Many businesses, when they first sign up for a credit card merchant account, opt to buy the least costly equipment to minimize their startup costs. When this equipment appears to work years later, this can seem like a wise decision. However, it may still be time to consider upgrading or replacing your equipment.

But if it works, why replace it? Well, for starters, your credit card processing equipment may not be working as well as you think.

Unbeknownst to you, your terminal may literally be dropping transactions. You can tell if this is happening by comparing your monthly merchant account statement to your credit card receipts. Taking the time to do so can be an eye-opening experience.

Even if your terminal is not losing charges, the transactions may be more costly than they need to be. Rather than chalking it up to customers with faulty cards, it is more likely that you have a malfunctioning card reader.

Manually entering a credit card number is not only inconvenient, but also more costly. Credit card processors typically charge half a percent or more for keyed-in transactions than for swiped charges. If you find that more than one percent of your transactions require entering, you can probably see an immediate improvement in your profitability by replacing your equipment.

Checking out your latest options can also help grow your sales. The pool of available non-cash transactions has broadened greatly in the past few years. In addition to credit cards, merchants can now take checks, debit cards, and checks. And now, there is the smart card. If your equipment is dated, you may not be equipped to handle one or more of these forms of payment, and potentially lose these sales altogether.

How much will it all cost? If you have no plans to accept debit cards, a plain vanilla terminal will cost about $300 for a new model. With one of those models, you will be able to process credit cards and some checks. Adding a PIN pad so you can accept debit cards and all types of checks will double your cost. And if you want an integrated printer, add an additional $250 to $400 depending on whether you go for a low or high-speed printer.

Smart card compliant-terminals are available as well. Expect to pay about $1100 for an all-in-one unit that includes the terminal, printer, PIN, and smart card acceptance. If you have relatively new equipment, you may also be able to modify it with a smart card reader.

Many vendors offer this equipment. Look to do business with one that is a registered ISO (Independent Service Organization) or MSP (Merchant Service Representative) and lists the issuing bank that they represent. That way, you will have someone to turn to should your business dealings go awry.

No matter where you end up getting your equipment, make sure it is compatible with your processor. Otherwise, you may find that while you may be able to swipe a card, you will not be able to close the sale.