How to Cancel a Merchant Account Properly

Read the termination clause first

Find four things in your agreement: the initial term, whether it renews automatically, the notice you must give and when, and any early termination fee or liquidated damages. The FTC's 2022 complaint against First American Payment Systems quotes that company's clause as an example: the agreement renewed for additional one-year periods unless the merchant gave written notice of non-renewal no less than 30 and no more than 90 days before the end of the term, and the notice had to carry the merchant's signature as it appeared on the application. Your agreement may say something different, but that is the kind of wording to look for.

Send notice the way the contract requires

If the agreement requires written notice with an authorized signature, send exactly that. Include your business legal name, merchant ID, the date you want the account closed, and a request for written confirmation. Use a delivery method that gives you proof of receipt, and keep a copy. Close your final batch and confirm it has funded before the account shuts, so no sales are left unsettled.

In Canada, the Code of Conduct gives you dated exits

Canadian merchants have a route out that does not depend on what the termination clause says. The Code of Conduct for the Payment Card Industry in Canada came into force on October 30, 2024. Under it, an acquirer must give notice 30 to 60 calendar days before the effective date of a fee increase, a new fee, or a reduction that is not matched, and that notice must state the previous and the new amounts, identify who changed the rate, and set out the merchant's right to give notice of intent to exit the agreement within 70 calendar days after the effective date of the change. Once you give notice to cancel, the provider must send cancellation documents within 5 business days. On renewals, a fixed-term agreement cannot automatically renew for the length of the original term; renewals are limited to periods of 6 months or less, and a merchant who wants to prevent a renewal must give notice at least 45 calendar days before it. The Code also requires the agreement to carry a cover page with a Summary of the Key Elements of the Agreement, a Cost per Transaction Disclosure and a Disclosure of Fees, which is where you should look first for the term, the renewal and any exit fee. Two practical consequences. A fee-change notice is an exit window, so read those letters rather than filing them, and diarise the 70-day date when one arrives. And the 45-day non-renewal notice is a calendar entry you should make the day you sign, not something to remember later. None of this applies to a US agreement, where the contract's own notice clause governs.

Check for a separate equipment lease

Terminal leases are often separate contracts with a different company and their own non-cancellable terms. Cancelling the processing agreement may not end the lease. Find the lease paperwork, check who owns the equipment, and follow its return or buyout terms. Return placed or leased equipment with tracking and keep the receipt.

Watch for debits after you cancel

Processors usually collect fees by debiting your business bank account. The FTC alleged that First American kept debiting merchants for monthly fees for months or even years after they stopped using the service, attempted further debits after merchants placed stop-payment orders, and in some cases used a different company name on the debit. Those are allegations about one company. Under the order described by the FTC, the defendants were to return $4.9 million, stop misrepresenting contract terms, and make cancellation easier; in February 2025 the FTC said it had sent more than $2.6 million in refunds to 5,588 small businesses. After cancelling, check at least two months of bank statements. If debits continue, contact the provider in writing with your confirmation, and ask your bank what options it offers for stopping or returning an unauthorized debit on a business account.

A checklist before the cutover

Before you switch, set up the new account and test it; download statements and transaction history from the old provider's portal, since access may end; move or re-collect any stored customer cards in line with your new provider's process; update recurring billing; and note the date of your last expected fee. This is general information, not legal advice (September 17, 2026). If the contract terms are unclear or a large fee is at stake, have a lawyer review the agreement.