If you’re looking to save money by buying a used merchant account terminal you really have to be on guard for hacked equipment. There’s really two types when it comes to it, one is refurbished equipment, which when a lease ends they clear the programming, clean up the unit and resell it. This is fine if you’re buying from a reputable merchant who’s going to have a steady stream of leased equipment coming back that they want to liquidate.

The real problem is the ones on Ebay that sell as new, but way below the average retail price. It can be very tempting, but when something is half the price everyone else is selling them for, odds are it’s a hacked unit. What these people do is reprogram the EPROM (erasable programmable memory) chips to allow them access to the unit (like a backdoor password). This lets the criminal do just about anything including log in from the Internet (if the terminal supports remote access, many do so tech support can fix or reprogram it remotely).   My friend  has seen this happen a half dozen times and the merchant was usually out $5,000-$10,000 before they caught the problem.

If you need a high end unit, negotiate a discount.

The real key is knowing that in business, and in merchant accounts, everything is negotiable. Most places will offer a free terminal if you’re signing up with them or doing a reprogram (switching to them from your current processor). If you’re going for a high end machine or cash register, you can usually negotiate a discount on the unit you really need, instead of getting the one they offer. Also when switching, the place should cover early termination fees of your old account if they’re reputable.

Whichever you get, make sure the terminal is PCI (Payment Card Industry) compliant (there’s a $25,000 fine for using one that isn’t). In English, these are security standards to protect credit card numbers and PIN numbers when you process a transaction.

As always, make sure you’re signed up with a merchant account underwriter to get the lowest rate and fees. The further down you go from the bank, the more residuals get tacked on. The lower tier agents are the ones who use “teaser rates” which balloon up like an adjustable rate mortgage after six months or a year, and 99 percent of the time they don’t warn you about it.

If you want to speak with my friends at MST (who is a merchant account underwriter) call them at 800-715-8053 or visit their site. I have no problem recommending them. Last Saturday someone called him from a previous article, doing $225,000 a month through Paypal. They got him a merchant account which saves him $2,600 a month in fees… I just wish more merchants were aware how high those teaser rates can adjust to without them realizing it.