to pay a cancellation fee.
Honestly, you should not be expected to sign a term contract when opening a merchant account. IF your processor wants you to sign a contract, regardless of a free terminal, you should keep looking for a better merchant service provider.
DON’T don’t buy a processor branded terminal.
These terminals are bought in bulk directly from the manufacturer and branded for the processor purchasing them. They are not reprogrammable, meaning if you switch processors you are going to have to buy a new one. The manufacturer will embed a security code into the programming that won’t allow them to be reprogrammed. This is generally done specifically to deter merchants from switching to a new processor. If a merchant thinks they are going to have to spend more money on another new terminal they are less likely to leave. Again, this is not good for your business.
Turn credit card processing into a pleasurable experience- cha-ching!
Credit card processing, and accepting payments in general, is a necessary part of every successful business. You need to have control over the options you choose and the costs that affect your bottom line. For this reason, your merchant service provider needs to be as invested in your success as you are. Partner with a merchant service provider who strives to support your business, offer the solutions that are right for you and gives you the fair rates you deserve.
If you have questions about processing solutions, terminals, or rates give us a call. One of our ETA-Certified payments professionals is always ready to help.
For a merchant service provider you won’t want to leave, turn to Bankcard Brokers and experience the “Bankcard Brokers Difference”.