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How To Get Out of Your Processor’s Contract

By February 4, 2020 April 21st, 2020 No Comments

What do you do if you aren’t with us and stuck in a contract?

Often one of the most dreaded tasks for a business owner is to cancel their current merchant account and somehow escape the early termination fees.

Time and time again merchants are surprised to find out there is an early termination fee (ETF), which was usually not disclosed at the time of their enrollment, in addition to the ever-evolving terms and conditions of service. Unfortunately, some people do not read the fine print or updated terms. When they accept payment after receiving an updated notice, it is taken as a new agreement to whatever those terms may be, whether an added time frame, rate increase or additional termination clauses.

2 Simple Steps Save Hours Of Headache

  1. Do Your ResearchI know that merchant services are a cringe word for business owners. There will always be a horror story or a bad representative that can tarnish it for everyone else. Knowing who you are going to be working with is very important. Because of the constant changes in the processing world, our reps are training weekly to stay up to date in all areas.
  2. Know the EXACT terms of your agreementWe have all been told to never sign anything without reading it and fully understand the document. We also ignore that advice for a large chunk of things. Looking at a 12 page, small print, legalese paper brings a wave of anxiety and stress, so instead, we will sign it because we know we need to. Ever heard “stop to smell the roses”? The same thing, just for important business decisions, sounds like it common sense, but when it comes down it, we know we all have room to improve.

Why does it matter?

Flat Fees – A flat fee is just that, a flat rate to be charged upon cancelation, it can have a wide range but usually starts out at a few hundred dollars.

Liquidated Damages – This type of fee can be extremely expensive. This is the type of fee is based on losing revenue for the processor. So for example, if you were to cancel a 2-year agreement one year into it, you would be responsible to pay for the remaining years worth of processing fees.

Here’s How To Get Out:

If the processor changes their terms it can void your agreement IF you don’t continue to process with them. Remember, that the first transaction processed is considered an agreement.

— Look for “material” changes. This is usually defined as a change that affects the obligations of the parties or the meaning of the document. A rate increase can be sufficient to terminate the contract without incurring a penalty.

–Look for language that states no cancellation fee will be incurred if terms are changed. Then know exactly what to do to use it for your benefit. There are other companies who will auto-renew your agreement if they do not receive anything in writing within 30-60 days.

— Read your statement to see if fees have increased within the last 3 months. Some states have laws that state if your fees have been raised at any time during your contract, you can cancel within a certain period and avoid ETF.

— If you were to go out of business before the contract expires, some contracts will waive the ETF. If you are ever in that type of situation a simple phone call to your processor with an explanation may be in your best interest to either have it taken off, or minimized.


Some merchants will try to avoid payment, close the associated bank accounts and dodge calls. It is far better to try to work with your processor and come to some type of arrangement, think honey, not vinegar. That same contract is also designed to protect the processor and they will have legal rights too. Worst-case scenario, it damages your credit or prevents you from obtaining another merchant account. You are legally responsible for those fees even if you want to cancel your contract.

Because of our Platinum Guarantee, you don’t have to worry about term-based contracts when you are processing with us.


Author Platinum-payments

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