What is involved
Moving to a new card processor touches three things:
- The current contract: its term, renewal date, notice rules and any fee for leaving.
- The Code of Conduct: Canada’s Code of Conduct for the Payment Card Industry, which sets notice, exit and renewal rules. All major card networks in Canada have agreed to it, according to the Financial Consumer Agency of Canada (FCAC).
- The equipment: whether the terminal is rented, leased or bought.
The equipment comes first in the paperwork
How a terminal is held decides what happens to it:
- Rented from the processor. TD’s current terms say that when the agreement ends, the merchant “will immediately stop using, or return to us at your expense, all rental Equipment”.
- Leased. A lease is its own contract. Ending the processing agreement may not end the lease. The FCAC says the Code’s rights on related service agreements do not apply “if related services and their price don’t depend on you keeping your initial card payment processing agreement.”
- Bought. The device belongs to the merchant. Whether it works with a new processor depends on the device and the new processor. Helcim sells its hardware and says it has “No contracts, leases”; Square sells its hardware with “no long-term contracts or equipment fees.”
More: Equipment Leases.
The current contract
Published examples of what contracts say about leaving:
| Provider | Term and renewal | Fee for leaving |
|---|---|---|
| TD Merchant Solutions | Three-year first term, then six-month renewals unless notice is given at least 45 days before the end | $300 per location, or $20 per terminal for each month left (TD fee list) |
| Helcim | Continues while the service is used | “There are no penalties for termination or cancellation fees” |
| Square | “No long-term contracts” | None listed |
TD’s terms also list two times with no early termination fee: within 30 calendar days of the start date (if all services stop and rented equipment is returned), and within 70 calendar days after a fee change TD has notified the merchant of.
Money held after leaving. TD’s terms describe a holdback for amounts that come due in the 180 days after termination. Helcim’s terms say it may require a reserve “for a minimum of six (6) months from the termination date”.
More: Early Termination Fees.
Using your Code of Conduct rights
What the FCAC’s merchant-rights page says:
- Non-renewal. A merchant can tell the acquirer or downstream participant they do not want to renew, at least 45 calendar days before the agreement renews. Fixed-term agreements can renew automatically only for periods of 6 months or less.
- Exit after a fee change. Processors must give 30 to 60 calendar days’ notice of certain fee increases and new fees. A merchant can then give notice of intent to exit without penalty within 70 calendar days after the change takes effect. The notice must include the date that period ends.
- Cancelling. After notice to cancel, the acquirer or downstream participant must send cancellation documents within 5 business days. The cancellation takes effect on the date asked for if obligations are met (for example, rental equipment returned and forms signed) and the date is at least 30 calendar days after the documents were submitted, unless agreed otherwise.
- Exceptions. Fee increases on a schedule in the agreement, such as the end of a promotion, and services unrelated to card processing.
Full details: The Code of Conduct for the Payment Card Industry.
Getting a quote you can compare
The FCAC says that under the Code, card processing applications, quotes and proposals must include:
- a Cost per Transaction Disclosure, to compare the cost of accepting a given card across providers, and
- a Disclosure of Fees, a list of other fees such as monthly fees.
Processors must explain how they worked out these costs, such as the card mix and volumes used, and describe any promotional offers, including how long they last.
The card fee calculator works out two quotes side by side against the same monthly sales. Side-by-side provider pages: TD Merchant Solutions vs Helcim and Helcim vs Square.
How the dates fit together
The dates in the rules above, in one place:
| Step | Date set by | Source |
|---|---|---|
| Notice of non-renewal | At least 45 calendar days before the agreement renews | FCAC (the Code); TD’s terms also say 45 days |
| Fee-change notice | 30 to 60 calendar days before the change takes effect | FCAC (the Code) |
| Notice to exit after a fee change | Within 70 calendar days after the change takes effect | FCAC (the Code) |
| Cancellation documents from the provider | Within 5 business days of the notice to cancel | FCAC (the Code) |
| Cancellation takes effect | At least 30 calendar days after the documents are submitted, unless agreed otherwise | FCAC (the Code) |
| Holdback or reserve after leaving | 180 days (TD); at least six months (Helcim) | TD’s and Helcim’s terms |
The final statement from the old provider shows any last fees, holdbacks or reserves.
Where to go from here
The current agreement’s summary box lists the term, renewal date and cancellation terms. Recent statements show any fee-change notices and their “cancel by” dates. How to Read Your Merchant Statement shows where they appear. More on Canada: card processing in Canada. For the US, see Switching Processors in the US.
Want a partner to review your statement? We will put you in touch. Start the free statement review.