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A lower card processing rate can be tempting, but what are you agreeing to in return? Before signing, you need to know how long the contract lasts, whether it renews automatically and what it would cost to leave. The terminal may come with a separate agreement too.
This guide explains what Irish business owners should check in a merchant services contract before signing, renewing or switching providers. It covers the commercial questions to ask your card processing provider; unclear legal terms should go to a solicitor.
Get the full agreement
Ask the card processing provider for the application form, full terms and conditions, complete fee schedule and any documents the agreement refers to. Once you've signed, keep a copy of the final versions together.
Your terminal, payment gateway or ecommerce service may have separate terms. Read those alongside the main agreement. If something a salesperson promised matters to your decision, ask them to confirm it in writing.
Check that the documents agree with each other. If the fee schedule says one thing and an appendix says another, ask the provider which wording applies before you sign.
Keep a short note of the provider's name, start date and terminal arrangement, along with the written answers to your questions. That gives you something to refer back to if a charge or obligation is disputed later.
Check the dates and the cost of leaving
Ask the provider to confirm when your initial contract term ends, whether it renews automatically and how to cancel. Get the notice period and the required cancellation method in writing. Don't assume a phone call is enough if the contract specifies another method.
Read how any early termination charge is calculated. It could be a fixed amount, a charge that changes over time or a sum based on the months and fees remaining. Ask the provider to explain the calculation for your agreement.
Use the dates and terms in your own contract when planning a switch. Once the provider confirms your notice deadline, put it in your calendar.
Find out who owns the terminal
Check whether you're buying, renting or leasing the terminal, and which company supplies it. The hardware agreement may run separately from your card processing service.
Look for the length of the commitment, the return process and the replacement terms. You should also know who is responsible if the terminal is lost or damaged.
If another company supplies or finances the equipment, closing the processing account may not end your payments for the hardware. Ask the terminal supplier to confirm in writing what you would still owe if you ended the card processing service, and whether you would need to return the terminal.
Look beyond the percentage rate
Request a breakdown from the card processing provider of every charge that could apply to your business. Alongside transaction rates, check for monthly minimums, terminal costs, gateway fees and authorisation charges. There may also be charges for statements, chargebacks or security requirements.
Providers don't all charge for the same things. Ask each one to work through an example using your normal card turnover and number of terminals. Give them the same recent statement, card mix and average transaction value so you can compare the quotes fairly.
Check the clause about changes to prices or terms as well. Find out how the provider will notify you and what options you have if you don't want to accept a change.
Check what you and the provider are responsible for
The agreement should explain who handles PCI DSS validation and what you need to do. Check the chargeback process too, including the evidence you must provide and the deadline for responding.
Read when the provider can hold funds or apply a reserve. These terms can affect when money reaches your account, so ask for an explanation of anything you don't understand.
Make sure the person who reconciles your account has this information. If a clause could create a significant legal or financial commitment, get qualified advice before agreeing to it.
Questions to put to your card processing provider
Before you sign, ask the provider to answer these questions in writing. If a separate company supplies the terminal, send the terminal question to that company too.
- How long am I committing to, and will the contract renew automatically?
- How much notice do I need to give to cancel, and where should I send it?
- What would you charge me if I ended the contract early? Please show me the calculation.
- Is the terminal covered by a separate agreement, and what would I still owe if I stopped using the card processing service?
- What charges would apply to my business beyond the transaction rate?
- If you change your prices or terms, how will you notify me and what options will I have?
Keep the answers with your contract. If the wording is unclear or the commitment is significant, ask a solicitor to review the agreement.
For help comparing providers and their charges:
