A retail merchant account, using a credit card machine (also known as a credit card terminal) is the conventional form of credit card processing for retailers and other businesses who accept credit cards in person.


Below we offer our recommendations as to the best, most reputable providers offering retail merchant accounts and credit card terminals, based on our 5 years of experience in advising businesses seeking swipe machine credit card processing for their store & office operations.


We only discuss four credit card terminal providers that we deal with – we want to simplify things for you. However, the website addresses of another three retail credit card processing services that we can recommend are then listed.


Finally, we examine some of the issues involved in selecting a credit card machine and retail merchant account


Credit Card Machines

Our Top Credit Card Terminal Recommendations
(as of May 16, 2007 )

Total Merchant Services
Discount Rate: 1.65%
Transaction Fee: 20 cents
Monthly Statement Fee: $7.50
Monthly Minimum: $25.00
Up Front Costs: Free
Our Rating (out of 100 points): 93
  • Offers a free Hypercom T4100 terminal and get a check imager for free as well
  • The T4100 supports most check scanners or imagers, contactless readers, as well as stored value cards such as loyalty and gift cards.
  • No application fee, no annual fee, 45 day “no obligation” trial period, overnight terminal replacements on any defective terminal, 1-2 day approval times.
The Transaction Group
Discount Rate: 1.79%
Transaction Fee: 25 cents
Monthly Statement Fee: $10.00
Monthly Minimum: None
Up Front Costs: From $49.00 & up
Our Rating (out of 100 points): 92
  • Offers a wide variety of the best card processing terminals available.
  • Terminals accept ATM/debit cards & include credit card fraud protection.
  • Automatic credit card batch summary printing and closing.
  • If you are presently processing and wish to lower your rates, contact TTG for a free rate analysis.
  • 24 hour approval
  • Low rates, low start-up costs – and no cancellation fees.
Discount Rate: 1.74%
Transaction Fee: 20 cents
Monthly Statement Fee: $10.00
Monthly Minimum: Not specified
Up Front Costs: Nurit Equipment from $200.00
Our Rating (out of 100 points): 88
  • Offers the Nurit 2085+ Point of Sale/EDC terminal & printer.
  • Low cost, powerful features, easy to use and compact.
  • Four soft keys allow better interaction with the application.
  • 12 line-per-second thermal printer with automatic feeding system, and four user programmable function keys.
  • The Nurit 2085+ also incorporates Pin Pad features.
  • Quick approval for retail merchant accounts and highly competitive rates.
Discount Rate: 1.69%
Transaction Fee: 15 to 35 cents
Monthly Statement Fee: $10.00
Monthly Minimum: Depends on monthly volume.
Up Front Costs: No Setup or Application Fee
Our Rating (out of 100 points): 86
  • First Data independent sales merchant account for yout retail store.
  • Your funds will be transferred into the bank account of your choice.
  • No application fee or terminal programming fee.
  • Free Amex setup and free fraud screening.
  • Free credit card machine – restrictions may apply.

   Three other providers of merchant accounts for retail credit card processing that we can recommend:

How Credit Card Machine Processing Works

In addition to your retail merchant account itself, you will also have to acquire ‘point-of-sale’ swipe equipment (i.e. a credit card terminal) in order to accept payment by credit card at your store or office. . Typically you will be working with a local sales and support office that will be your local sales agent.


You will also likely require a printer, to allow you to keep a hard copy of each transaction. Most small business credit card machines will allow you to manually type the customer’s credit card information manually on a keyboard – for those instances when the credit card’s magnetic stripe, or the credit card terminal itself, is defective.


Credit card machines can also include a variety of features, such as installment payment processing; debit card/check verification functionality; integration with your computer to provide you with detailed batching & reporting capabilities; and database-building of your customers’ information.


The credit card terminal equipment can either be leased or purchased outright. In addition, many come with maintenance packages. If leasing, you may well have a buyout option, so you can purchase the equipment during or at the end of the lease term.


And today some merchant account providers offer refurbished free credit card machines for small businesses at no cost.


If you are going to lease or buy for your retail credit card processing, how do you determine which is the right way to go?

Here are some of the issues to consider when contemplating retail credit card merchant services and equipment:

  1. Pricing : The total payments you will be required to make under a lease over the whole term will likely be 2 to 4 times greater than the cost if you purchased the equipment upfront. As an example, you could either pay $600 now to purchase the credit card processing terminal, or lease the same equipment for $35/month for 4 years. The lease payments over the four years would total $1,680 – more than 2.5 times the purchase price. The reason lease payments for a small business credit card terminal are so high relatively is due to the fact that the leasing company has to factor in the chances that you could default on payments during the term of the lease – so therefore its risk is significantly higher. But although a purchase would appear to be the obvious choice, there are some other factors to be considered before making your decision.
  2. Income Tax Deductibility : Normally the interest portion of payments under a lease is deductible from your taxable income. Conversely, with a purchase, you can probably depreciate a portion of the purchase price each year – however the latter deduction will probably be less. Consult with your accountant.
  3. Cashflow : If your cashflow can support an upfront purchase you should seriously consider doing so. But if circumstances require that you keep a tight watch over your cashflow, then even though the lease’s monthly cash outflow is relatively expensive, not having to expend a large sum upfront may be financially prudent, if you are confident your cashflow will improve over time.
  4. Financial Statements : In your financial statements you will have to state as a liability your obligations under a lease for the outstanding balance due thereunder at any particular time.
  5. Equipment Warranties : Often with a purchase of a credit card terminal your equipment warranty flows from the manufacturer of the credit card machine, but with a lease, the warranty may be offered by your leasing company.
  6. Ownership : When you buy the retail processing equipment, you will become the legal owner immediately. However, if you choose to lease, you will not become the owner until you make your final payment (and the lease may not even make you the owner then – so be sure to carefully check the terms of the lease. Or, you might be required to make a final payment under an ‘option to purchase’ to actually become the legal owner).

If you choose to purchase outright , remember that swipe machines are relatively inexpensive when taking into account the considerable revenues they are going to add to your bottom line. It is best to pay a bit more in order to acquire equipment that best suits the needs of your business. Inferior equipment can detrimentally affect your business.


And should you decide a lease of a credit card machine is the way to go, make sure that prior to signing the lease you are fully aware of (i) how much your monthly payment will be, including amounts you may be required to pay for insurance and sales tax; (ii) what happens if you default – are there payments/penalties that will arise; (iii) whether you can sell or assign the lease should you choose to sell your business; and (iv) the length of the term of your lease and whether it is possible to cancel it early, and if so, the penalties, if any, you will be required to pay.


For information on the various costs you may incur with your retail merchant account and credit card terminal processing, see our credit card fees discussion .