Restaurant POS TCO 3-year vs 5-year
Quote-shopping a single year hides the compounding processing line and the year-4 hardware refresh. The 5-year number is the honest buy lens.
On FSR defaults, 3-year TCO: Toast $86K, SpotOn $82K, Square $79K, Clover $80K. 5-year TCO with year-4 hardware refresh: Toast $156K, SpotOn $146K, Square $138K, Clover $158K (Clover compound from 36-48 month lease). Square wins on 5-year despite higher year-1 processing, because no compounding contract.
3% YoY processing escalation
Card-network interchange revisions, processor margin creep, and assessment increases drive processing cost up approximately 3% YoY. The calculator models this in the TCO toggle. Five years of 3% compounding adds approximately 15.9% to processing line by year 5.
Year-4 hardware refresh
POS hardware operational life is 4-6 years. A year-4 refresh on a 4-terminal FSR adds approximately $4,000-$6,000 in hardware cost (cash) or extends the financing line. Most 3-year TCO conversations leave this out.
Why Clover loses on 5-year
The 36-48 month lease compounds to 2x-3x cash plus the Fiserv processor lock-in restricts processing-rate negotiation Clover pricing · 2026-06-20. On 5-year TCO, Clover loses to Toast despite a competitive year-1 number.
Worked 5-year example: Toast on FSR defaults
Year 1: SaaS $3,912 + Hardware $1,872 + Processing $20,400 + VSF $960 + Hidden fees $240 = $27,384.
Year 2: Processing escalation +3% = $21,012. Hardware constant. Total $27,996.
Year 3: Processing $21,642. Total $28,626.
Year 4: Hardware refresh $3,120 + Processing $22,291. Total $32,395.
Year 5: Processing $22,960. Total $29,944.
5-year cumulative: approximately $146K. Toast quote on year-1 only: $27K. The 5-year is 5.4x the year-1 number, not 5x.