Card Machine Contracts, Exit Fees and Switching in 2026: 18-Month Cap

LAST REVIEWED 2026-09-06

What are the two contracts in a card machine agreement?

When you take a card machine, you typically sign two separate contracts: one for card acquiring (processing payments) and one for the terminal (hardware lease or purchase). The acquiring contract covers transaction fees and settlement, while the terminal contract covers the device itself, including rental or lease terms.

These contracts are distinct and can have different lengths and termination conditions. For example, an acquiring contract might run for 24 months, while the terminal lease is capped at 18 months under PSR rules. It is essential to review both documents to understand your obligations. The table below shows that providers like Barclaycard offer a 12-month fee-free period on their acquiring contract, but the terminal lease is separate.

When switching, you must consider both contracts. If you cancel one but not the other, you may still owe fees. Always check the termination clauses in each agreement.

How does the 18-month terminal cap work?

Since July 2023, the Payment Systems Regulator (PSR) requires that new point-of-sale terminal lease contracts be capped at 18 months. This means a provider cannot lock you into a terminal lease longer than 18 months. This cap applies to new contracts signed after that date.

Now, after 18 months, you are free to switch without penalty. However, this cap does not apply to acquiring contracts, which can still be longer. For example, a provider might offer a 24-month acquiring contract with a separate 18-month terminal lease.

When you sign up, ask for a summary box that clearly states the contract length. The PSR also requires trigger messages before renewal, reminding you of your options. This gives you control over your contract.

What are trigger messages and summary boxes?

They remind you that your contract is ending and explain your options, such as switching or renegotiating. Summary boxes are standardized documents that show key terms like contract length, notice period, and exit fees.

These are part of the PSR remedies introduced in July 2023. The aim is to make it easier for businesses to compare offers and avoid unexpected rollovers. For example, if your terminal lease is ending, you should receive a trigger message with a summary box. This allows you to decide whether to continue or switch.

Always keep these documents. They are evidence if a dispute arises. If you do not receive a trigger message, you may have grounds to cancel without penalty.

What are early termination fees and how are they calculated?

Early termination fees are charges you pay if you cancel a contract before its agreed end date. For acquiring contracts, these fees are often based on the remaining months of the term multiplied by a monthly fee. For terminal leases, the fee might be the remaining rental payments plus a return or buyout cost.

Under the PSR cap, terminal leases cannot exceed 18 months, so maximum termination fees are limited. However, acquiring contracts can be longer, so fees can be higher. For example, if you have a 24-month acquiring contract and cancel after 12 months, you might owe 12 months of fees.

Always check the summary box for exit fees. Some providers charge a flat fee, while others calculate based on remaining term. The table above shows that Barclaycard charges £18 per month after the initial 12 months, so early termination could be significant.

Do I own the card terminal or is it locked in?

Terminal ownership depends on your contract. Some providers sell terminals outright, while others lease them. If you lease, you do not own the device until the lease ends or you pay a buyout fee. The PSR cap of 18 months limits how long a lease can last, but you still need to return the terminal at the end.

Some providers offer 'free' terminals as part of a longer acquiring contract, but this often means you are locked in. For example, a provider might give you a terminal for free if you sign a 24-month acquiring contract. In that case, the terminal is not yours until the contract ends.

Check your contract for a 'terminal ownership' clause. If you want to own the terminal, look for providers that sell hardware outright, like Zettle, which charges £29 for a card reader. This avoids lock-in.

How do I switch card machine providers step by step?

Switching providers involves several steps. First, review your current contracts to identify the end dates and any exit fees. Second, compare new providers using the table above, focusing on rates, monthly fees, and contract lengths. Third, sign up with the new provider, but do not cancel the old contract until the new service is active.

When you sign up, the new provider may offer to handle the switch, but you must give notice to your old provider. If you are within the 18-month terminal cap, you can switch without penalty after that period.

Ensure your new provider can integrate with your existing systems. Test the terminal before cancelling the old service. Keep records of all communications.

What if a provider will not release me from a contract?

If a provider refuses to release you, first check your contract and the PSR rules. If your terminal lease is over 18 months, it is invalid under the cap. If you did not receive a trigger message, you may have grounds to cancel. Write to the provider formally, citing the PSR remedies.

If they still refuse, you can complain to the Financial Ombudsman Service (FOS). The FOS can award up to £455,000 for complaints about acts on or after 1 April 2019. This is a significant amount that can cover losses.

Keep all evidence, including contracts, messages, and bills. The FOS will review your case. Many providers will release you once they know you are aware of your rights.

What is the complaints route for card machine disputes?

If you have a dispute with your card machine provider, start by complaining directly to them. They must respond within 8 weeks. If they do not resolve the issue, you can escalate to the Financial Ombudsman Service (FOS). The FOS is free and independent.

Since April 2026, the FOS can award up to £455,000 for complaints about acts on or after 1 April 2019. This covers most business disputes. You must complain within 6 years of the event or 3 years of becoming aware of it.

Provide all relevant documents, such as contracts and correspondence. The FOS will investigate and make a binding decision. This route is effective for issues like unfair exit fees or failure to release you from a contract.

How do the PSR remedies affect the contract in 2026?

The PSR remedies, in force since July 2023, continue to apply in 2026. They include summary boxes, trigger messages, and the 18-month cap on new terminal leases. These rules aim to make switching easier and reduce lock-in.

For example, if you signed a terminal lease after July 2023, it cannot exceed 18 months. If you signed before, the cap may not apply, but you should still check. The remedies also require providers to offer online quotation tools, making it easier to compare.

In 2026, these rules are fully embedded. Providers must comply, and you can use them to your advantage. Always ask for a summary box and expect a trigger message before renewal.

What should I check in the card machine contract?

When reviewing your contract, check the contract length for both acquiring and terminal. Ensure the terminal lease is no longer than 18 months. Look for exit fees and notice periods. Verify whether you own the terminal or are leasing it.

Check the summary box for key terms. If you are considering switching, compare rates and fees using the table above. For example, SumUp charges 1.69% per transaction with no monthly fee, while Zettle charges 1.75% and a £29 hardware cost.

Also, check the settlement time. Some providers settle next day, others within minutes. This affects your cash flow. Finally, ensure you understand the PCI DSS requirements, as non-compliance can lead to fines.

Glossary: card payment terms explained

Acquiring contract: A contract between a business and a payment processor for handling card transactions, including fees and settlement terms.

Terminal lease: A rental agreement for card payment hardware, typically capped at 18 months under PSR rules for new contracts.

Trigger message: A notification sent by a provider before a contract renews, informing the customer of their options and rights.

Summary box: A standardized document showing key contract terms, such as length, fees, and notice periods, to aid comparison.

Exit fee: A charge applied when a customer terminates a contract early, often calculated based on remaining months.

Financial Ombudsman Service: An independent body that resolves disputes between consumers/businesses and financial firms, with awards up to £455,000.

Checklist: what to check on a fee statement or contract

• Check the terminal lease length is 18 months or less.
• Look for a summary box in your contract documents.
• Note the notice period required for cancellation.
• Calculate any exit fees before switching.
• Verify whether you own the terminal or are leasing it.
• Keep records of trigger messages and correspondence.

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

Can a card machine contract be longer than 18 months?

Yes, but only the terminal lease is capped at 18 months for new contracts since July 2023. Providers often combine a longer acquiring contract with a shorter terminal lease. Always check both contracts separately. If you signed before July 2023, the cap may not apply, but you can still negotiate. The PSR rules aim to reduce lock-in, so be aware of your rights.

What is a trigger message?

A trigger message is a notification that your card machine provider must send before your contract renews. It reminds you that your contract is ending and explains your options, such as switching or renegotiating. This is part of the PSR remedies introduced in July 2023. The message should include a summary box with key terms. If you do not receive a trigger message, you may be able to cancel without penalty. Always keep these messages as evidence.

Do I own the card terminal?

It depends on your contract. Some providers sell terminals outright, so you own them immediately. Others lease terminals, meaning you do not own them until the lease ends or you pay a buyout fee. The PSR cap limits leases to 18 months, but you still need to return the device at the end. Check your contract for ownership terms. Providers like Zettle sell hardware for £29, while others may offer 'free' terminals as part of a longer contract, which often means you do not own them.

How much notice do I need to give?

The notice period varies by provider and contract. Check your summary box for the exact notice period. Under PSR rules, providers must send a trigger message before renewal, giving you time to decide. If you are within the 18-month terminal cap, you can switch without penalty after that period. Always give written notice to your provider to avoid automatic renewal.

Can I switch acquirer and keep the terminal?

Yes, if you own the terminal outright. If you lease it, you may need to return it or buy it out. Some providers allow you to use their terminal with another acquirer, but this depends on the technology. For example, if your terminal is not locked to a specific provider, you can switch. Check your contract for terminal compatibility. The PSR rules aim to make switching easier, so you should be able to keep your terminal if it is not proprietary.