You may never need to leave your card processing provider. But if you're even thinking about it, the first thing to know is what leaving would cost. That answer usually sits in a clause that's easy to miss: the early-termination fee.
What is an early-termination fee?
It's a charge your processing agreement may set if you close the account before the contract term ends. Not every agreement has one. When there is one, it's in the paperwork you signed, even if nobody mentioned it.
Where do you find the clause?
Pull out your merchant processing agreement and look in these places:
- Headings like "Term and Termination," "Early Termination," "Cancellation" or "Liquidated Damages."
- The fee schedule or pricing page, which may list the fee next to other account fees.
- The terms and conditions. The page you signed often points to a longer document with the full terms. Ask for a copy if you don't have it.
- The equipment lease, if you have one. It can be a separate contract with its own term and cancellation rules.
If you can't find your agreement, ask your provider for a copy of everything you signed.
How can the fee be written?
Agreements word it differently. Some state a flat amount. Others describe a formula, for example one based on the months left in your term or on your past monthly fees. If the clause uses a formula, ask your provider to show you, in writing, what it would come to today.
What else in the agreement affects it?
- Automatic renewal. Some agreements renew for a new term unless you give notice during a set window. A renewal can mean the termination terms apply again.
- Notice rules. The agreement may say how you have to cancel: in writing, to a certain address, a set number of days ahead.
- Closing charges. Look for any other charges tied to closing the account or returning equipment.
What should you ask your provider?
- Is there an early-termination fee on my account, and where is it in my agreement?
- How is it calculated, and what would it be if I closed the account today?
- Does my contract renew automatically? When is my notice window?
- How do I give notice, and to what address?
- Does my equipment lease have its own cancellation terms?
- Are there any other charges when I close the account?
Ask for the answers in writing, and keep them with your agreement. If anything is unclear, talk to an attorney before you act. If you're comparing a new provider, our guide to questions to ask before you sign covers the rest of the contract, and our statement guide shows which fees to check each month.
Frequently asked questions
Where is the early-termination fee in a processing agreement?
Look under headings like "Term and Termination," "Early Termination" or "Cancellation," in the fee schedule, and in the longer terms and conditions. If you have an equipment lease, check it too, since it can have its own cancellation rules.
Does every processing agreement have an early-termination fee?
No. Not every agreement has one. When there is one, it's in the paperwork you signed, so ask your provider where it is and how it's calculated.
Can my processing contract renew automatically?
Some agreements renew for a new term unless you give notice during a set window. Ask your provider whether yours renews automatically, when the notice window is, and how to give notice.
Does closing my processing account cancel my equipment lease?
Not always. An equipment lease can be a separate contract with its own term and cancellation rules. Read the lease, and ask what canceling it would cost before you close your account.
How we approach it at Keepwell
When we review a statement, we explain every fee line in plain words. If you're weighing a change, we'll point out the questions to ask about your current agreement before you decide. With Keepwell, every fee and contract term is explained before you sign. A review can show whether another setup may cost you less. Results vary.
Want us to look at your statement? Upload it at keepwellpayments.com/upload for a free, no-obligation review.
Keepwell Payments, LLC is an independent payments agency, not a bank or payment processor. Each merchant account is set up with a payment processor we partner with and its sponsor bank, named in writing before you sign. Merchant accounts are subject to approval. Results vary by business. This article is general information, not financial or legal advice.