Credit Card Processing

Don’t Lease a Credit Card Machine!

by Ben Dwyer

Credit card terminal leases benefit processors not you. Don’t fall into the trap of leasing machines.

It’s that simple. The article below will provide plenty of reasons why you shouldn’t lease a credit card machine, and this settlement involving a large leasing company is further proof.

Credit Card Machine Leases are Nonsense!

Thankfully, the practice of leasing credit card machines has been declining, but some processors just can’t seem to let the cash cow go. Leasing processing equipment is a big money maker, and processors with questionable business practices will ride the gravy train to the end of the tracks.

An experience we had here at CardFellow will give you an idea of just how much money a processor can make by leasing a credit card machine.

We helped a dental office that was paying $45 a month over four years for a PIN pad that they could have purchased for $90. They’re paying $2,160 for piece of equipment worth $90. The monthly lease amount paid for the PIN pad in just 2 months, but the office had the lease (with the monthly payment) for another 46 months after that. The processor is making a profit of $2,070!

We would have loved to post the name of the processor, but the dental office asked us not to. Please post a comment below to let us know if you’re stuck in a lease. We’re more than happy to give processors willing to lease equipment some negative press.

The exact amount that the processor charges for the equipment you lease will vary, but whether you overpay by a little or overpay by a lot, you’ll still wind up paying more than you need to for equipment. In this snippet from an equipment lease, the business is paying more than $1,500 over 4 years for a machine that costs a few hundred dollars.

equipment lease statement

Save yourself the money and avoided leasing.

Benefits of a Lease (According to Processors that Lease Equipment)

The term beneficial lease is an oxymoron when referring to processing equipment. Regardless, let’s look at the benefits of leasing as provided by processors that lease equipment.

No Initial Costs

Well, this is certainly true. A lease does not typically require an initial investment. Instead, it drains your bank account over a period of two to four years. If possible, consider borrowing $200 for a friend or relative if this is your main motivation for leasing a machine.

Fixed Monthly Payment

They’re right again. Leases do typically have fixed monthly payments. Of course, a single fixed payment of $200-$300 (to purchase a machine outright) is a lot more financially attractive than 48 payments of $50.


This selling point is always a headliner when it comes to leasing. After all, technology is moving so quickly that your terminal will be obsolete in a year or two. Right? Wrong. Modern terminals will be functional for quite some time. Even if you have to purchase a new terminal every five years, you’re still paying much less than you would have if you went the leasing route.

Lease Costs are Tax-Deductible

Of course they are, but so is the cost to purchase a terminal. This one is laughable and not a good reason to justify leasing a terminal.

“It’s Not the Agent, It’s the Processor”

This is a lame excuse. The organization selling processing services, whether a direct processor or an ISO, has the ultimate say in what is and isn’t an acceptable practice. Some two-bit agent using their processor as an excuse to lease equipment is one you should throw out of your store or office.

Agents and ISOs earn (a lot) of commission by leasing equipment, and any willing to do so is simply looking to pad their profits.

Look at First Data Global Leasing, for example. First Data has thousands of ISO and agents, and their leasing program is available to any that want to use it. However, many prefer not be associate with gouging their customers on equipment costs.

Getting Out of a Credit Card Machine Lease

Unfortunately, lease agreements are typically water tight. You’ll have better luck getting out of a straightjacket than a lease agreement.

The best thing to do if you’re stuck in a lease is to read your agreement carefully to determine how much notice you have to give to cancel your agreement. Once you figure out the date, set a reminder so you don’t miss it.

And forget about buying your equipment at the end of the lease. Most leases have a fair market value clause that would make you pay more than the terminal is worth. Not to mention that processors usually sell equipment at or near cost with a new credit card processing account.

There is some good news, though, if you’re looking to break your lease because you want to switch processors. A lease agreement is typically separate from a processing agreement. This means that you can cancel your merchant account agreement without having to cancel your lease agreement.

Many credit card machines such as those made by Verifone, Hypercom. and Nurit are universal and can be reprogrammed to work with different processors. If you have a universal machine, you can ditch your current processor, continue paying on your lease, and use the machine with your new processor. While you’ll still have the equipment lease, you may be able to save on your processing costs, so it’s better than nothing.

A piece by NBC Connecticut highlights how some small businesses have to deal with lawsuits as a result of their leases.

The article (and lawsuits) are about deals between Lease Finance Group and its parent company Northern Leasing Systems. NBC reports that as many as 33,000 lawsuits were filed by Northern Leasing Systems in New York state, with another 4,000 by Lease Finance Group. The article also points out that to defend the lawsuits, businesses would be required to travel to New York, resulting instead in many people settling.

If you are in a contract for an equipment lease and get threatened with a lawsuit, always contact a legal professional to fully understand your options.

32 thoughts on “Don’t Lease a Credit Card Machine!”

  1. I wanted to post a comment because I recently leased a terminal for my business. Not only is money tight, but the salesman that leased me the terminal lowered my overall cost of processing to 2.3% including the lease. I agree that there are scammers out there leasing terminals to merchants and hitting them hard in fees, but this company down here I feel really looked out for me and my business. I own a car wash and my terminal already malfunctioned and the next day I received a brand new terminal ready to go. I guess its how you look at it. Hopefully this helps.

  2. A vendor for Merchant Processing Solutions dba Payment Systems talked our store manager into exceeding her authority and leasing machinery. Estimated value of the equipment: $900. Estimated present value of the lease: $7,000.

    Our only hope now is that our small claims court judge will see that she was not acting as an agent for our S-corporation when she signed this crazy contract.

    Also, this processor has a strange practice of settling in tiny batches, withdrawing fees from our checking account in amounts like $0.67, $0.69 and $1.01. It’s all so fishy!

    1. Catherine, the same thing happened to me. A Payment Systems salesman came in at peak customer time even though I asked him to be there earlier. Being in a big hurry, I let him talk me into signing a Global Leasing contract with the promise that he would return a completed signed copy the next day. I didn’t get it back until the next week. It was filled out alright, the contract name had been change to the company name, my signature had been changed, the equipment had been doubled, and the lease price was $149.00 per month plus other fees. The total price for the terminal was going to be almost $8000.00 (I bought one for $250.00 later). After Payment Systems deducted $3000 from my bank account over a 17 month period, I finally stopped the automatic payments. They are now threatening to sue me. I’m going to go after them on forgery charges. Wish me luck.

  3. Aleatha Carpenter

    I am having a complete nightmare with a credit card terminal leasing company!!! I have no experience in this and feel trapped by a 48 month lease with Elite Pay Global that I can not figure out how to solve. I have no equipment that works and yet they continue to demand that I pay. The salesman who they contracted out with and was my first contact has disappeared and they claim they don’t know who the salesman was because they contract out with so many different agencies. I cannot afford to continue to pay for something that is unusable. I have spent hours and hours being bumped from dept. to dept. with each saying they are not the ones who handle the issues I am calling about. They continue to say that I signed a contract and must pay but have no concern over the fact that I do not have the appropriate equipment that is usable. They just keep saying I need to update my account in full before anything else happens. Isn’t that like paying rent on an apartment you cannot yet live in? How can they get away with this and continue to add on late fees? This has been going on for 4 months! Isn’t a contract about two parties agreeing to do something? Is this not a breach of contract on their part? What can I do?

  4. I am so mad that our credit card machine (we owned it) broke in December, and due to the craziness of the season with business and family, I trusted my PNC bank rep who told me my only options were to lease a machine for $33 per month, or buy the new machine for close to $1000. Well, we needed our credit card income and we did not have the extra $1000, so I opted for the lease not knowing the total rip-off that it is. Granted, we had to upgrade the machine to accept another form of payment, but if I knew that the price of these machines was actually more like $200, I would have bought the better model that we have now. I just saw it online for $189.00. I am stuck paying $33 per month for 45 more months! That is robbery! There has to be a loop-hole or way to get out of it. Anybody know?

  5. I feel completely scammed by Bank of America Merchant Services that leased me a credit card machine through First Data. I’m a very small (one man) start-up tech company. They convinced me of the need for the machine. The Small Business Merchant sales representative told me not to worry if I needed to cancel because if my business did not work she would take care of cancelling the lease. Well no luck they are sticking to the lease for a wireless machine at $45 a month for 48 months. I’ve closed the company, and Bank of America closed merchant account, but I’m still stuck paying the lease. I’m trying to fight it.

    1. The same thing happened to me. I never signed the lease agreement. The salesman told me that the equipment was a rental and that I could cancel at any time. I called First Data, and I was told that I had to pay $70.00 plus tax for the next 48 months.
      Did you have any luck with fraud charges, or are you just as stuck as I am?

    2. Hi Jordan,
      I’m currently in the same exact situation with a merchant services account through Wells Fargo. I sent back my equipment within a week or so of discovering the 48 month lease that NONE of the employees told me about when I signed up. I will not be using it and have been making phone call after phone call to get my lease dropped. Have you had any luck fighting the lease since last year?
      Thanks! Any advice will help.

  6. I closed my cafe almost 2 years ago, and I’ve been paying $50 a month for a credit card machine I haven’t used since closing. I just found out that I have to keep paying February 2015! The leasing company said I can settle and ruin my credit, or I can find someone to take over my lease. Why would I want to ruin someone else’s life too? I told the lady, “thank you for absolutely no help at all,” and hung up. What a bunch of pirates.

  7. I just inquired about breaking my lease and found out that we are bound to pay the leasing company every month until July 2016. This is insane! I wish there was something I could do to stick it to them.

  8. I have a lease with ElitePay Global. Not even a month into having signed a lease, I can’t get out of this mess. I called this salesman back within a hour of signing it, and asked for her to come back to cancel. They didn’t even leave me with the contract. Over the phone, the salesman said it would be emailed to me. I was busy that day and signed, because all the savings I would get out of it. I sign it and she just about ran out. They refused to come back to get out of the signed lease. I just see no way out.

    1. Michael Neuhaus

      You can get out of that, stop ACH on that company at your bank. Send a dispute letter to them and send the equipment back. Be sure you file a letter with all three credit bureaus to lock up the credit report and also send to Dunn and Bradstreet.

      1. I would love more info about how exactly to do what you said to get out of a lease. I’m stuck in 60 month lease at $90.89/month. First American Payment Systems was my processor for 10 years. Sent me urgent letter all highlighted that I had to upgrade machine right now! I was dumb and am getting screwed!! 45 months left, just got new processor. First American wants $495 early cancellation fee even though they only gave me the special rates I agreed to for 3 months. They quit mailing statements so I wouldn’t notice. Lease company wants $3700 to buy out lease. My new processor gave me machine free with no strings attached and no contract. Cancel anytime and keep machine. Please help.


        Email me:

  9. Like has been stated above, we are closing our business and cannot get out of our lease with Northern Leasing.
    They won’t talk with us. They suggest we sell our lease to another company. Who would want it?

  10. I was approached by Elite Pay Global. I was already with First Data but EPG’s rates were better. I told them I already had a machine and they said I couldn’t use it with their contract and in order to get the great rate I would have to lease a machine for 48 months at $187.47/month. What a fool I was! I wish there was a way to get out of this. I have 2 machines that are exactly the same! Not only that, the salesman lied about some things and I had to fight with the main office for them to give me what he promised. What a joke!

  11. I just discovered that Lease Finance Group has been deducting $58/mo. from my checking acct. since 2001! They were kind enough to FAX me the copy of the lease which had a 48 mo. term. If I understand the fine print, there are 3 options at the end of the term:

    1) return the equipment
    2) buy the equipment at fair market value or
    3) continue monthly payments.

    Of course if no action is taken at the end of the term, they default to option 3. So I played right into their hands as I was set up to do. So now I have paid them somewhere around $9,600 for some long gone obsolete boat anchor. And to rub a little salt on the wound, they want another $254 “buy out”??? I recently terminated my contract with Northern Leasing 3 mo. early and was happy to pay the $120 penalty and return the machine because I now have TransFirst which charges a $39/mo. flat fee, no equipment necessary! Oddly enough, the rep I spoke to about the lease fees debits had all the info from both previous accts altho they were competing companies?? Sooo….don’t sweat a 48 mo. lease!! Just make sure you TERMINATE at the end!!! Wow, do I ever feel stupid!!!

  12. Pingback: Merrimack Credit Card Machine Leasing | Understand Finances

  13. I just found myself locked in to the same problem as many others. Being approached by a company (Lease Finance Group..LFG) who convinced me to switch processors because of better rates. I found myself in a new lease, for more money thanks to some blatant ‘untruths’ of the sales girl. I tried to cancel, and the company conveniently didn’t get the lease papers to me for over 3 weeks. They left no copies on the day I signed, and ‘written notice to cancel’ had to be sent in within 3 days of the sign date.

    Beware of these companies. I’m surprised some lawyer hasn’t started a class action suit because of deceptive practices! I’m sure there are plenty of us who would sign on!

  14. The sales agent from Best Rates Direct said that they could save us tons of money. Signed with them in Nov. of 2014 and in March 2015 I told them we are done!!!!!! They said it was my responsibility to get it connected and now I am locked into the contract. Five months into signing the contract they still could not complete getting our two stores up and running. I told them that I am done with them and went back to Heartland processing. Now I am locked into a lease with Logical Lease and they won’t let me out of the contract. I am paying 84 dollars a month for five years for two stores. This is totally wrong and need a way out. They failed and now I’m paying the price. STAY AWAY FROM BEST RATES DIRECT AND LOGICAL LEASE.

  15. In 2013, we were convinced by our Bank (B of A) to sign up for merchant services to accept credit cards. I was told that I could cancel the lease after 2 years. So, after putting up with exorbitant processing fees, extra fees to insure the GPS pin terminal, and high percentage fees charged by each credit card company, we met with B of A to get a cheaper deal. I genuinely thought the lease was truly over. One month after switching our machine for a new one that uses the latest CHIP technology, we were charged $321.00 for it. We were told there would be no charge to change equipment! And, to add a cherry on top, the lease is for 48 months, NOT the 24 the bank lied to me about. The term was in very tiny font on the contract which I just re-studied. We only have about one or two credit card sales per month. It’s not worth it. I cannot wait until 2017 to cancel this nightmare! Until then, we seem to be stuck paying $70 per month PLUS additional fees per transaction. For a small fish in a big pond, this just bites. There ought to be a law to protect consumers from sharks like these!

  16. I got into a contract with Northern Leasing + First Data and I only had 18 months left on my old contract. They told me they would pay off the old processor lease plus bank fees. NOT! Now I am tied to two companies and to top it off, I turned 66 and retired in Feb 2015. Now 1 wants 1100..00 and the other wants 1800.00 They keep sending class action suit letters. I don’t know what to do. My 750 credit score went down to 610. It affects my husband’s credit, or I wouldn’t care. Take me to jail.

  17. Bait and switch. I was deceived and made a big mistake. I own two companies under one roof and own both credit card machines free and clear. And I was convinced or I should say deceived into signing two new 48 month leases at $100 per month which equals $9600 plus $325 each for a application fee. I agreed because he said he would save me $1200 per month on my credit card fees. I figured I was saving money on my fees so i can agree to the leases. After four months into the contract with ELITE PAY GLOBAL I am actually paying $500 to $1000 more per month plus getting screwed on the leases every month. I found out these machines are $169 wholesale and $269 retail (Vx 502 and Vx 820.) Come to find out they are two separate companies. NORTHER LEASING Systems, Inc. are the crooks who provide the leases that are non cancelable and Elite Pay Global from Henderson Nevada. Barney Kalman who sells Elite Pay Global processing service will verify that the Manager at EPG Shaheen Mazloom said he would save me $1200 per month. They lie to their salesmen to get the sale. I interviewed two other processors and they did the same thing. I provide a copy of one of my monthly statement, they fax or scan it and get it to the manager at the headquarters to see where they can save. One company said they will save $600 per month and on said $500 per month. They lie about the savings to sell the merchant the overpriced processing. I complained about the higher fees and they are doing an audit.

    1. Sorry to hear of your frustrations, Mark. It sounds like you could definitely benefit from CardFellow – in addition to competitive quotes from processors in our marketplace, we offer an independent statement auditing service, separate from your processor, so that we can keep tabs on your processing costs and make sure you’re paying as little as possible.

      We’re not a processor ourselves, but we run a marketplace where we lock processors into contracts that dictate what they can and can’t do through us. All the processors that place certified quotes through CardFellow have to agree to interchange plus true pass-through pricing, a lifetime rate lock, no cancellation fee, no equipment leases, and more. Since we’re not a processor ourselves, we’re able to help you find the solution that’s best for you, not for your processor. We also keep your contact info private so there’s no pressure from sales calls. If you’re interested in checking out what pricing is available to you, it’s completely free and there’s no obligation. You can sign up here.

      Unfortunately, Northern Leasing is well-known as a predatory lessor. It is currently being sued for racketeering.

      Would you consider taking a minute to write a review of Elite Pay Global to let other businesses know of your experience? I’d appreciate it. You can leave your review here:

  18. This exact same thing happened to my Aunt this past month. I am also a business owner and I would never think about leasing a machine. She’s a business owner as well and one of her customers came in one day stating that he could help lower her monthly merchant costs. Obviously she wanted to see how much she could save, she has been with the same merchant company over 10 years. He looked over her report and told her how much she would save if she was with them. She didn’t understand English very well and read even worse so she asked me to help translate.

    He told me how he could save her if she had switched. So I listened and asked questions, he told me the machine would be free, and I asked him questions she had for him, I was mainly a translator. After awhile she met with him, he proposed the offer and she accepted, thinking the machine would be free and she only had to pay $4.95 for insurance, which could be covered if she insured the machine. She asked if there was any other money she’ll have to pay and he said that was all. She signed the papers and got the machine, he helped her set it up, confirmed it was her who wanted the service and all was said and done.

    That was a month ago, now she received 2 bills, one from First Data which showed she was actually paying more than her previous merchant account. The second data was from her lease, which stated she needed to pay $189 per month. I didn’t know she had signed a lease for the machine, so I called First Data and asked why her rates were so high compared to the merchant company before, they offered me a complimentary review of the rates to lower them. Then after talking to her, I realized that she had to pay $189 per month for her lease of the machine. I called the machine leasing company and said that the agent told me there would be no cost for the machine, she told me that the agent wasn’t part of their company and that the agent was the merchant company’s employee. I then called the merchant company again to get this sorted out, to speak to my agent directly, the merchant company said they had no information of my agent and couldn’t provide any contact information.

    At this time I got annoyed because the agent lied and basically scammed my aunt. I wanted to talk to a supervisor and they said I would receive a call within 24 – 48 hours. I proceeded to address my issue at hand, about being scammed and lied to by THEIR employee and demanded something be set right. I talked to a supervisor and she said that she’s already offering to review and lower my rates, and the machine was out of her hands. I again expressed my dissatisfaction with the way the agent lied and scammed my aunt and asked to get his information so I can speak to him personally, she transferred me to another manager who stated that my aunt signed right next to all the rates and that they were already offering me complementary review to lower my rates. I keep restating that my issue was not with my rates but with the fact my aunt was lied to when she signed the lease. The lady then stated that my aunt had the lease signed and all the information was in there, I reiterated that my aunt did not read English well and so she asked questions to the agent and he explained everything. HE DID NOT state that the lease was for the machine, now did he state how much the machine was at market value, nor did he state that she would be paying well over $12,000 at the end of her lease without even keeping the machine, nor did he state that the lease had a “NO CANCEL” clause that prevented any cancellation within the 5 years. It wasn’t until after she got the bill that she realized she was paying much more than her previous merchant provider and asked me to look over the lease, and I saw that there was a $189 per month not including tax, and there was a no cancel clause.

    The supervisor at First Data now tells me that they will have to review the lease and it’ll need to be on a recorded phone conversation on Monday, today is Wednesday. That they will call on Monday. I continued to ask what will be done about this employee of theirs, who took advantage of the fact that my Aunt was Asian, who didn’t know English well, and completely scammed her, she told me that because I wasn’t the owner of the account, she could not talk to me and ended the conversation right there.

    I don’t really know what options there are besides going through with the lease. She’s definitely changing merchant companies, but other than that, she can’t break the lease. Even if the agent from First Data came under false pretenses, lies, usury, and possibly consumer fraud, it’s mainly a he says/she says scenario. With him stating that he has told her everything and she probably didn’t understand him. There’s a language barrier here and he can definitely use that to his advantage, therefore, I don’t know of any options. This is basically a $13,000 expense in the next 5 years for nothing in return. Being a small business owner and having been in business for over 10 years, it is sad that First Data has to take advantage of us. I know that I will never use First Data ever again nor will I recommend it and I will publicize as much negative reviews as I can so other people don’t fall into the scam we did.

  19. Can someone please help me? I was stupid enough to get in to a 4 year leasing contract with Global Leasing (also First Data) for $239/month. I returned the machine and begged to get out of the contract. I blocked the auto withdrawal. Now I am being charged a late fee and they are insisting on getting the money. I cannot afford to pay over $10,000 dollars for a 250 dollar machine. Please beware of these jerks. The processor was Prestige. They lied to me about the contract. Can anyone help me?

    1. Hi Rachel,
      I’m so sorry to hear of your troubles. Your best bet is to speak with a licensed attorney or contact your state Attorney General’s office. Best of luck!

  20. I just discovered that my office manager (now fired) has been allowing a debit of $41 per month to Lease Finance Group for a terminal supplied in 2003, never replaced by them and now obviously obsolete. Total cost to me: approx $6000 for a terminal we have not used in about 9 years. LFG did not even have the correct authorizing person or address for the business.
    I called yesterday; after the requisite 20 min on hold, I was told that I had to pay them $250 plus for “replacement cost” or return the terminal (maybe) which I cannot find, or lease a new one from them under the same horrific contracting. They would not supply my account number or an address to return the equipment. Does anyone know their physical address or email?

  21. Hello, I had been a manager of a body shop and the owner had died. The sister had become the new absent owner, so I had to sign for the new credit card processor(First Data). The sister closed down the shop, claiming bankruptcy I believe, and now I’m getting threatening calls and bills from this First Data Co. I am wondering is I am responsible for any of this. Can anyone give advice?

    1. We’re not able to give legal advice, and this is the sort of situation where you’ll want to consult a lawyer. Typically if you signed a contract you’ll be responsible, but a licensed attorney would be the most reliable source of information. Good luck!

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