Contracts can have great benefits for credit card processing companies, but they aren’t the best idea for merchants looking for affordable ways to accept credit card payments. Before you get locked into a processing contract, consider these three reasons to choose a no-contract option.
1 – Termination Fees
When you sign a contract with a credit card processing company, you will be notified of the contract’s early termination fees. Companies charge these fees because they make you less likely to shop around for better rates on your credit card acceptance fees. Many merchants don’t want to pay a hefty fee to switch processors, so they accept higher rates for processing each payment at POS. A no-contract processor won’t charge you a termination fee, making it more affordable to accept credit card payments for your business.
In addition, if you don’t check the fine print of your contract, you may find that the agreement automatically renews itself at the end of the term. This means you never have the option to shop around for a better provider, without having to pay exorbitant fees.
2 – Rate Creep
Signing a contract means that you the business owner are locked in, but the dirty little secret is that your rates are not locked and can change during your contract. So your rates will probably increase while you’re under contract and you can’t escape the contract without paying a huge termination fee. That’s simply not a good deal for the business owner.
3 – Tricky Wording
You may not realize that you are signing a legally binding contract when you hire a credit card processing company. The wording usually refers to a “Merchant Services Agreement,” and many of the details regarding renewal, termination fees, and other contractual obligations are hidden in the fine print, so you may not know what you are agreeing to when you sign.
No-contract processing allows you to accept credit card payments without worrying that you’re tying yourself to a company that will try to charge as much as possible to deliver processing services to your business. Make sure to do your research before you sign on the dotted line.
Leap Payments if a leading provider of Smart card and NFC terminals and offers no contract services. If you are looking to upgrade your payment infrastructure, contact Leap Payments today.
