Cost examples and choosing a best-fit processor
Card terminal rental vs purchase vs lease in Canada: the full cost compared
Compare renting, buying and leasing a payment terminal in Canada over its useful life, with payback arithmetic, lease warnings and what the Code of Conduct says.
Over several years, buying a card terminal usually costs less than renting one, provided the terminal works with your processor, stays supported by security standards, and you are comfortable handling repairs. Renting costs more over time but includes swaps and repairs and avoids an upfront payment. A third option, a lease from a separate leasing company, deserves the most caution: leases can run for years, be non-cancellable and total far more than the device's price. The comparison is simple arithmetic: total payments over the period you expect to use the terminal against the purchase price plus any repair costs.
This guide is part of the estimates and choosing section. All prices are illustrative.
The three ways to get a terminal
| Option | How it works | Pros | Cons |
|---|---|---|---|
| Rent from the processor | Monthly fee added to your statement | Repairs and swaps often included; return when you leave | Most expensive over time; must be returned on exit or a non-return fee applies |
| Buy | One-off price, from the processor or a reseller | Lowest long-run cost if supported; no monthly fee | Upfront cost; may be locked to one processor; replacement is on you |
| Lease from a leasing company | Fixed monthly payments under a separate contract | No upfront cost | Long terms, can be non-cancellable, may outlast the processing agreement; total often far above the price |
A mobile card reader paired with a phone or tablet is a lower-cost type of hardware that is usually bought outright. Smart terminals and countertop units with printers cost more. "Tap to pay" on a phone, where offered, can need no extra hardware at all; check the fees and limits that apply.
Worked example: buy or rent?
Illustrative figures: a countertop terminal costs $650 to buy, or $30 a month to rent.
- Yearly rent: 12 × $30 = $360.
- Payback on buying: $650 ÷ $360 ≈ 1.81 years.
- Over four years: rent $1,440; buy $650; saving from buying $790, before any repair cost.
- If the terminal fails after two years and must be replaced at $650, the four-year cost of buying is $1,300, close to renting.
Run your own figures in the buy vs rent payback calculator. Set the horizon to how long you expect to use the terminal, not to an optimistic lifespan.
Worked example: the lease trap
An illustrative lease: $49 a month for 48 months, non-cancellable, for a terminal that sells for about $650.
- Total lease payments: 48 × $49 = $2,352.
- Extra cost over buying: $2,352 − $650 = $1,702.
- If the business switches processor after 18 months and the new processor cannot use the leased terminal, 30 payments remain: 30 × $49 = $1,470 still owed for a device it no longer uses.
What the Code of Conduct says
The revised Code of Conduct for the Payment Card Industry in Canada (in effect since 30 October 2024) says related service agreements, such as equipment agreements with the processor, cannot run longer than your main processing agreement. When you exit under the Code (for example, after a fee increase), cancellation takes effect once you have met outstanding obligations, such as returning rented equipment. A lease with an independent leasing company may not be covered by these protections. Read contract length and early termination fees and merchant rights under the Code.
Compatibility and support
A purchased terminal is only cheaper if you can keep using it. Check:
- Processor lock: is the device programmed for one processor only? Can it be re-programmed if you switch, and at what cost?
- Security support: card terminals must meet payment security standards (PCI PIN Transaction Security). Devices reach an end of approval and must then be replaced. Ask when support ends.
- Features: Interac contactless, chip and PIN, mobile wallets, tipping, receipt printing, and connection type (Wi-Fi, Ethernet, cellular).
- Repairs: is there a warranty, and how long does a replacement take?
- Integration: does it work with your POS software?
Taxes and accounting
Terminal purchases and rentals are generally taxable for GST/HST (and QST or PST where applicable). Registrants can usually claim input tax credits. A purchased terminal is generally a capital asset for income tax; rental payments are generally deductible expenses. See GST/HST on processing fees and terminals.
Decision checklist
- Expected use: how many years will you keep this processor and this device?
- Cash: can you pay upfront, or is a monthly fee easier?
- Risk: would a broken terminal stop sales, and would a rental swap be faster?
- Exit: what happens to the device if you switch processor?
- Paper: is any part of the deal a separate lease? What is the total of all payments?
Compare terminal options as part of a full quote, using the quote comparison checklist.
FAQ
Can my processor make me rent its terminal?
Processors can require compatible equipment. Whether you can bring your own depends on the processor. Ask, and compare the total cost of the package.
What happens if I do not return a rented terminal?
Agreements often include a non-return fee. Return equipment the way the agreement requires and keep proof of delivery.
Are cheap card readers secure?
Readers sold by established processors are designed to meet payment security standards. Avoid second-hand devices of unknown origin.
Sources
- Financial Consumer Agency of Canada — Code of Conduct: related service agreements and cancellation
- PCI Security Standards Council — PIN Transaction Security device standards
- Canada Revenue Agency — GST/HST and capital cost allowance
- Competition Bureau Canada — misleading representations in sales
