A Popular Question: Can I Change Payment Service Providers?
Because we are able to secure credit card processing for an array of merchants, we often get calls and messages from merchants wondering whether they can change payment service providers. For one reason or another, merchants can become dissatisfied with their PSPs, and often seek out payment solutions that better fit their needs.
Read and fully understand your contract. That’s the first piece of advice we’ll give you.
We are thrilled when merchants come to us, even when we’re not their first-choice PSP. It is no secret that Instabill has the resources to find payment solutions for high risk merchants. Merchants, however, need to thoroughly understand the details of their contracts with their current PSPs before they think about a change.
Two Things to Expect When You Change Payment Service Providers
It is not an easy process to change payment service providers. Merchants need to be prepared to resort to seeing out the length of their contract. There are times, however, when a PSP and merchant part ways before the end of contract terms, although with a caveat.
Early Termination Fees
Early termination fees are common in all sorts of business deals or contracts, and most, if not all, payment service providers have them in their contracts. Mobile phone carriers are an excellent example: Say mobile carrier X has a better deal than your current carrier. If you leave your current carrier, you’ll be charged a fee – the early termination fee. Unlike the mobile phone carriers, PSPs do not cover early termination fees to woo other merchants.
Withheld Reserves
This is a classic misunderstanding between merchants and payment service providers: Acquiring banks hold reserves, not your PSP. Your acquiring bank may hold your reserves for anywhere between 6-18 months, and may release them incrementally during that window. They do this to cover any chargebacks or refunds a business may incur that may fall upon the previous acquiring bank.
While seeing out the terms of a contract, we also advise merchants to use that time to research better options for a PSP.
“It’s more than understanding the terms of the contract,” said Wendy Jacques, Sales Manager at Instabill. “It is also about understanding the reasons you’re looking for a new merchant account.”
Instabill is always up for a conversation about terms and rates. Our merchant account managers are available via live chat (below) or by calling direct at 1-800-318-2713.