Contracts
- The traps are early termination fees ($200-$500+), PCI non-compliance fees and auto-renewal clauses.
- Reserves and the right to hold funds are the worst clauses for your cash flow. Know exactly when they can keep your money.
- Month-to-month costs a little more and kills the termination fee. Worth it under two years old, or if you might switch.
- Your MCC sets your pricing tier and your risk class. Check it before you sign. A wrong one costs 0.5-1.5% per transaction.
The rate is the easy part. The contract language is where you get hurt.
Junk Fees vs. Real Costs
Every processor has fees. Some are legitimate. Some are padding.
Legitimate Costs
| Fee Type | What It Is | Typical Cost |
|---|---|---|
| Interchange | Card network cost, non-negotiable | 0.89% + $0.158 in person, 1.36% + $0.152 online (blended) |
| Assessments | Visa/MC fees, non-negotiable | Not published. Assumed 0.14% + $0.02 |
| Processor markup | Their profit margin | 0.1-0.5% |
That interchange line is a blend across a normal US card mix. It comes from Visa's US schedule of 18 April 2026 and Mastercard's of 17 April 2026. One card can sit far off it. Regulated debit is 0.05% + $0.21, and a commercial card runs up to 3.00% + $0.10. How we derive the blend.
The assessments line is weaker, and we say so. Both networks publish interchange in full. Neither publishes assessments at all. Visa's 18 April 2026 fee document runs to hundreds of rates and never uses the word. So the 0.13-0.15% everyone quotes has no primary source behind it. We carry 0.14% + $0.02 as an assumption and flag it every time it appears.
Padding to Negotiate or Avoid
| Fee Type | What It Is | Action |
|---|---|---|
| PCI compliance fee | Monthly charge for "compliance help" | Often removable if you're compliant |
| Batch fee | Per-batch settlement charge | Should be $0 or pennies |
| Statement fee | Paper statement charge | Request electronic, remove fee |
| Minimum monthly fee | Charge if you don't hit volume | Negotiate away if possible |
| Annual fee | Yearly account charge | Often removable |
| Gateway fee | Separate from processor fee | Ask if included in rate |
Reality check: a clean 2.5% all-in often beats 2.2% plus seven line items.
Helcim charges $0 monthly, and no setup, PCI, cancellation or statement fees. Its interchange markup is published band by band, from +0.40% + 8c down to +0.15% + 6c. Stripe states it "does not charge setup fees, monthly fees, or any other hidden fees." Adyen states it has "no monthly fees, set-up fees, integration fees or closure fees." It does carry an unquantified minimum invoice. All verified 2026-08-02.
An ISO will call a PCI fee, a statement fee or a cancellation fee industry standard. Those three pages are your answer. None of them is standard.
How to Calculate All-In Rate
All-in rate = Total fees / Total volume
Example:
- Volume: $100,000
- Interchange: $2,100
- Assessments: $140
- Markup: $300
- PCI fee: $25
- Batch fees: $15
- All-in: $2,580 / $100,000 = 2.58%
The "2.2% + $0.10" quote became 2.58% after all fees. This happens constantly.
Contract Gotchas Beyond Pricing
Early Termination Fees
- Range: $0 to $500+ or "liquidated damages" (percentage of remaining contract value)
- Watch for: Multi-year contracts with steep ETFs
- Ask: "What's the early termination clause, and what triggers it?"
Reserve Release Schedules
- The clause: the processor keeps a slice of your volume as protection
- Typical holds: 5-10% of volume, released 30/60/90 days after transaction
- Problem: Cash flow crunch if you're growing fast
- Ask: "Under what conditions do you increase my reserve? What's the release schedule?"
Holds, withholds and reserves are one thing. Your processor keeps a slice of your sales as a cushion against chargebacks. Typical reserves run 5-10% of monthly volume, released after 6-12 months of clean processing. A freeze on your entire balance is different. That's an account hold, and it usually follows a risk review.
Related: Holds and Reserves for detailed guidance
Volume Commitments and Rate Reversion
- The clause: your quoted 2.2% becomes 2.9% if you miss volume targets
- Watch for: Minimum monthly volume requirements
- Ask: "Are rates conditional on volume? What happens if I miss the target?"
Auto-Renewal Traps
- The clause: the contract renews for another year unless you cancel 30-90 days out
- Problem: Miss the window, you're locked in
- Ask: "What's the notice period for non-renewal? Can we do month-to-month after initial term?"
Liability Language
- The clause: who eats the loss on fraud and chargebacks
- Watch for: Broad indemnification clauses
- Ask: "What's my liability cap for fraud losses?"
The Chargeback Fee Clause
This is the term merchants skim and then pay for. Published fees differ more than the card rates do. The refund behavior matters as much as the number.
| Processor | Published fee | Comes back if you win? |
|---|---|---|
| Helcim | $0 if resolved in your favor, $15 if lost | Yes, by design |
| Braintree | $15.00 | Not stated |
| Stripe | $15 to receive, plus $15 to counter | Received fee never returned. Countered fee returned on an outright win only, not on a partial win |
| PayPal | $15 on wallet and Guest Checkout disputes, $20 on card chargebacks. The two never both apply. $30 above a 1.5% dispute ratio | The $15 isn't charged when the case is decided in your favor. The $20 and the $30 are charged either way |
| Moneris | CA$25, plus CA$80 authorization chargeback handling | Not stated |
| Square | $0. "There are no fees for dispute management services for chargebacks" | Nothing to refund |
| Shopify Payments | $15.00 in the US | Yes, returned on a win |
| Toast | $15.00 | No, charged win or lose |
| Authorize.net | $0.00 on cards, $25.00 on eCheck.Net | Gateway fee only. Your merchant account bills its own |
| Adyen, Clover, Worldpay, Global Payments | Not published | Unknown. Ask before you sign |
| Nuvei | Per contract, on Schedule A of your merchant application | Unknown |
All read 2026-08-02. The full published US span is $0 to $30. Ask: "What is the per-dispute fee, is it charged again if I respond, and is any of it refunded when I win?" Get that in the contract, not from a support chat. If a rep quotes anything above $30, ask which published schedule it came from.
Contract Negotiation Checklist
Before signing, confirm these items in writing:
| Item | What to Look For |
|---|---|
| All-in rate | Explicit, including all fees |
| ETF | Ideally $0 or capped |
| Contract length | Avoid multi-year without exit |
| Auto-renewal | At least 60 days notice |
| Reserve terms | Clear release schedule |
| Volume requirements | No rate reversion traps |
| Token portability | Can export stored cards |
| PCI/compliance fees | Removed or justified |
MCC Implications
Your Merchant Category Code (MCC) affects more than you think.
What Your MCC Affects
| Impact Area | How MCC Matters |
|---|---|
| Interchange | Some MCCs qualify for lower rates (grocery, utilities) |
| Reserve requirements | High-risk MCCs face higher reserves |
| Processor tolerance | Some processors won't touch certain MCCs |
| Chargeback thresholds | High-risk MCCs may have lower tolerance |
| 3DS requirements | Some MCCs require 3DS in certain regions |
Common MCC Misclassification Problems
- Supplements under "general retail": works until chargebacks spike. Then you lose the account.
- SaaS coded as "computer services": you miss subscription-friendly interchange.
- Multi-product with the wrong primary code: your main product should drive it.
When to Request MCC Review
- You've added product lines that don't fit your current code
- Your chargeback pattern doesn't match your MCC
- You're paying higher interchange than similar businesses
Underwriting and Approval
Signing isn't the end. The processor underwrites you before you can process a thing.
See Underwriting for the complete guide:
- What documents you need (and why)
- Risk factors processors evaluate
- Common rejection reasons and how to fix them
- How to graduate from low limits to higher volume
- Ongoing monitoring and how to avoid holds
Where This Breaks
-
High-risk MCCs with limited options. Sometimes one processor will take you. They know it.
-
Rapidly scaling businesses hitting reserve triggers. Growing 10x in 6 months? Your processor will notice and hold cash.
-
Contract signed without reading. The ETF and auto-renewal you didn't notice will cost you.
Analyst Layer: Metrics to Track
| Metric | What It Tells You | Target |
|---|---|---|
| All-in effective rate | True cost of payments | Under 2.5% for most US e-commerce |
| Reserve as % of monthly volume | Cash flow impact | Under 5% unless high-risk |
| Time to document response | Relationship health | Under 24 hours |
| Contract renewal date | Avoid auto-renewal trap | Calendar reminder 90 days out |
Next Steps
- Calculate your current all-in rate → Reading Statements
- Review your contract terms → Check ETF, auto-renewal, reserves
- Prepare underwriting documents → Have them ready before applying
- Plan for ongoing compliance → Set up document refresh process
See Also
- Processor Selection - Choosing the right processor
- Underwriting - Approval process and requirements
- Integration & Exit - Technical and exit planning
- Holds and Reserves - Cash flow impact
- Reading Statements - Understanding fees
- Processor Management - Ongoing relationship