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Card machine contracts in the UK are capped at 18 months for terminal leases signed since July 2023. Acquiring agreements have no cap, and early exit usually means paying remaining monthly fees. Always check your contract for notice periods and auto-renewal terms.
Since July 2023, terminal lease contracts are capped at 18 months, but acquiring agreements are not, and early exit usually costs the remaining monthly fees.
KEY FACTS
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LAST REVIEWED 2026-09-06
Terminal contract vs acquiring contract
When you take a card machine, you typically sign two separate agreements: a terminal lease or rental contract for the physical hardware, and an acquiring agreement for the processing of payments. These are distinct legal documents with different terms and conditions.
The terminal contract covers the device itself, including maintenance and support. The acquiring agreement is with a payment processor or merchant acquirer, and it sets out the fees for processing transactions, settlement times, and other commercial terms.
It is important to understand that these contracts are separate. You might have a terminal lease with one company and an acquiring agreement with another, or both with the same provider. The terms of each can differ significantly, and you must manage them independently.
For example, you may be able to exit your acquiring agreement with a notice period, but your terminal lease might have a fixed term with early termination fees. Conversely, you might have a rolling terminal contract but a fixed acquiring agreement. Always read both contracts carefully to know your obligations.
The 18-month cap
Since July 2023, the Payment Systems Regulator (PSR) has imposed a cap on the initial term of terminal lease or rental contracts for point-of-sale (POS) terminals. The maximum initial term is 18 months. This means that any new contract for a card machine terminal signed after that date cannot lock you in for longer than 18 months.
This cap applies to the initial term only. After the initial 18 months, the contract may continue on a rolling basis or you may be able to renew for another fixed term, but the initial commitment is limited.
The PSR introduced this measure as part of a package of remedies to make the card acquiring market more competitive and to reduce barriers to switching. The aim is to prevent merchants from being tied into long-term contracts that make it difficult to change providers.
It is important to note that the cap applies to terminal contracts, not to acquiring agreements. Acquiring agreements are not subject to a similar cap, so they can have longer initial terms, although many providers offer rolling contracts.
Typical contract lengths by provider
While the 18-month cap applies to terminal leases, providers may offer shorter terms or rolling contracts. Typical contract lengths vary. Some providers offer 12-month or 24-month terms for acquiring agreements, but terminal contracts are now capped at 18 months for new agreements.
For acquiring agreements, you might find terms of 12, 24, or even 36 months, but these are not capped by the PSR. However, many providers now offer rolling monthly contracts with no fixed term, which give you more flexibility.
It is essential to check the specific terms of your provider. The table below summarises typical contract lengths for major providers, but you should always confirm with the provider directly.
Remember that the 18-month cap applies to terminal contracts signed since July 2023. If you signed a contract before that date, it may have a longer term, but you should check the terms of your agreement.
How exit fees are calculated
Exit fees are typically calculated based on the remaining term of your contract. For a fixed-term contract, if you leave early, you will usually be required to pay the remaining monthly fees for the terminal or the acquiring service, or a proportion of them.
For example, if you have a 24-month acquiring agreement and you leave after 12 months, you might have to pay the remaining 12 months of monthly fees. Some providers may charge a fixed termination fee instead, but this is less common.
For terminal contracts, the exit fee is often the remaining rental payments. If you have a 18-month terminal lease and you terminate after 6 months, you may owe the remaining 12 months of rental.
It is important to read your contract to understand the exact calculation. Some providers may also charge a fee for returning the terminal or for administrative costs. Always ask for a breakdown of any exit fees before you sign.
Auto-renewal, trigger messages and notice periods
Many card machine contracts contain auto-renewal clauses. This means that if you do not give notice before the end of the initial term, the contract will automatically renew for another fixed period. The PSR has introduced requirements for providers to send trigger messages to remind you that your contract is coming to an end.
Since July 2023, providers must send you a message between 40 and 80 days before your initial term ends, reminding you of the renewal date and your options. This is designed to help you avoid being locked in unintentionally.
Notice periods vary by provider. Some require 30 days' notice, others 60 days. It is crucial to know your notice period and to act in time if you wish to switch or cancel.
If you do not give notice, your contract may auto-renew for a further fixed term, which could be up to 18 months for a terminal lease. Always check your contract for the auto-renewal terms and set a reminder to review your options before the notice deadline.
Rolling monthly options
Many providers now offer rolling monthly contracts for card machine services. These contracts have no fixed initial term, so you can cancel with a notice period, typically 30 days. This gives you the flexibility to switch providers without incurring early exit fees.
Rolling contracts are available for both terminal rental and acquiring services. They are particularly attractive for small businesses or seasonal businesses that may not want to commit to a long-term contract.
However, rolling contracts may have higher monthly fees than fixed-term contracts, because the provider takes on more risk. You should compare the total cost over the period you expect to use the service.
If you value flexibility, a rolling contract might be a good option. But if you are happy to commit for a longer period, you might save money with a fixed-term contract. Always consider your business needs and cash flow.
Negotiating before you sign
Before you sign any card machine contract, it is wise to negotiate the terms. Many providers are willing to offer better rates or more flexible terms to win your business.
You can negotiate the length of the contract, the monthly fees, the notice period, and the exit fee structure. For example, you might ask for a rolling contract instead of a fixed term, or a shorter initial term.
You can also ask for a waiver of exit fees if you need to leave early for reasons such as business closure. Some providers may agree to a reduced exit fee if you negotiate.
Always get any agreed terms in writing before you sign. Do not rely on verbal promises. Read the contract carefully and make sure you understand all the terms, including any auto-renewal clauses and notice periods.
Remember that the PSR's 18-month cap applies to terminal contracts, but you can still negotiate for a shorter term or a rolling contract. It is in your interest to shop around and compare offers from different providers.
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Disclaimer. This guide is editorial information drawn from primary sources. It is not financial, legal or tax advice and does not recommend any provider. Figures are those published by the named sources on the review date and may change. Kael Tripton Ltd receives no commission, referral fee or lead payment from any provider named on this page. |
Frequently asked questions
What is the maximum card machine contract length?
For terminal lease or rental contracts signed since July 2023, the maximum initial term is 18 months, as set by the Payment Systems Regulator. This cap applies only to the terminal contract, not to the acquiring agreement. Acquiring agreements can have longer initial terms, but many providers offer rolling monthly contracts. Always check the specific terms of your contract.
How are exit fees calculated?
Exit fees are typically calculated as the remaining monthly fees for the duration of the contract. For example, if you have a 24-month contract and leave after 12 months, you may owe the remaining 12 months of fees. Some providers may charge a fixed termination fee, but this is less common. Always read your contract to understand the exact calculation and ask for a breakdown before signing.
Can I get a rolling contract?
Yes, many providers offer rolling monthly contracts with no fixed initial term. These allow you to cancel with a notice period, typically 30 days, without incurring early exit fees. Rolling contracts may have higher monthly fees than fixed-term contracts, but they offer flexibility. You can negotiate for a rolling contract before signing.
Does the contract auto-renew and how much notice must I give?
Many card machine contracts contain auto-renewal clauses. Since July 2023, providers must send a trigger message between 40 and 80 days before your initial term ends. Notice periods vary by provider, often 30 or 60 days. If you do not give notice, your contract may auto-renew for another fixed term. Check your contract for the exact notice period and set a reminder.
Can I exit if fees rise?
If your provider increases fees, you may have the right to exit without penalty, depending on the terms of your contract. Some contracts include a clause allowing you to cancel if fees are increased. However, this is not automatic. You should check your contract for any such provision and contact your provider to discuss your options.
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