An early termination fee (ETF) is a penalty charged to a merchant when a contract is ended before the agreed-upon timeline. ETFs are commonly used in the payments industry, often by processors and solution providers. An ETF helps the processor or solution provider replace revenue that would otherwise be lost when the contract is prematurely terminated.

ETFs can be a flat fee or a percentage of the remaining contract. For example, if you want to back out of a five year contract after the first year, your ETF could reflect a portion of the revenue you would have generated over the next four years.

An early termination fee must be disclosed in the contract or merchant agreement. Be sure to check the fine print so you understand cancellation fees before entering into any binding agreement.

AltoPay’s chargeback management solutions do not require a long-term contract. You can cancel any time without an early termination fee. And our merchant accounts come with transparent pricing, so you know exactly what to expect from day one