| Business Payments |
Switching card machine providers involves ending or running down two contracts and usually replacing hardware, as most terminals are locked to one acquirer. The process takes 7 steps and typically 2 to 4 weeks. Check contracts, get quotes, time the switch, return old hardware, and consider dual running.
Switching card machine providers requires careful planning across 7 steps, including contract checks, quotes, timing, and hardware return, with most terminals locked to one acquirer.
KEY FACTS
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LAST REVIEWED 2026-09-06
Why terminals are locked
Card payment terminals are often locked to a specific acquirer, meaning they cannot be used with another provider without reprogramming or replacement. This lock-in arises because the terminal's software and security keys are configured for the acquiring bank's network. When a merchant signs a contract, the terminal is usually provided on a rental or lease basis, and the acquirer retains ownership or control. Even if the merchant owns the terminal outright, it may still be technically locked to the original provider's systems.
The Payment Systems Regulator (PSR) has noted that this lock-in can deter merchants from switching, as they face the cost and hassle of replacing hardware. In response, the PSR introduced measures to cap initial terminal contract terms at 18 months, effective July 2023, and to require providers to offer summary boxes and trigger messages to remind merchants of their contract end dates. However, these measures do not eliminate the lock-in; they merely make it easier for merchants to know when they can switch without penalty.
Merchants should therefore assume that they will need new terminals when switching, unless they have specifically purchased an unlocked terminal. Unlocked terminals are available but less common, and they allow greater flexibility. Understanding this lock-in is the first step in planning a smooth switch.
Check both contracts
Before switching, merchants must review two separate contracts: the merchant services agreement (for processing transactions) and the terminal rental or lease agreement. Each may have different notice periods, early termination fees, and contract lengths. The PSR's cap on initial terminal terms at 18 months applies to terminal contracts, but merchant services agreements may have longer terms, though they are also subject to similar regulatory scrutiny.
Merchants should locate the exact contract start dates and any minimum terms. They should also check for automatic renewal clauses, which can lock them in for another period if they miss the notice window. The PSR's trigger messages, required since July 2023, are designed to alert merchants before their contract ends, but merchants should not rely solely on these; they should set their own reminders.
It is also important to note any early termination fees, which can be substantial. Some providers may waive fees if the merchant is switching to a competitor, but this is not guaranteed. Merchants should request a settlement figure from their current provider, which will detail any outstanding payments or penalties. This figure is essential for comparing the true cost of switching.
Get a summary-box quote
When comparing new providers, merchants should request a quote that includes a summary box, as mandated by the PSR since July 2023. This summary box must clearly display key terms such as monthly fees, transaction charges, and contract length. It helps merchants compare offers on a like-for-like basis and avoid hidden costs.
Merchants should obtain quotes from at least three providers to ensure competitive pricing. The quote should include all costs: terminal rental or purchase, setup fees, monthly service charges, and per-transaction fees. It should also state whether the terminal is locked or unlocked, and whether there are any early exit fees.
The summary box is a regulatory requirement, so any provider failing to provide one should be treated with caution. Merchants should also check the provider's financial stability and customer service reputation, as these factors can affect the long-term relationship. Once a quote is accepted, the merchant should receive a formal contract that mirrors the summary box terms.
Using the summary box, merchants can calculate the total cost of switching over the expected contract period, including any dual running costs during the transition. This calculation will inform the decision and help negotiate better terms.
Timing the switch
Timing is critical to avoid paying for two services unnecessarily. Merchants should align the start date of the new contract with the end date of the old one, where possible. However, this is not always feasible due to notice periods and installation lead times. The PSR's cap on terminal terms at 18 months means that many terminal contracts will end at that point, but merchant services agreements may have different end dates.
Merchants should give notice to their current provider in accordance with the contract terms, typically 30 days. They should also schedule the installation of the new terminal to occur as close as possible to the termination date. Some providers offer a 'switch date' service, where they coordinate with the old provider to minimise downtime.
It is advisable to avoid switching during peak trading periods, such as Christmas, to reduce the risk of disruption. Merchants should also consider the time needed to test the new terminal and train staff. A typical switch takes 2 to 4 weeks from signing the new contract to full operation, but this can vary.
If the old contract has a notice period that extends beyond the new contract start, merchants may need to negotiate an early exit or accept dual running for a short period. Planning ahead can minimise this overlap.
Returning hardware
When switching, merchants must return the old terminal to the previous provider, unless they have purchased it outright. Most terminals are rented or leased, and the provider will expect the equipment back at the end of the contract. Failure to return it may result in additional charges.
Merchants should obtain a returns reference number and use the provider's designated courier service. They should also ensure the terminal is wiped of any sensitive data, although providers typically handle this. It is wise to photograph the terminal before return to avoid disputes over damage.
The return process should be initiated as soon as the new terminal is operational, to avoid paying rental fees for equipment that is no longer in use. Some providers may charge a non-return fee if the terminal is not sent back within a certain period, so merchants should check the contract for such terms.
If the merchant owns the terminal, they may be able to sell it or use it with a new provider if it is unlocked. However, most terminals are locked, so disposal or recycling may be the only option. Merchants should confirm ownership status in their contract.
Overlapping periods and dual running
To avoid a gap in card processing, merchants may need to run both the old and new systems for a short period. This is known as dual running. During this time, the merchant will pay fees to both providers, which can increase costs. However, it ensures that payments are processed without interruption.
Dual running is often necessary because the new terminal must be tested and staff trained before the old one is decommissioned. The overlap period should be kept as short as possible, ideally a few days. Merchants should negotiate with the new provider to install and test the terminal well in advance of the switch date, and with the old provider to terminate services promptly.
The cost of dual running should be factored into the overall switching cost. Some providers may offer a 'switch guarantee' that covers any dual running costs if the switch is delayed. Merchants should ask about such guarantees.
It is also important to ensure that both systems are compatible with the merchant's bank account and settlement processes. Dual running can cause confusion if transactions are settled to different accounts, so merchants should clarify settlement details with both providers.
Unlocked terminals
An unlocked terminal is one that is not tied to a specific acquirer and can be reprogrammed to work with any provider. These terminals offer greater flexibility and can be kept when switching, avoiding the need for new hardware. However, they are less common and may be more expensive to purchase upfront.
When considering a new provider, merchants should ask whether the terminal is unlocked. If it is, they can potentially use it with another provider in the future, reducing switching costs. Some providers may offer unlocked terminals as a selling point, but they may charge higher rental fees.
The PSR's remedies aim to reduce lock-in, but they do not mandate unlocked terminals. Merchants who value flexibility may choose to buy an unlocked terminal outright, even if it costs more initially. This can be a cost-effective option for businesses that anticipate switching providers regularly.
It is important to note that even an unlocked terminal may require new software or configuration to work with a different acquirer. Merchants should confirm with the new provider that they can support the existing terminal model. If not, a new terminal may still be required.
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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
Can I keep the terminal when switching?
In most cases, no. Most terminals are locked to the original acquirer and cannot be used with another provider without reprogramming or replacement. If you rent or lease the terminal, it must be returned at the end of the contract. If you own an unlocked terminal, you may be able to keep it, but you must check with the new provider that it is compatible. The PSR's remedies do not require terminals to be unlocked, so assume you will need new hardware unless explicitly stated otherwise.
How long does switching take?
Switching typically takes 2 to 4 weeks from signing the new contract to full operation. This includes time for the new provider to set up your account, deliver and install the terminal, and test the system. You must also give notice to your current provider, which is often 30 days. To minimise disruption, plan the switch during a quiet period and coordinate installation dates. Some providers offer faster switching, but it is wise to allow extra time for unforeseen delays.
Will I pay two providers at once?
Possibly. If your new contract starts before the old one ends, you will have a period of dual running where you pay fees to both providers. This can happen if you need to test the new terminal or if notice periods overlap. To avoid this, try to align the start and end dates. Some providers offer a switch guarantee that covers dual running costs if the switch is delayed. Always factor potential dual running costs into your budget.
Do I need to return the old machine?
Yes, if you rent or lease the terminal, you must return it to the previous provider at the end of the contract. Failure to do so may result in additional charges. The provider will usually arrange a courier and provide a returns reference. Ensure you return it promptly to avoid ongoing rental fees. If you own the terminal, you do not need to return it, but it may be locked and unusable with a new provider.
What is an unlocked terminal?
An unlocked terminal is not tied to a specific acquirer and can be reprogrammed to work with any provider. This gives you the flexibility to switch providers without replacing hardware. Unlocked terminals are less common and may cost more upfront. When choosing a provider, ask if the terminal is unlocked. Even if it is, the new provider must support the model. The PSR does not require terminals to be unlocked, so they are not standard.
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