After nearly 15 years of guiding businesses through payment processing solutions, MSP Consulting has developed insights on a broad range of terms and conditions included in merchant processing contracts.
Our team has run across some truly remarkable and abusive terms, and we have helped many businesses avoid harmful terms as well as renegotiate these types of contracts with more favorable terms.
In hopes that we can help other business owners avoid entering into abusive and restrictive agreements, we would like to pass along some information and tips. Over the next several weeks, we will discuss some of our key lessons learned related to merchant processing contract terms and pricing tactics.
Tip 1: Request and review term sheets.
Most contracts are fundamentally similar in overall structure; it’s when you get into the details that the specific terms often vary widely. That said, it’s critical that certain clauses are verified upfront to head off potential issues.
Often these details are outlined in separate, lengthy terms sheets. Additionally, these term sheets aren’t likely to be included in the primary application documents. Instead, the term sheets are briefly referenced in the application in hopes they will be missed.
Make sure you request these terms sheets before signing anything. When you do receive a copy of these separate terms sheets, you’ll discover that they are strategically written to be lengthy and difficult to read. While most of the language and terms are standard credit card association operating procedures, often merchant sales group add punitive terms.
In our upcoming blog posts, we’ll outline what you need to look for and why you need to carefully review the term sheets for the following clauses and fees:
- Agreement Term & Early Termination Fees
- Bundle rate pricing
- Lease equipment charges
- Ancillary fees
- Pricing changes
Far too many companies overpay for payment processing or enter into punitive agreements because they do not understand what each fee represents and how terms impact their business. MSP Consulting takes the time to review these contracts for our clients and, with proper diligence and escalation, we have successfully established reasonable terms and resolved contract issues for our clients.
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