Contracts
- The traps are early termination fees, PCI non-compliance fees and auto-renewal clauses. Get the amount and trigger in writing
- Reserves and the right to hold funds are the worst clauses for your cash flow. Know exactly when they can keep your money
- Price month-to-month against a longer term, including exit costs
- Your MCC affects eligibility and pricing. Ask your processor to confirm that it fits your actual business
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 charge above pass-through costs | Your written percentage and fixed fee |
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 | Ask for the amount and frequency; include it in the total quote comparison |
| 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
Worked example, with assumed fees:
- Volume: $100,000
- Interchange: $2,100
- Assessments: $140
- Markup: $300
- PCI fee: $25
- Batch fees: $15
- All-in: ($2,100 + $140 + $300 + $25 + $15) / $100,000 = 2.58%
This example totals $2,580. It doesn't establish how a quoted "2.2% + $0.10" produced those fees; that would also need a transaction count and the quote's scope. Get both before comparing.
Contract Gotchas Beyond Pricing
Early Termination Fees
- Amount: Check the signed exit clause, including any "liquidated damages" calculation
- Watch for: Multi-year contracts with steep ETFs
- Ask: "What's the early termination clause, and what triggers it?"
Got separate equipment paperwork? Use the terminal-lease questions before signing.
Reserve Release Schedules
- The clause: the processor keeps a slice of your volume as protection
- Check: the withholding percentage, holding period and release schedule in your agreement
- Problem: Cash flow crunch if you're growing fast
- Ask: "Under what conditions do you increase my reserve? What's the release schedule?"
A reserve keeps funds against future losses. A payment hold, an account limitation and a reserve aren't necessarily the same restriction. Ask your processor which applies, what funds it covers and when they can be released. Use the written terms, not a general percentage or duration.
Related: Money Held or Frozen for detailed guidance
Volume Commitments and Rate Reversion
- The clause: an introductory or volume-dependent rate can revert; price both written schedules
- 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 can renew unless you cancel within its notice window
- 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?"
Processor says you owe a balance? Match its entries to your agreement.
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 | Written notice period and a reminder early enough to act |
| 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 | Compare matched quotes on your own mix |
| Reserve as % of monthly volume | Cash flow impact | Model your agreed balance and release dates |
| Time to document response | Relationship health | Suggested starting target: within 24 hours; meet the actual notice deadline |
| Contract renewal date | Avoid auto-renewal trap | Suggested reminder: 90 days out, earlier if the notice window needs it |
Next Steps
Leaving your current provider? Use the short switch path before closing the account.
- 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
- Money Held or Frozen - Cash flow impact
- Reading Statements - Understanding fees
- Processor Management - Ongoing relationship