What an early termination fee actually is
An early termination fee (ETF) is a charge a provider may quote for ending an agreement before the relevant commitment ends. The amount and basis depend on the agreement; processing and equipment may have different cancellation requirements.
Whether an exit charge is payable or challengeable depends on the contract, circumstances and applicable law. Ask for the relevant clause and a written breakdown. We can include the quoted charge in a commercial comparison; a disputed charge may need independent legal advice.
What to check in the written exit figure
The following are possible components to check, not a tariff or a claim that every contract uses them. Ask the provider to identify the contractual basis, relevant dates and calculation for each amount it quotes.
| Possible component | What to request | What to verify |
|---|---|---|
| Processing commitment | The cancellation clause and itemised calculation | Which months and charges are included, and whether notice changes the figure |
| Equipment commitment | The supplier, remaining term and amount for each device | Whether this is separate from the processing agreement |
| Other contractual exit charge | The clause relied on and how the figure was calculated | Whether the amount is additional to or replaces another charge |
| Closure or equipment-return costs | Any final charge, return deadline and instructions | Which costs can be avoided by completing the required steps |
Check every agreement, not just processing
A processing cancellation figure may not cover equipment, software or other linked services. Ask each contracting party what remains payable and whether action is needed to close its service. Include return costs, any overlap and new setup costs when comparing the financial effect of moving.
Your realistic options if you're still in contract
Run out the term
Waiting may reduce the exit charge. Confirm the notice requirement, final bill and any separate commitments; reaching the minimum-term end date does not automatically make moving free.
Renegotiate with the incumbent
Ask whether your provider will revise the price. Compare the full written offer, including any new minimum term or changed fees, with the alternatives.
Switch and absorb the exit fee
Compare the complete cost of moving with the projected saving over a period relevant to your business. If there is no positive monthly saving, a savings payback calculation does not apply; service or operational reasons need a separate decision.
Switch with exit-fee contribution
If a provider offers a contribution, get the amount, eligibility, evidence requirements and payment timing in writing. It is subject to approval, not guaranteed, and must be assessed alongside the new deal's charges and commitments.
If you dispute the charge
Ask the provider to explain the charge in writing and use its formal complaints process if you disagree. Keep the agreement, quote, invoices and relevant correspondence. Do not assume a fee will be waived or cancel payments solely because a charge is disputed; seek advice on your position.
The Financial Ombudsman may be able to consider complaints from eligible micro-enterprises or small businesses. Coverage depends on the business, provider, activity and complaint timing. Use its official eligibility checker or contact it before assuming your complaint is covered.
Key takeaways
- Get a full written settlement figure - not just the merchant ETF - before deciding.
- Separate processing, equipment or software agreements may have different closure costs.
- Compare staying, asking for revised terms and moving; none is automatically the best option.
- Exit-fee contributions from new providers exist but are never guaranteed.
- Price-variation clauses sometimes create a fee-free exit window - check the small print.
Want to understand what you are actually paying?
Send your latest merchant statement and Card Payment Connect will assess the charges, pricing structure and contract information available.
Get My Statement Reviewed