Card Machine Contracts Explained 2026: Terms, Exit Fees and Your Rights

Most card machine horror stories start the same way: a business signs on a busy afternoon, the rep's friendly, and two years later there's an exit fee nobody remembers agreeing to. Card machine contracts aren't complicated once you know what to look for. This guide walks through the terms UK providers actually use, what the law says about leaving, and the questions to ask before you put pen to paper. Provider details were checked on official UK websites in October 2026.

What a card machine contract covers

When you take cards with a traditional provider, you're often agreeing to two separate things:

1. A processing agreement with the acquirer, the company that handles your card payments and pays you. This sets your transaction rates, settlement times and chargeback rules.
2. A terminal agreement for the card machine itself. That might be a hire, rental or lease, sometimes with a different company from the acquirer.

takepayments, for example, says on its own support pages that customers sign one agreement with takepayments for the terminal and services and another with the acquiring bank it nominates, and get two separate bills. Knowing which agreement does what matters when you want to leave, because each can have its own notice period and fees.

App based providers such as SumUp, Square, Zettle and Revolut work differently. You buy the reader and accept online terms with no fixed term, so you can stop whenever you like.

Typical contract lengths in the UK

Exit fees and how they work

Exit or early termination fees are what you pay if you leave before the end of the term. They're usually worked out in one of three ways:

• Remaining rental: you pay the hire charges left on the agreement, sometimes all at once.
• A fixed fee: a set amount stated in the contract.
• Lost revenue: an estimate of what the provider would have earned. These are the ones to watch.

Some providers will cover exit fees to win your business. In October 2026 Dojo advertised a contract buyout of up to £3,000, and Paymentsense said it could pay exit fees up to £3,000 when you switch. Get the exact conditions in writing.

Your rights under the Payment Services Regulations

The Payment Services Regulations 2017 give some protection on the payment processing part of the deal. Under regulation 51, for a framework contract:

• you can end the contract at any time, unless you agreed a notice period of up to one month;
• termination charges must reasonably reflect the provider's actual costs; and
• the provider can't charge you for ending a framework contract once it's been in force for six months.

The catch is in regulation 40(7). If your business isn't a consumer, a micro enterprise or a charity, the provider and you can agree that these rules don't apply. A micro enterprise under the regulations has fewer than ten staff and annual turnover or balance sheet of no more than €2 million. Most small UK businesses fit that, but check.

Two more caveats. These rules apply to payment services, so a separate terminal hire or lease agreement may not be covered. And this is a summary, not legal advice. If a big exit fee is at stake, talk to an adviser.

Source: legislation.gov.uk, Payment Services Regulations 2017, regulations 40 and 51, checked October 2026.

Auto renewal

Many contracts roll on automatically at the end of the term, sometimes for another full year. Before you sign, find out:

• whether it renews monthly or for another fixed term;
• how much notice you need to give, and how (email, letter or portal); and
• whether your rate can change on renewal.

Put the notice date in your calendar the day you sign. It's the simplest way to avoid another year you didn't want.

Worked examples

These show why contract terms matter as much as rates. They're illustrations, not quotes.

£2,000 a month cafe on an 18 month hire. If the hire costs £20 a month and you close after six months, you could face 12 remaining months, or £240 plus VAT, depending on the agreement.

£10,000 a month shop switching for a better rate. Moving from 1.75% to 0.99% saves £76 a month. A £300 exit fee is paid back in about four months.

£30,000 a month restaurant. A 0.25% rate cut saves £75 a month, or £900 a year. That's worth negotiating hard for at renewal, even if you stay put.

Contract tips for different businesses

Cafe and restaurant

You'll probably want integrated terminals and fast support, which often means a contract. Negotiate the rate and terms, not just the hardware price.

Market stall

Avoid fixed terms if your trade is seasonal. Paying rental through winter can wipe out a summer's savings.

Hairdresser

A no contract reader keeps things simple. If you're offered a contract, compare the total yearly cost, not the headline rate.

Trades

If you only need cards for some jobs, a no contract reader or Tap to Pay on your phone avoids monthly costs.

Taxi

Check whether your licensing authority or operator has requirements before signing a long term deal for a terminal.

Red flags in a card machine contract

A few clauses deserve a second read before you sign:

• "Liquidated damages" or "loss of profit" on exit. This can mean paying an estimate of everything the provider would have earned for the rest of the term.
• A lease with a third party finance company. Some terminals are supplied on a lease from a separate finance firm. Leaving the card processor doesn't end the lease, and leases can run for several years.
• Rates "subject to review". If your rate can change at any time, a great quote today may not last.
• Minimum monthly service charges. You'll pay this even in a quiet month, so check it against your slowest month's takings.
• Notice by post only. Ask whether email is accepted. A posted letter that gets lost can cost you another year.
• Verbal promises. If a rep promises a free month, a matched rate or a paid exit fee, get it written into the agreement.

How to leave a card machine contract

1. Find both agreements. Check whether your terminal and processing are with the same company.
2. Check your dates. Note when each agreement started and its notice period.
3. Work out the cost. Ask each provider for a written statement of any exit charges.
4. Line up your new provider first. Make sure your new machine works before you cancel, so you don't lose a day's trading.
5. Give notice in writing. Keep proof of when you sent it.
6. Return the hardware if required. Rental machines usually have to go back, and some agreements charge if they don't.
7. Check your final statements. Make sure charges stop when they should.

If you think a fee is unfair

Ask the provider for its complaints procedure and set out your case in writing. If your business is a micro enterprise or small charity, you may be able to take a complaint about a payment service to the Financial Ombudsman Service once you've been through the provider's own process. Check the Ombudsman's website for whether your complaint is covered.

Checklist before you sign

1. Get the full schedule of charges, including PCI, minimum monthly charges and authorisation fees.
2. Ask how long the term is for each agreement, and who each is with.
3. Ask how exit fees are calculated, with a worked example.
4. Check auto renewal terms and notice periods.
5. Ask if your rate is fixed for the term.
6. Keep copies of everything you sign.

Our merchant account providers guide and PDQ guide explain the companies and kit behind these contracts.

Contracts at a glance: what each type suits

FAQs

How long are card machine contracts in the UK?

Commonly 12 to 18 months for traditional providers. Elavon and takepayments use 12 months; Worldpay's Simplicity offer has an 18 month hire. App based readers usually have no contract.

Can I get out of a card machine contract?

Usually, but you may pay an exit fee. If you're a micro enterprise or charity, the Payment Services Regulations 2017 stop a provider charging you to end a payment services framework contract after six months.

Why have I got two bills?

Because you may have separate agreements for the card machine and for card processing, sometimes with different companies.

Will a new provider pay my exit fees?

Some will. Dojo and Paymentsense both advertised paying up to £3,000 in October 2026. Check the conditions.

Do card machine contracts renew automatically?

Many do. Check the renewal and notice terms before you sign.

Is there a cooling off period on a card machine contract?

Business contracts don't generally come with the cooling off rights consumers get. Ask the provider whether it offers one.