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Getting out of a Bad Payment Services Contract

Posted on January 24th, 2017
Payments Services Contract

You’re being charged too much for your merchant services account, and you know it. But you’re afraid to cancel because you’ve realized that doing so would come at the high cost of paying a big fat early termination fee–something you may not have even been aware of when you signed the contract, because it was hidden in the fine print on page 32 of that stack of paper they shoved across your desk. If you’re no longer satisfied with your payment services provider, you probably want to switch to a new one as quickly as possible. Do you have to pay a penalty just because you want a new provider? Not necessarily. Here’s are some ideas on how you may be able to get out of a bad merchant services contract and hopefully avoid that early termination fee.

Look Carefully For Unexpected Costs

If you’ve just signed up for a merchant services account and the costs are already more than you were expecting, you may be able to get out of your contract without paying an early termination fee if you can prove that you were lied to. Do you have anything in writing (email counts!) in which an agent claimed that you’d only be paying a certain amount–but the bill ended up being a lot more? That’s definitely to your advantage. If, on the other hand, you’ve been with your merchant services provider for a while now, take a close look at your statements for the last three months. If any of your costs have been increased, the law of most states (and the language of most contracts) says that you can get out of your contract without having to pay the early termination fee. Since the time frame for cancellation on these terms is somewhere between 30 and 90 days, you’ll need to find out if your individual contract or the law in your state specifies how quickly you need to cancel.

Gather Evidence of a Breached Contract

If your merchant services provider hasn’t been living up to their promises, then you’ve got have the relevant documentation to prove it. If they initially promised you low fees and then raised your prices, you’ll want to have the initial quote in writing, digital or hard copy, as well as a copy of the prices that you’re currently being charged on an invoice or bill. If they have modified the terms of your contract to charge additional fees, to include fewer services, or to make your life more difficult in any way, you’ll want to have the signed copy of your original contract as well as the modified contract on hand. If they simply haven’t been providing you with the services that they promised, like 24/7 customer service, then you’ll want to have made some kind of record of the time you tried to get assistance but weren’t able to reach them. This doesn’t necessarily need to be official or even typed–as long as you’ve been keeping track of the situation, you’ll have more leveraged than you would if you were just relying on your memory.

Get Your Agent on Your Side

Maybe you really, really don’t like your agent at this point. If you feel like you were lied to, it’s not surprising that you’ve got hard feelings. But if you want to get out of your early termination fee, there’s a good chance that your agent is the one making the final call. If you calm down and prepare your rational, logical reasons why it makes sense for you to terminate your contract, then it’s more likely that you won’t have to fight an early termination fee so hard. Your agent may have the power to simply waive it or even reimburse it if it’s already been charged. If your agent is independently contracted, they’re even more likely to want to preserve your relationship; if they lied to you about contract provisions or fees associated with your contract, then you could take them to court. Don’t threaten them. Show respect and understanding, and you may come out on top without any unpleasantness whatsoever.


William Lipovsky

William Lipovsky

William Lipovsky owns the personal finance website First Quarter Finance. He began investing when he was 10 years old. His financial works have been published on Business Insider, Entrepreneur, Forbes, U.S. News & World Report, Yahoo Finance, and many others.

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