How does terminal leasing work?
Leasing is a three-party agreement involving the merchant, the MLS and a leasing company. The leasing company agrees to pay the MLS (either directly or through the acquirer) an upfront amount when the MLS installs its POS equipment at a merchant checkout. The amount paid covers the cost of the equipment, installation fees and sales commissions. The merchant signs a contract agreeing to make monthly payments to the leasing company over a period of time (a year, two years, etc.). One advantage for merchants is making smaller, monthly payments for the POS equipment instead of paying a large, lump sum. The MLS benefits from the immediacy of the commission collection process. Also, because merchants spread out payments, it might be easier for the MLS to steer them toward more sophisticated products (and higher commissions).
