So think all credit card machines are alike? Of course not! There are many obvious differences and many that are not so obvious. But you knew that because it works that way with many things: cars, appliances, etc.
So what do you need to be looking for? Well, that’s an article all by itself, but one thing to keep in mind is something never brought up by sales agents and merchants rarely think to ask. “Can this terminal be used with another processor”? Credit card machines may seem simple as they all generally require the same three things:
- Some way to connect to the processor (telephone line, Internet connection, wireless signal)
- Electricity (Either a power cord or battery)
- A merchant account
But it goes much deeper then that. Unlike cars or appliances which generally work no matter what gas station you use or brand of detergent you buy, credit card machines don’t necessary work with every merchant account. Some credit card machines only work with a select few, or even more ominously, only one merchant account provider.
In the case of the terminals that work with only a select few providers, this is due to most processing banks just not offering support for the credit card terminal. In the merchant account world things work a little bit backwards. Instead of their being demand for a piece of equipment first and the manufacturers filling that demand, the manufacturers create the equipment first and then hope their is demand for their product. They have to hope all of the credit card processors will certify their equipment to be used with their services. If they don’t, that processor’s merchants just can’t use that credit card machine. In some case a few processors will certify the machine (typically the smaller processors) but the other processors (the major players) won’t.
In the case of the credit card machines that work with only one processor, the cause is less reason is a little more frightening for merchants. These credit card machines are designed and manufactured with the sole purpose of only working with one processor. This is done at the processor’s request. They do not want their equipment to work with any other processor.
So why are these credit card machines bad? Because if your business chooses to use one of these machines, you will essentially be locking yourself into that processor. If you chose to leave their services you will be forced to buy a new credit card machine to use with your new processor. So if you are unhappy with your current processor’s rates, even if you find a lower rate elsewhere, it could take you months or years to save enough money with your new lower rates to cover the cost of that new terminal. Unless you are extremely unsatisfied with your current processor it is unwise from a business point of view to leave your current processor.
The sad part about this is the sales agents who sell proprietary equipment know what they are doing. They just don’t tell you.