Card Machine Contract Length and Exit Fees in 2026: 18-Month Cap

LAST REVIEWED 2026-09-06

What is the difference between a terminal contract and an acquiring contract?

A terminal contract covers the physical card machine, often a lease. An acquiring contract covers the processing of payments. The 18-month cap applies only to terminal leases, not acquiring agreements. Providers may combine them, but legally they are separate.

When you sign up for a card machine, you may enter into two agreements: one for the hardware and one for the payment processing. The terminal lease is subject to the Payment Systems Regulator's 18-month cap for contracts signed since July 2023. The acquiring contract, however, has no such cap and can be longer. Providers often tie them together, but you should check the terms of each.

If you leave early, you may face separate exit fees for each. The acquiring contract may have a notice period, and the terminal lease may require you to pay the remaining rental. Understanding this distinction is crucial for budgeting and switching.

What is the 18-month cap on card machine contracts?

The Payment Systems Regulator introduced a cap on new POS terminal lease contracts in July 2023, limiting the initial term to 18 months. This applies to leases signed on or after that date.

Before this remedy, some terminal leases locked businesses in for longer periods, making it costly to switch providers. The cap aims to increase competition by reducing lock-in. However, the cap does not apply to acquiring contracts, which can still be longer. Also, the cap only applies to new contracts, not renewals or existing agreements.

If you are considering a new terminal lease, check that the initial term does not exceed 18 months. If it does, the provider may be in breach of PSR rules. You can also use the online quotation tools that providers must offer to compare terms.

What are typical contract lengths offered by UK providers?

Provider terms vary. The table below shows published contract terms for some major providers. SumUp, Zettle, and Square offer no contract, while takepayments offers 12 months and Barclaycard offers 18 months.

According to the table, SumUp, Zettle, and Square have no contract, meaning you can leave at any time without penalty. takepayments offers a 12-month contract, which is shorter than the 18-month cap. Barclaycard offers an 18-month term, with a monthly fee of £0 for the first 12 months, then £18 plus VAT for the remaining 6 months.

These examples show that contract lengths vary. Some providers may offer longer terms, but they must comply with the 18-month cap for terminal leases. Always check the specific terms before signing.

How are exit fees calculated on card machine contracts?

Exit fees are typically calculated as the remaining monthly fees under the contract.

However, the exact calculation depends on the provider. Some may charge a fixed cancellation fee, while others may require payment of the full remaining rental. The PSR's summary box should clearly state the exit fees. For acquiring contracts, exit fees may be based on the remaining term or a percentage of expected processing fees.

To understand your potential exit fee, review your contract's termination clause. Look for the 'early termination' section. If the fee seems excessive, you may have grounds to complain, especially if the provider did not clearly disclose it.

Do card machine contracts auto-renew and what notice must I give?

Many contracts auto-renew unless you give notice before the end of the term. Check your contract for the exact notice period.

Since July 2023, providers must send a trigger message before your contract ends, reminding you of the renewal and your options. If you do not respond, the contract may auto-renew for another term, but the renewal term cannot exceed 18 months for terminal leases.

To avoid unwanted renewal, mark the renewal date in your calendar and give notice in writing. Some providers allow notice via email or online portal. Keep a copy of your notice for reference.

Can I get a rolling monthly card machine contract?

Yes, some providers offer rolling monthly contracts with no fixed term. SumUp, Zettle, and Square are examples, as shown in the table. These contracts allow you to cancel at any time with no exit fee.

Rolling contracts are ideal for businesses that want flexibility. However, they may have higher monthly fees or transaction charges compared to fixed-term contracts. For instance, Barclaycard offers a free terminal for the first 12 months, but then charges £18 per month. A rolling contract might have a lower upfront cost but higher ongoing fees.

When comparing, consider your expected transaction volumes and how long you plan to use the machine. A rolling contract may be more cost-effective if you are unsure about your future needs.

What should I check before signing a card machine contract?

Before signing, check the initial term, exit fees, notice period, and whether the contract auto-renews. Also, verify that the provider has a summary box and that the terms comply with PSR rules.

Use the online quotation tools that providers must offer to compare costs. Look for any hidden fees, such as PCI compliance charges or paper statement fees. Ensure that the monthly fee is clearly stated and that any free periods are clearly defined.

If you are leasing a terminal, confirm that the initial term does not exceed 18 months. If you are signing an acquiring contract, check the notice period and any early termination charges. Keep a copy of the contract for your records.

Can I exit the card machine contract if the provider raises fees?

If your provider increases fees mid-contract, you may have the right to exit without penalty, depending on the terms. Check your contract for a 'variation' clause.

If the change is significant, you may be able to cancel without paying an exit fee. The PSR's remedies also require providers to send trigger messages, which may include information about fee changes.

If you believe the fee increase is unfair, you can complain to the provider and then to the Financial Ombudsman Service. The FOS can award compensation up to £455,000 for acts on or after 1 April 2019.

How do I switch card machine providers without being locked in?

To switch, first check your current contract's notice period and exit fees. Then compare offers from other providers using the online quotation tools. Ensure that your new provider offers a contract that suits your needs.

If you are within your notice period, give notice to your current provider. Once the contract ends, you can switch without penalty. If you are still in a fixed term, you may have to pay an exit fee, but this may be offset by savings from the new provider.

When switching, consider the terminal lease. If you are leasing a terminal, you may need to return it. Some providers offer buyout options. For more details, see the guide on Switching Card Machine Provider: Terminal Lock-In and the Step-by-Step Route.

What are the PSR remedies and how do they affect the contract?

The PSR introduced remedies in July 2023, including summary boxes, trigger messages, online quotation tools, and the 18-month cap on terminal leases. These remedies aim to make it easier for businesses to compare and switch providers.

Summary boxes must clearly show key terms, such as monthly fees and exit fees. Trigger messages must be sent before contract renewal, reminding you of your options. Online quotation tools allow you to compare prices from different providers.

These remedies apply to contracts signed after July 2023. If you have an older contract, these protections may not apply. For more information, see the article on PSR Card-Acquiring Remedies: Summary Boxes, Trigger Messages and Online Quote Tools.

Glossary: card payment terms explained

Acquiring contract: An agreement between a business and a payment processor to handle card transactions. It typically includes fees per transaction and may have a fixed term.

Terminal lease: A rental agreement for the physical card machine. Since July 2023, new leases are capped at 18 months initial term.

Exit fee: A charge incurred when terminating a contract early. Often calculated as the remaining monthly fees or a fixed cancellation amount.

Summary box: A clear, standardized presentation of key contract terms, such as monthly fees, exit fees, and notice periods, required by the PSR.

Trigger message: A notification sent by a provider before a contract auto-renews, reminding the customer of the renewal and their options.

Rolling contract: A contract with no fixed end date, allowing cancellation at any time with notice, often with no exit fee.

Checklist: what to check on a fee statement or contract

• Check the initial term of your terminal lease does not exceed 18 months.
• Review the exit fee clause to understand potential costs.
• Note the notice period required to avoid auto-renewal.
• Verify that the provider sends a trigger message before renewal.
• Compare offers using online quotation tools.
• Confirm that any fee increases are communicated in writing.

Each item above maps to a line that must appear in the PSR summary box or the contract schedule, so a missing entry is itself a question for the provider.

Frequently asked questions

What is the maximum card machine contract length?

For terminal leases signed since July 2023, the maximum initial term is 18 months. This cap was introduced by the Payment Systems Regulator. However, acquiring contracts are not capped and can be longer. Some providers offer rolling contracts with no fixed term, such as SumUp, Zettle, and Square. Always check the specific terms of your contract.

How are exit fees calculated?

Exit fees are typically calculated as the remaining monthly fees under the contract. Some providers may charge a fixed fee. The summary box should clearly state the exit fee calculation. Review your contract's termination clause for details.

Can I get a rolling contract?

Yes, several providers offer rolling monthly contracts with no fixed term. SumUp, Zettle, and Square are examples. These contracts allow you to cancel at any time with no exit fee. However, they may have higher monthly fees or transaction charges compared to fixed-term contracts. Consider your business needs when choosing.

Does the contract auto-renew and how much notice must I give?

Many contracts auto-renew unless you give notice before the end of the term. Since July 2023, providers must send a trigger message before renewal. To avoid auto-renewal, give notice in writing before the deadline. Check your contract for the exact notice period.

Can I exit if fees rise?

If your provider increases fees mid-contract, you may have the right to exit without penalty, depending on the terms. Check your contract for a variation clause. Providers must give notice of fee changes. If the change is significant, you may cancel without paying an exit fee. You can also complain to the Financial Ombudsman Service.