Renting or buying a chip and pin machine

It is impossible to run a retail shop in the UK without a chip and pin solution these days. Most small retailers have the option to either rent or buy when it comes it outfitting their business with a chip and pin solution.

Some chip and pin solution providers will make you buy the hardware - usually just a handset that plugs into the computer. They will then charge you a monthly service charge. On top of this, the banks will charge you a fee for each transaction. The monthly payment will normally be fixed for the term of the contract, however the transaction fees rely on a lot of facts, such as card type, and can be a bit of black art to predict.

The obvious attraction of buying the chip and pin devices is the reduction in the on going monthly cost compared to a rented solution. The main drawback is the reliability of a chip and pin machine. If a machine fails, you will have to buy another one, and therefore it is important to keep a spare - even if you are without chip and pin for a couple of days, it will dramatically effect the cash flow of a small retailer. It is sometimes difficult to find replacement units in a hurry.

It is also possible to pay a larger monthly fee and rent the hardware. This is my preferred option. If the chip and pin machine fails, and they frequently do, especially in dirty environments, your chip and pin solution provider will more than likely give you a 24 hour swap-out. This means that the correct device will turn up in the post the next day, all configured to work - you just plug it in. The chip and pin solution provider will hold a stock of replacement units

Regardless of renting or purchasing, your chip and pin provider will tie you into a monthly contract that normally lasts for at least 2 years, and more often than not 4 or 5 years.

Normally your retail solution provider will guide you into purchasing the correct chip and pin solution, however, bear in mind that the software provider will often be re-selling the chip and pin solution, and making a small profit on your monthly charges.

Regardless of whether you rent or buy a chip and pin machine, it is important to make sure that the solution you choose integrates with your EPOS retail software solution. Normally this is constrain the solution you choose to only one or two options. It is perfectly possible to use an unintegrated chip and pin solution with retail software, however, this mean you will have to rekey the amount into the device- leading to mistakes.