How to end a card machine contract
Your card machine and your card processing can be two separate contracts, with two separate end dates. Knowing which is which is the first step to leaving either one without a nasty surprise.
Two contracts, not one
One covers the machine, if it’s rented, hired or leased.
The other covers processing: the fees on every payment you take.
They can be with different companies. They can end at different times, with different notice periods and different costs to leave. Ending one doesn’t end the other.
Rented, hired, leased or bought
There are a few ways to have a card machine, and each one has its own way out.
- Rented or hired. You pay a monthly charge for the machine, under a rental or hire agreement.
- Leased. A finance agreement for the machine, sometimes with a separate leasing company, for a fixed term.
- Bought. You own it, so there’s nothing to cancel for the machine itself. The processing agreement still has its own terms.
How to tell which one you have
- The paperwork. Look at what you signed when the machine arrived. Words like rental, hire or lease are the clue, along with the name of the company.
- Your bank statement. A separate direct debit for the machine can mean someone else bills it.
- Your card machine statement. A terminal rental line means the machine is billed with your processing. No such line can mean it’s billed somewhere else.
What leaving early can cost
Leave before the minimum term ends and there may be a fee to pay. It might be called an early termination fee, a cancellation fee or an exit fee.
The Payment Systems Regulator has rules for card machine rental and lease contracts arranged through the biggest card processors. For smaller businesses, the rules limit how long the first term can be. Any exit fee has to be based on cost, and explained to you before you sign.
Two catches. The rules don’t reach a machine you hired from a company with no link to your card processor. And contracts signed before the rules came in can run longer.
Watch the end of the first term
When the first term ends, a contract can roll on, sometimes onto standard terms.
Seen a message on your bill or in your online account saying you can shop around or switch? That’s a rule, not spam. The biggest providers have to send them, so you get a chance to check the deal. It’s your cue to look.
Four questions for each contract
Ask these about the machine and about the processing, separately:
- Who is it with?
- When does the minimum term end?
- What notice do I need to give?
- What does leaving cost, and how is that worked out?
Find both bits of paper. Put both dates in the diary.
If you switch, end the old agreement too
The new machine arriving doesn’t end the old agreement. You do.
Give notice the way each contract asks, and keep a copy. If the old machine was rented, send it back the way the contract says. Then check your bank statement for the next couple of months, to make sure the old charges have stopped.
Sometimes staying put is the right answer
If leaving costs more than staying, the sums say stay. When I review a statement and that’s the answer, I say so.
For the rest of the statement, see how to read your card machine statement.