Guide·6 min read

What to Look for in PSP Contract Terms

PSP contracts contain important terms that affect your business. Here's what to watch for before signing.

Why Contracts Matter

Most merchants focus on rates and ignore contract terms. This can be expensive. Unfavorable terms affect your business long after rate negotiations are forgotten.

Key Terms to Review

1. Contract Duration

Length of commitment
Auto-renewal clauses
Notice period for non-renewal

2. Termination Clauses

What triggers termination rights
Early termination fees
Your termination rights
Reserve release timeline after termination

3. Rate Change Provisions

Can they increase rates?
With how much notice?
What's your recourse?

4. Reserve Terms

Initial reserve percentage
Release timeline
Conditions for reserve increase
Post-termination holdback

5. Liability Provisions

Your liability for chargebacks
Indemnification requirements
Liability caps
Insurance requirements

Red Flags

Multi-year lock-in with high exit fees
Unlimited rate change rights
Vague termination triggers
Extended post-termination reserve holds
One-sided indemnification

Negotiation Points

Shorter initial term
Rate guarantee period
Clear reserve release schedule
Defined termination triggers
Reasonable notice periods

Key Takeaways

Read the contract, not just the rate sheet
Watch for auto-renewal and exit fees
Understand reserve terms completely
Terms are often negotiable
Consider legal review for large volumes

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