Question 1

Why is a merchant account restricted or frozen?

Accepted Answer

Providers usually hold or restrict accounts when they see risk: a sudden jump in volume or ticket size, high refunds or chargebacks, a change in what you sell, missing documents, or a business type outside their policy. Aggregator platforms tend to do this more abruptly than providers who underwrite you up front. Ask the provider in writing what they need to lift it, and keep records of every reply.

Question 2

What is an early termination fee on a merchant account?

Accepted Answer

It is a charge in some processing contracts for closing the account before the term ends. It may be a fixed amount, or a liquidated damages clause that estimates the provider's lost profit for the rest of the term, which can be much larger. Equipment leases are separate and usually keep billing after you leave. Read your contract's termination section before switching, and ask us to look if unsure.

Question 3

Do I have to pay an early termination fee?

Accepted Answer

If your signed contract includes one and you leave early, the provider can usually charge it. Check the term length, whether it auto-renewed, the notice period and the exact clause. Sometimes the saving from switching still outweighs the fee; sometimes it is worth waiting until the renewal window. Some providers will negotiate if asked. This is general information, not legal advice.

Question 4

How do I switch credit card processors?

Accepted Answer

Get your new account approved and equipment ready before you cancel the old one. Then move online checkouts and stored cards if you have them, test a live transaction, and only then give written notice to the old provider following the contract's cancellation steps. Return any rented equipment and watch your next statement for leftover fees. CELER handles the set-up side for you and stays involved afterwards.

Question 5

How do I close or terminate a merchant account?

Accepted Answer

Read the termination section of your agreement for notice period, method and any fees. Send written notice by the method it requires and keep proof. Ask for written confirmation of the closing date, return or buy out equipment, and make sure any reserve held is scheduled for release. Watch your bank account for a month or two afterwards for stray debits.

Question 6

Will switching break my online ordering or booking system?

Accepted Answer

It should not, and we check before recommending anything. Many POS, booking and ordering systems only work with certain processors, so the first question we ask is what your setup has to keep connecting to. If a cheaper offer would break an integration you rely on, we tell you that up front, and you can stay where you are.

Question 7

What is a reserve on a merchant account?

Accepted Answer

A reserve is money a provider holds back from your deposits to cover possible chargebacks or refunds. It may be a percentage of each sale held for a period, or a fixed amount. Reserves are more common for new, high-risk or prepaid-service businesses. Your agreement should state the reserve terms and when held funds are released, including after you close the account.

Question 8

Can I keep my existing terminal if I switch processors?

Accepted Answer

Sometimes. Many terminals are locked to one processor or need to be reprogrammed, and some cannot move at all. Leased equipment also belongs to the leasing company. Tell us the make and model and we will check whether it can be used with a new provider, or whether new equipment is needed and what it costs before you decide.

Question 9

Can I keep my bank account if I change processors?

Accepted Answer

Yes. Your processing provider deposits card sales into the business bank account you choose, and changing processors does not require changing banks. You will need to give the new provider your account details and, usually, a void cheque or bank letter so deposits and fees can be set up.

Question 10

Can my processor raise my rates without telling me?

Accepted Answer

Not in Canada, for providers that follow the card industry Code of Conduct: the Financial Consumer Agency of Canada says they must give 30 to 60 calendar days' notice of fee increases or new fees, and you may exit without penalty within 70 days after an applicable change. In the US there is no equivalent code, so your merchant agreement decides, and many contracts allow changes with a notice on your statement. Read every statement message, track your effective rate month to month and get any rate promise in writing.

Question 11

Does Helcim hold money?

Accepted Answer

It can, like any processor. Under a merchant agreement, a provider may delay a deposit, hold a payment or keep a reserve when it sees risk, for example a sudden jump in volume, unusually large tickets, many refunds or chargebacks, or missing business documents. Holds are usually released once the review is finished. Read the hold and reserve sections of Helcim's own terms, keep your business details current and tell your provider ahead of time about large or unusual sales.

Question 12

What should accounting firms check in a card processing contract?

Accepted Answer

Accounting firms should check the pricing model and every fee beyond the headline rate, including monthly, PCI, statement and annual fees, and which month annual fees land in. Look at the contract length, automatic renewal and early termination fee. Ask whether a seasonal spike such as tax season can trigger a review, reserve or hold, and how fast funds are deposited. Confirm ACH pricing, whether the gateway connects to your accounting software, and how much notice the provider must give before raising rates.

Question 13

What should auto repair shops check in a card processing contract?

Accepted Answer

An auto repair shop should check how large tickets are treated, since one big repair can trigger a risk review or a held deposit if the account has a low maximum ticket size. Ask for the per-transaction and monthly limits in writing. Compare keyed-in and card-present rates, because phone payments often cost more. Look for monthly, PCI, statement and annual fees, the contract term, the early termination fee, and any terminal lease that runs separately from the processing agreement. Confirm Level 2 support for fleet cards.

Switching and contracts: 13 questions