Equipment Leases vs. Modern Alternatives

Equipment leasing has been one of the payment processing industry’s most profitable schemes for decades. If you’re being offered an equipment lease, here’s what you need to know about why leases are a bad deal and what better options exist in 2025.

The Lease Math Doesn’t Work

A typical credit card terminal costs $200-500 to purchase outright. That same terminal on a lease runs $30-70 per month for 48 months. Do the math: you’ll pay $1,440 to $3,360 for equipment worth a few hundred dollars. At the end? You still don’t own it.

Leases are nearly impossible to cancel. Most include personal guarantees, meaning if your business closes or you want to switch processors, you’re still on the hook for every payment. Leasing companies have filed tens of thousands of lawsuits against small businesses to collect on these contracts.

Why Leases Are Still Pushed

Equipment leases generate huge commissions for sales agents. That’s why some agents push leasing as the only option, even when their processing company offers alternatives. If a sales representative won’t let you purchase equipment or insists leasing is your only choice, find a different agent or provider.

The arguments for leasing don’t hold up. Lease payments are tax deductible, but so is purchasing equipment. Leasing requires no money down, but you’ll pay three to four times the actual cost. The “low monthly payment” isn’t a deal when the total cost is astronomical.

Modern Payment Alternatives

Technology has made expensive terminals less necessary than ever.

Tap to Pay on Smartphones: Your iPhone or Android device can now accept contactless payments without any additional hardware. You can use your providers payment app to allow customers to simply tap their card or phone on your device to complete payment. Processing fees are typically the same as traditional in-person card transactions.

Affordable Card Readers: Mobile card readers that connect to smartphones or tablets cost $50-150 to purchase outright. You tend to get what you pay for in this range. Cheaper readers may have limited functionality or durability issues, while readers in the $100-150 range offer better build quality and features. They accept chip cards, contactless payments, and traditional swipes.

Month-to-Month Rental: Some providers offer month-to-month rental with no long-term contract. You can cancel any time without penalty. Once your cash flow improves, purchase equipment outright. Many processors even offer loaner credit card terminals at no additional cost to help bring in new processing merchants.

Reprogrammed Equipment: Many terminals are universal and can be reprogrammed to work with different processors. Reprogramming typically costs nothing, letting you keep using functional equipment without buying new. You could even look for used equipment for cheap, however make sure you know what devices your processor can re-program as not every terminal works with every platform. You should probably also confirm that your processor is willing to help you program hardware you purchased from a third party.

What to Look For

Reputable providers don’t push equipment leases. They offer straightforward purchase options, rental programs, or work with your existing equipment.

Ask these questions before signing:

• Can I purchase equipment outright? What’s the cost?
• Do you offer month-to-month rental with no contract?
• Can I use my existing equipment?
• Is there any lease in this agreement?

Read your processing agreement carefully. Watch out for sales agents who might try to slip lease terms into agreements without clearly explaining them. A legitimate lease should be a separate document with clear terms. If you catch someone trying to sneaking a lease agreement into your signing documents we would recommend ending the transaction right then.

The Bottom Line

In 2025, there’s no reason to lease payment processing equipment. Smartphones accept tap-to-pay, affordable card readers are available for purchase, and flexible rental options exist. You can accept payments without signing a predatory lease contract.

If you have questions about equipment options or want to understand what makes sense for your business, we’re here to help. Our approach focuses on transparent pricing and giving you options that work for your situation.