How to Switch Card Machine Provider Without Losing Money
Switching card machine provider can save you hundreds of pounds a year, but done badly it can cost you exit fees, an extra month's rental or a Saturday with no way to take cards. The trick is doing things in the right order.
Here's a step by step guide to switching without losing money, based on how UK card machine contracts usually work.
Is it worth switching?
Start with the numbers. Pull your last three statements and add up everything you paid: transaction fees, rental, PCI fees, minimum charges and anything else. Divide by your card takings to get your real effective rate.
| Monthly card takings | Total monthly cost now | Effective rate |
|---|---|---|
| £5,000 | £120 | 2.4% |
| £5,000 | £85 | 1.7% |
| £5,000 | £60 | 1.2% |
If your effective rate is well above the published rates on the market, such as SumUp's 1.69%, Square's 1.75% or Dojo's 1.2% blended rate for businesses under £100,000 a year, it's probably worth looking around.
Then compare the yearly saving with the cost of leaving. If you'd save £400 a year but pay £300 to exit, it's still worth it, just less so.
Step 1: find your agreements
You may have more than one:
- A merchant agreement with the company that processes your payments.
- A terminal hire or lease agreement, which can be with a different company, sometimes a separate finance firm.
Each can have its own term, notice period and exit fees. Find both.
Step 2: check your dates and notice period
Look for:
- The start date and term, such as 12 or 18 months.
- Auto renewal. Many contracts roll into a new term if you don't give notice.
- The notice period. Often one to three months.
- How notice must be given. Email, post or a form in your account.
Put the key dates in your calendar.
Step 3: understand your exit fees
Exit fees vary a lot. Some contracts charge a fixed fee, others charge the rental for the rest of the term. Ask your current provider for a written statement of exactly what you'd pay to leave on a particular date.
The six month rule
Under the Payment Services Regulations 2017, a payment service provider generally can't charge a fee for ending a framework contract that has been in force for six months or more, and the notice period can't be longer than one month. Businesses that aren't consumers, micro enterprises or charities can agree to opt out of this, so check your contract. Terminal hire is often a separate agreement and may not be covered. This is general information, not legal advice.
Step 4: get quotes and compare like for like
Give each new provider the same information: monthly takings, average sale, card mix and the hardware you need. Then compare:
- Transaction rates on each card type.
- Fixed fees per payment.
- Monthly fees, rental and PCI.
- Contract length and exit fees.
- Payout timing.
Ask whether the new provider will help with your exit fees. Some do. Paymentsense, for example, says it covers exit fees up to £3,000. Get any offer in writing.
Our guide to merchant account providers explains the traditional options.
Step 5: set up the new provider first
Don't cancel anything yet. Open your new account, get approved and have the new card machine in your hands. Take test payments. Check your first payout arrives. Only then are you ready to switch.
Pay as you go providers such as SumUp and Square can often be set up in a day or two. Traditional providers can take longer because of checks.
Step 6: give notice in writing
Once the new machine is working, give notice to your old provider in the way the contract asks. Keep proof: a sent email, a recorded delivery receipt or a screenshot of the form. If you have a separate terminal agreement, give notice on that too.
Step 7: return the old hardware
If you rented the old machine, it'll probably need to go back. Some contracts charge if it isn't returned or is damaged. Ask how to return it and keep proof of postage.
Step 8: check your final statements
Watch your bank account for a couple of months. Make sure:
- The old provider has stopped taking fees.
- Any exit fee matches what you were told.
- Your final payouts from the old provider have arrived.
- Direct debits to the old provider have stopped.
If something's wrong, contact the provider in writing. If you can't resolve it, use their complaints process.
Common mistakes when switching
- Cancelling before the new machine works. You could be left without card payments.
- Missing the notice window. You may be tied in for another year.
- Forgetting the terminal agreement. It may carry on after the processing contract ends.
- Not returning the hardware. It can lead to extra charges.
- Comparing headline rates only. Look at total monthly cost.
- Trusting verbal promises. Get everything in writing.
Moving your data across
Switching isn't just about the card machine. If you use your provider's point of sale app, think about:
- Product lists. Many apps let you export products to a spreadsheet and import them into the new system.
- Customer lists. Export them if you can, and check you're allowed to use them under data protection rules.
- Sales history. Download reports for your accountant before closing the old account. You may lose access later.
- Gift cards and loyalty. Outstanding balances may not transfer, so plan how to honour them.
- Online links. Update payment buttons, invoices and booking pages that point to the old provider.
A switching timeline
| When | What to do |
|---|---|
| 3 months before your renewal date | Find your agreements and check notice periods |
| 2 to 3 months before | Get quotes and choose a new provider |
| 1 to 2 months before | Set up the new provider and test it |
| Before the notice deadline | Give notice in writing |
| On the switch date | Start using the new machine full time |
| Within a few weeks | Return the old hardware |
| 1 to 2 months after | Check final statements |
Switching from pay as you go
If you're on a no contract reader such as SumUp, Square or Zettle, switching is easy. Set up the new provider, start using it and stop using the old one. There's nothing to cancel, though you may want to close the old account. Old readers are usually locked to their provider, so keep one as a spare or recycle it.
FAQs
Can I switch card machine provider before my contract ends?
Yes, but you may have to pay exit fees. Check your contract and ask for a written statement of the cost.
How long does it take to switch card machine provider?
Setting up a new pay as you go provider can take a day or two. Traditional providers may take a couple of weeks. Plan ahead around your notice period.
Will I lose card payments while I switch?
Not if you set up the new provider first and only cancel the old one once the new machine works.
Do I have to return my old card machine?
If you rented it, usually yes. If you bought it, it's yours, though it'll usually only work with that provider.
Can a new provider pay my exit fees?
Some offer to. Get the offer in writing, including how and when it's paid.
What's the six month rule?
Under the Payment Services Regulations 2017, a provider generally can't charge you for ending a payment services contract that has run for six months or more. Larger businesses, meaning those that aren't micro enterprises or charities, may have agreed to opt out. Check your contract.
Should I tell my current provider I'm thinking of leaving?
It can help. Some providers will offer a better rate to keep you. Get any new offer in writing and compare it with your other quotes.