In today’s world of payment processing, every now and then we see a newbie applying for merchant account to enter into this world of online business. But such new comers are offered a long contract which very difficult to understand by a salesperson who is forcing and insisting that nothing can be changed in the contract but propose to give you the best deal possible. But it is already late for you to realize that you actually did not got the best deal and now you feel the need to change to a better processor where you get a better deal than your present one. But now your processor asks you to pay an Early Termination Fee also termed as ETF to cancel/break your on-going contract.
Stay with us and we will tell you everything about ETF.
What is Early Termination Fee (ETF)?
Just like most of us must have faced the ETF earlier on canceling contracts of your apartment lease, cell phone service , etc. we have to pay some extra fee this fee is the ETF. Such fees can be capped for the consumers with the help of law. But, you might have to face the trouble, as a business.
In the field of online payment processing the service providers/ processors help you with the merchant account for which you sign a multi-year contract with the processors that is mostly 36 months long. ETF becomes applicable if you wish to terminate the contract within the 36 months. This fees are taken as a penalty of cancellation.
How much is the cost of the ETF’s?
According to detailed studied the costs of ETF range between $250 to $500 depending upon the location of the business. But, if the cancellation is done early as per the contract then the ETF may go above $1000.
Now you must be thinking of a way to get your contract cancellation done without triggering any ETF.
How to cancel your merchant account without suffering the ETF?
The best way to avoid ETF is, if you cancel the contract when it actually end and before it is renewed automatically. To do so you have to be thorough with the following steps.
- Keep information of the exact date on which the contract ends.
- Find out the cancellation period before the contract renews.
- Inform your processor in the correct procedural manner.
- Make sure that no fees are charged.
We also would like to tell you that there are many other processors who help the new businesses with a merchant account with monthly billings and no ETF. These processors are way better than the one’s with complicated agreements and high ETF’s. Many new processors are coming up with great business deals that will help you avoid ETF’s.