The upfront hardware cost is the smallest number in most POS contracts. The processing rate and the lock-in terms matter far more.

Point-of-sale contracts tend to get evaluated on hardware cost — the price of the terminal or tablet setup — when that's typically the smallest number in the whole arrangement. Processing rates and contract terms, which apply to every single transaction for years, matter far more to the total cost of running the system.

Processing rates aren't all structured the same way

Some providers charge a flat percentage per transaction; others use tiered rates that vary by card type, with premium rewards cards costing more to process than basic debit. A system with a slightly higher flat rate can end up cheaper overall than one with a lower advertised rate that jumps significantly for the card types your customers actually use — worth asking for the full rate schedule, not just the headline number, before comparing.

Contract length and exit terms

Multi-year contracts with early termination fees are common in this space, and they matter more than they seem like they should at signing, because switching POS systems later — after staff are trained and your inventory data is built up in one system — carries real friction. It's worth checking cancellation terms up front rather than assuming you'll never want to switch.

What to actually compare

Line up the full processing rate schedule across card types, monthly software fees on top of processing, contract length, and early termination terms, before hardware cost. For a business doing meaningful transaction volume, a half-percent difference in processing rate adds up to real money over a year — far more than most hardware price differences ever do.