Mick Collins

The business side of sports has always interested me. Contracts are part of that, and very much in the news these days around the NFL. A contract between a team and a professional player makes sense. Both parties can negotiate safeguards and benefits. For example, opt outs and player options are very popular in Major League Baseball these days. Players can negotiate 'no trade' clauses that provide them leverage if things go south. Teams can utilize incentive clauses to avoid paying for underachieving performances on the field. On and on it goes.

In over 13 years, I have never seen an instance where a merchant services contract benefits the business owner. These contracts are one sided. What's the advantage to the Business owner? That the processor will process the payments, provide support? That should be a given.

No, the merchant doesn't benefit, they're literally locked in. There is almost always an early termination fee (ETF), a penalty for ending the contract early. That fee is usually prohibitive to a small business to pay in order to get out of a bad business relationship. The larger question is WHY SHOULD THEY?

Automatic renewals are very common as well, putting the onus on the business owner to cancel before that kicks in. Lastly, there are often hurdles put into place to cancel, even at the end of the initial contract, usually a written notice must be provided 30 days prior. Often, an email isn't enough, I helped one merchant close an account, we sent 3 signed forms by certified snail mail, separately to the processor.

One merchant I worked with had to wait out a contract, because there was no way she could pay the early termination fee. Her processor was literally recouping all of their lost revenue through the ETF. That processor required a 60 day and 30 day notice to cancel. Talk about jumping through hoops! The worst part was, she didn't know the fee to cancel or the requirement of the notices until she called, and yes there was an autorenewal in that contract.

For the record, Pay it Forward Processing has never had contracts or termination fees. Please consider me a resource, whether you know your situation with your current processor or not, if you don't let me help.