Why We Offer Free Equipment?
All merchant service companies offer some kind of free equipment program. Because our industry is so competitive, all of us must offer a comparable program or choose to lose business and this is a huge advantage to the merchant. This keeps all companies in check with each other, which allows merchants to avoid paying the extra upfront costs of equipment.
You Must Raise Prices
Here at Gulf Coast Payments we do not raise prices to offer Free Equipment. We give you Free Equipment as incentive to process transactions with us, no different than our competitors. We offset the costs of the equipment by profiting on your processing, however this is a gamble on our end because not everyone profits. We have done the math, even though we leave money on the table, there are enough merchants we profit on to keep the lights on.
What “Keeps Our Lights On”?
As mentioned above we take a risk on those who don’t process transactions. On average the cost of equipment is around $250 for a countertop terminal which is the most popular. So how do we protect I from losing money? It is called the Monthly Minimum. This is what helps merchant service companies recoup some of our loses and provides a security blanket to the industry.
What is the “Monthly Minimum”?
The Monthly Minimum is a fail-safe which all merchant service companies that give away Free Equipment offer. The average Monthly Minimum is $25 and is based off the percentage of sales. It is probably the most hidden fee in the merchant service industry. We all rely on sales agents to explain how the Monthly Minimum works and there is always some that mislead or just forget when talking to the merchant. Merchants see the Monthly Minimum of $25 as one sale of $25 or over and they have met the requirement. This is not the case!
Here’s how the Monthly Minimum works, we are going to use an easy example. If you process a transaction of $1,000 at a rate of 2.5% that equals $25 so you have met your Monthly Minimum. This fee is also prorated, so if you were to process $500 at 2.5% equals $12.50, therefore you owe $12.50. Just keep this in mind when inquiring about the Monthly Minimum. It is the one fee that is misunderstood.
Gulf Coast Payments is transparent when it comes to the Monthly Minimum. This is how we help absorb the cost of supplying merchants with Free Equipment. We want you to process, but if you never run transactions we have to charge something or we could not offer a Free Terminal Program.
If you would like a Free Terminal to process transactions, please call us at 850-380-8300.