Card machine contracts after the PSR remedies: what changed and when customers can switch

The Payment Systems Regulator's market review into card-acquiring services, reported in November 2021, found that the market was not working well for businesses with annual card turnover up to £50 million. The symptoms will be familiar to anyone who has tried to change card provider: prices that are hard to compare, contracts for the card machine that run longer than the contract for the processing and renew for fixed terms, and no clear moment at which a business is prompted to look around. The PSR's own finding was that these features, together, explained why many businesses never considered switching.

The card machine contract was singled out because it did the most damage. A business could leave its acquirer but still owe every remaining month on a three-year terminal lease, with early termination fees that could include all payments due to the end of the term. The machine, not the rate, was what held people.

The PSR's final decision, PS22/2, was published on 6 October 2022. It gave three specific directions to the 14 most significant providers of card-acquiring services to UK businesses, including their associated companies and the independent sales organisations that sell on their behalf. Checked October 2026.

The 14 directed providers are listed in PS22/2 and were updated by PS24/1 on 29 May 2024, which also set up a way for the obligations to move automatically when a directed provider's business transfers to another firm. The PSR has said it will monitor compliance; in October 2024 it asked businesses whether they could find the summary box and quotation tool, whether they had seen trigger messages and acted on them, and whether they had had trouble ending a terminal contract since the cap, to inform a progress report. We have not found that report published; the sources list the request.

It caps the initial term of the card machine contract at 18 months. It does not cap the processing contract, which is a separate agreement and may have its own minimum term; in practice many providers now align the two, but check. It does not apply to a terminal bought or hired from a third party with no connection to your acquirer, which the PSR noted is uncommon for businesses under £10 million. It does not make exit fees disappear; it requires them to reflect the provider's actual costs and to have been explained before you signed.

The rolling monthly term after the minimum is the part that changes behaviour. Under the old pattern a contract that was not cancelled in a narrow window renewed for another fixed term. Under the directions, once the first 18 months are up, a business is on no more than 31 days' notice. That is what "when customers can switch" now means for most small businesses: at any point after the initial term, with a month's notice on the machine.

1. The date you signed. A terminal contract entered into on or after 6 January 2023 with a directed provider or its reseller should have an initial term of 18 months or less. One signed before that date completes its original term, then moves to monthly.
2. Who the provider is. The directions bind the 14 named providers, their associated companies and their contracted resellers. If your machine comes through a reseller, ask which acquirer stands behind it. If your provider is not one of the 14, the cap does not apply, though many smaller providers offer similar terms by choice.
3. Your card turnover. The terminal cap applies up to £10 million a year; summary boxes and trigger messages up to £50 million.
4. The minimum term and what follows it. Find both in the contract. After the minimum term the renewal should be no more than 31 days.
5. The exit fee. It should have been set out before you signed and should reflect cost. If it was not explained, or looks like every remaining month's rental, raise it with the provider and, if needed, the PSR.
6. The summary box. Log in to your provider's online account and find it. It is your own prices in a comparable format, and it is the fastest way to put your current cost beside a quote.
7. The trigger message. Look at your last few invoices. If you are on a rolling contract there should be one on each; if you are on a minimum term, one arrives around 30 days before it ends. Its arrival is the moment to compare.

The summary box exists so that a business can compare like with like. Take yours, take a quote on the same basis (the rate on each card type, the monthly fees, the terminal rental, the term and the exit terms), and compare the total over a year of your actual turnover, not the headline rate. A lower rate on a longer term with a higher terminal rental is not always cheaper. Ask any new provider for the same four things the regulator asks the old one to show: the price, the non-price terms, the minimum term, and what it costs to leave.