Stuck in a card machine contract? Your options

The short answer

Being in contract rarely means being stuck for good. First find out exactly what you are tied to and until when. Then you can wait for the renewal window, ask your provider to improve its terms, move to a new provider and have the exit cost looked at as part of the switch, or, if something went wrong when you signed, make a complaint. Which route is best depends on your agreement and what it would cost you to stay.

This guide is general information, not legal advice. If you are unsure what your agreement means, take advice before acting.

Step 1: find out what you are actually tied to

Before anything else, gather every document you signed and your latest statement. You are looking for:

• How many agreements there are. Card processing and the terminal rental are often separate, sometimes with different companies.
• The end date or renewal date of each, and the notice period.
• What leaving early costs: remaining rental, a termination charge, equipment charges. Our guide to card machine contracts and exit fees lists the usual items.
• What you pay now: use our guide to reading your card machine statement to work out your effective rate.

If you cannot find the paperwork, ask your provider for copies. They should be able to supply them.

Option 1: wait for the renewal window, and plan for it

If the end date is not far off, the cheapest route can be to wait. The risk is missing the notice window and rolling on. Put the notice deadline in your diary, send your notice in the way the agreement requires, keep proof that you sent it, and ask for a new provider's quote in good time, so the new terminal is ready when the old agreement ends.

Under Payment Systems Regulator rules, terminal rental contracts with the largest providers are limited to 18 months and then roll month to month with at most a month's notice. Check whether this applies to your provider.

Option 2: ask your current provider to improve the deal

Providers would often rather keep a customer than lose one. With your statement in hand, ask for a lower rate, a lower fixed fee or the removal of a charge you think is unfair, and ask what they would charge to let you leave early. You may or may not get anywhere, but it costs nothing and it gives you a figure to compare.

Option 3: switch, and let us look into the exit cost

If staying will cost you more than leaving, switching can still make sense. Send us your latest statement and your agreement and let us look into it and find you a saving. In most cases, subject to approval, we can help with your exit or termination fee. It is not guaranteed, so we confirm what applies to you before you decide, and if you are already on a great deal we tell you straight. You can normally keep your old machine working until the new one is set up. If you repay a business cash advance from your card sales, tell us before you switch, because the repayments are collected through your current card processing. Our guide to switching card machine provider walks through the steps.

Option 4: complain, if something was wrong when you signed

If you think you were given wrong or incomplete information, such as a rate that was not what you were told, a charge nobody mentioned or a contract described as something it was not, raise it with the provider in writing first. Say what you were told, when and by whom, what happened, and what you want. Keep copies of everything. If you are not satisfied with the response, a small business may be able to take the complaint to the Financial Ombudsman Service, depending on its size and the service involved. Check the Ombudsman's current eligibility rules before relying on this.

What not to do

• Do not just cancel the Direct Debit. You will usually still owe the money, and it can lead to collection letters and problems with your business credit file.
• Do not stop using the account without giving notice. The agreement can carry on and the charges with it.
• Do not ignore letters or emails about renewal, changes to fees or termination.
• Do not hand back the terminal without a record of when and how it was returned.
• Do not sign a new agreement before you know what you owe on the old one.

Which route is right for me?

• End date is close: wait, give notice properly and line up the new provider.
• End date is far away and you're paying a lot more than you need to: ask for a settlement figure, then compare the cost of leaving with the cost of staying.
• The service is poor or the terms changed: write to the provider and see what they offer. Then consider switching.
• You think you were misled: complain in writing and keep every record.

Common questions

Related

• Card machine contracts and exit fees explained
• How to switch card machine provider
• How to read your card machine statement
• Card machine rental: what to check
• PayZu pricing