Buying Your POS – What You MUST Know First

So you’ve started a business and you know you need to get a terminal to process the sales you’ll inevitably be getting.  And if you do a quick search on Ebay, you see a tonne of terminals there you can buy direct and own.  When you call your Acquirer, you find out that they can also provide you with a terminal but there’s a monthly fee associated with it.  It’s not hard to get seduced into the logic of paying a one time fee and owning your terminal as opposed to paying a month fee for the length of your contract.

But before you make this common mistake… beware.  Chances are, you won’t be able to use that terminal you bought with any Acquirer and you will have just wasted a couple of hundred bucks.

The reason is the way the Canadian credit and debit industry is set up.  There are a set of rules and requirements for every terminal manufactured in Canada and for every terminal that an Acquirer wishes to carry in their line of available POS must be certified to their specifications.  What this essentially means is that an Acquirer must do a series of tests with each Card Brand (Visa, MasterCard and Interac) that are specific to that type of terminal that links it from their host to each card brand.  Each Acquirer chooses the terminals based on their current portfolio of merchants and what each merchant demands.  They look at the options the different terminals offer and choose the ones that make the most sense and fit the most needs.  Since every merchant portfolio is different for each Acquirer, some have more restaurants while others could specialize in taxi services, the line up of each POS offering could vary quite a bit.  If you purchase a terminal that is not in the POS lineup of your Acquirer, you will not be able to use it.

Another reason is that the land of terminals is an ever changing landscape.  Due to new PCI requirements emerging every year, terminals can become delisted or obsolete within only a few years of being introduced.  You could unknowingly purchase a terminal that is no longer certified to be used in Canada.

Which nicely leads us into the final and one of the most important reasons not to purchase a terminal.  You have no idea where that terminal was or why the seller is selling it.  It’s more common than not that terminals that show up on sites like ebay or craigslist are stolen terminals that thieves are trying to sell off.  The reality is, once a terminal has been reported as stolen, the serial number is recorded and sent out to all the fraud mitigation groups of every Acquirer and every card brand.  If this serial number suddenly shows up on the system, it will be automatically deactivated because it’s suspected as a tampered device.

So before you waste your money on what could be perceived as a cost savings, think twice.  Renting a terminal from your Acquirer will not only guarantee that you always have the latest and greatest equipment, but it will also ensure that you have the support needed to troubleshoot it if it does go down or if you need a replacement.

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Matthew Hunt has been helping small businesses get set-up with Canadian Merchant Account Services since 2007 and helped 1000's do so. Join Matthew on Google+.


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