10 Factors to Consider When Switching Merchant Service Providers

Getting paid is an essential part of any business. You might need a financial partner for non-cash transactions, regardless of whether your company accepts payment online, in person, or over the telephone.

Merchant processor or Merchant Services Provider - serves as the mediator between your business and banks, card issuers, and card networks. There are many options available, so it is crucial to choose the one that meets your business's needs.

But What if your current Merchant Service Provider is not satisfactory?

It's time to end the relationship with your payment processor if you are unhappy. You want the transition to go as smoothly and seamlessly as possible so that you can find the right partner.

Although switching merchant service providers may seem daunting, it is easier to manage when you know the steps involved. Whether you want more transparent fees, better customer service, or you need to get approved for a high-risk merchant account; you must find a provider that fulfills all your needs and provides an improved overall experience.

Continue reading to learn how to navigate the process and find the best merchant service provider that is right for you.

Reasons Why Need to Change Your Service Provider

  • High Equipment Costs
  • Non-preferred Payment Types
  • Huge Processing Rates
  • Long-Term Contract
  • Poor Customer Support

1. High Equipment Costs

You require equipment to swipe, tap and process debit and credit card payments in brick-and-mortar shops. This equipment is essential for your business, and you should not have to pay a lot of money just to use it.

Merchant Service Providers often lease this equipment out for a monthly fee. A leasing agreement can save you money upfront, but the monthly payment often exceeds the cost of purchasing a terminal. This is especially true if your Merchant Service Providers want to lock you into multi-year contracts.

2. Non-preferred Payment Types

The most obvious sign you need to switch Merchant Service Providers is if your current provider doesn't support the payment options you wish to offer your customers. It could be that they aren't able to keep certain types of transactions like NFC-based payment that allows customers to pay with smartwatches or mobile devices.

Perhaps they aren't able to provide the latest technology, including EMV-compliant equipment or secure payment gateways.

No matter the reason, if the current Merchant Service Provider is incapable of supporting you with your preferred payment options, you should find a provider who can offer all your requirements.

3. Huge Processing Rates

It might be time for you to switch merchant services providers if your processing fees keep increasing. Some Merchant Service Providers deliberately make their pricing structures confusing.

You might find attractive introductory deals, but then they raise the rates after some time or hide hidden fees behind tiered pricing plans. These plans can be further complicated by fluctuating interchange rate fluctuations.

You should not be paying fees that you don't recognize or haven't agreed to. It's time to change to merchant services providers you can trust.

Find a Merchant Service Provider that can offer flat-rate pricing, which is a good option. This will ensure that you know exactly what to expect, and your rates won't change.

4. Long-Term Contract

Flexible contract terms are better. Your Merchant Service Provider has all the power and leverage if you are locked into a contract for a long time that can lead you towards unwanted risk.

Your Merchant Service Provider won't be required to do any extra work to keep you as a customer, that means they can alter the support or customer service as per their convenience whenever they want, and you won't have any control over it because you are bound to be with them for a period agreed upon.

You will likely have a short window of time to cancel your contract before it renews. However, there is no cancellation fee. These can vary greatly, but they are usually around $400. Even with a cancellation fee, it is better to end the unhappy contract than to keep going.

5. Poor Customer Support

Merchant technology failures can be devastating for everyone. It can be frustrating for you, the business owner, and it can also cause frustration to customers trying to purchase. The worst thing about needing support for technical issues is not being able to contact them.

Some providers will only provide the minimum amount of support if you have low expectations and long-term contracts that make switching MSPs difficult.

However, this is unfair to you as a merchant and to your customers.

Your MSP should provide 24/7 customer service or multiple channels for you to reach them (including Skype, chat, and so on). If they can't offer the same, then you should consider changing your payment processing partner.

Essential Factors to Consider When Switching Merchant Providers

  • Review the Existing Contract
  • Status of the Processing Equipment
  • Informing the current Service Provider
  • Compatibility of Existing Gift Cards and Loyalty Programs
  • Transparency on Flat Rate Pricing
  • Flexible Contract Terms
  • Secure Payment Processing
  • Reliable Customer Support
  • Custom Merchant Solutions
  • Future Scalability

1. Review the Existing Contract

To determine the best way to proceed, you must review your contract details if you are currently tied into a contract. If you do not follow the cancellation instructions, many providers will renew your account automatically.

Read all the clauses carefully to ensure you don't miss any critical clauses and penalties that may apply to early termination. Be sure to pay close attention to all terms in your contract, including:

  • Length of the contract:

    What is the length of the existing contract? How much of the time remains?
  • Date of Renewal:

    Do you have a contract that will renew at a specific date? If so, cancel it before it happens.
  • Cancellation Policy:

    Is there a penalty for canceling early? Is it better to pay the fine than being stuck with a contract that you don't like?

2. Status of the Processing Equipment

Do you own it? Is it leased? Do you have to return it? Consider whether you will need to lease or purchase new equipment from the new payment processor.

If you have leased the equipment, If your provider has provided you with terminals for use during your lease, you will need to return any equipment to the MSP. You may have to pay the remaining lease amount depending on your contract.

If the equipment is yours (meaning you bought it directly from the MSP), you should inquire about potential new providers to see if they have a compatible system with your technology. You will likely have to upgrade if your equipment is obsolete (or encrypted).

3. Informing the current Service Provider

Once you are confident that your new Merchant Service Provider is the right choice, it's time for you to notify your old provider that you are closing your account.

Be firm when you tell your former provider by email or phone that you are moving on. Sometimes, they might try to convince you to extend your contract with a temporary discount or other perks to distract attention from the more severe issues.

When you call, tell them that you will be sending them a follow-up email. This will create a paper trail that allows them to prove you did cancel quickly enough and not try to rescind your cancellation.

Include your merchant account details and the name of the support representative you spoke with about canceling the account. Also, request confirmation that the account has been closed.

4. Compatibility of Existing Gift Cards and Loyalty Programs

Businesses use loyalty and gift cards to increase customer spending. If you use your merchant service providers to set the gift cards and loyalty programs, then there is a possibility that your cards or loyalty programs might not work when you change the credit card processors.

Ask the new merchant service provider if they can seamlessly transfer your gift cards and loyalty programs. There might be an additional cost that will apply when you try to convert them. Check to see if there are any conversion costs for gift cards.

5. Transparency on Flat Rate Pricing

It shouldn't take long to understand pricing plans. Many Merchant Service Providers offer flat-rate pricing to make sure you know exactly what to expect.

If flat-rate pricing is not available with your MSP, make sure you understand the equipment fees, account fees, and transaction fees.

Ask questions to clarify the fee structure if in doubt. You should find your new provider willing to give you all the information that you need.

6. Flexible Contract Terms

It is not a good idea to be locked into a long-term contract. Clear communication and transparency are crucial to ensure your MSP is looking out for your best interests. Make sure to sign the contract only when you have reviewed the agreement and asked for clarifications on all doubtful clauses.

7. Secure Payment Processing

You are at a disadvantage if you use outdated equipment and your business (and customers) is exposed to security threats.

Select a merchant service provider that provides fraud protection and secure payment processing for all types of payments, including payment gateways for eCommerce, virtual terminals, and POS systems for retailers.

8. Reliable Customer Support

Customer support will be crucial when setting up your system and when you are trying to switch merchant services. You need to ensure they are up to the task and provide excellent service, even in real-time. You may need them during odd hours of the night or day in your business. Also, make sure to check the Contact options. You might be interested in telephone support, especially for equipment or software issues.

Custom Merchant Solutions

Make sure that your Merchant Service Provider provides the best services and terms for your business. These are the questions you should ask:

  • Are they able to accept all types of payment (including contactless payments, mobile, online purchases, etc.)?
  • Can their solutions be integrated with your CRM or marketing automation platform?
  • Do they offer next-day financing? So that deposits appear in your merchant accounts on the next working day.

10. Future Scalability

It would be best to have a merchant services provider that offers products that can grow with your business. You need to ask, ''are they able to handle your future needs as well as your current needs''?


Consider this when deciding whether or not to switch merchant service providers. The more you remain with an MSP that isn't serving your best interests, the more you will end up paying (in time, money, and frustration). You can change merchant service providers quickly to get a new partnership to help your business succeed and scale.

Your business is your bread and butter, and you can't let poor service providers take advantage of you just because you need them. You can find many better options out in the market that will speak to your best interest. Explore the better merchant service providers that can help your business grow to the next level.