Credit Card Terminal Warning

Can you say proprietary?

How about “proprietary credit card data capturing device?”

To explain what I am trying to get at let’s start with the definitions of the words in that phrase above:

pro·pri·e·tar·y = indicates that a
party, or proprietor, exercises private ownership, control or use over
an item of property, usually to the exclusion of other parties.

cred·it card dat·a captur·ing de·vice
= credit card terminal

When you put these words together what you end up with is a credit card terminal that only works for a particular credit card processingnetwork. On top of that the companies that make such products usually have contract with an early cancellation fee and lease the terminal to their clients for three to four years!

So let me paint a picture for you. You, the merchant, are somehow sold on a rate of 1.39% from a credit card processor. But of course to get such a rate you have to lease a new machine and sign a four year contract. You sign the paperwork, your new terminal arrives the next day and off you go, looking forward to saving all that money because of the wise business decision you just made.

Then your first statement arrives. What’s this? The 1.39% only applies to 35% of your transactions?! The other transactions come in a rate somewhere between 2.79% to 4.23%! On top of that your lease is $39 a month ($39 x 48 months = $1872!). Now what do you? You want out of this contract and you want out now. Problem is you are stuck with a four year contract with an early cancellation penalty and a terminal that only works with this provider and you still owe 41 months of payments on it.

So what is the solution? I have no idea. I am just trying to warn you to watch out for such a scenario and make sure it does not happen to you. Just remember this time tested, well know wisdom – if it is too good to be true, it usually is. Consider yourself warned!

Like this post? Then subscribe by RSS | Email