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Have you decided to cancel your current merchant services?
Whether you’re closing your business or you have another reason for canceling your merchant services (are you paying excessive fees? Are you struggling with the lack of support?), this blog post will take you through how to cancel First Data merchant services (now called fiserv).
When switching to a new payment processor, it’s a good idea to always try the company’s toll free line and see how long it takes you to navigate their support lines (more on this to come). While companies often have a fast and easy access line for sales, support lines (especially when it comes to canceling) are often much different.
We’ll also cover how to find a credit card processor that might be a better fit for your business.
How Do I Cancel My Merchant Service? The Problem with First Data Contract Cancelation
Like many other merchant service providers out there, the cancelation process is not designed to be an easy one. From year-long contracts to cancelation fees, the credit card payment processing industry is known for having a difficult cancelation process (although there are some exceptions, which we’ll cover later in this blog post).
Here are some things that you’ll face when canceling your First Data contract:
- The Early Termination Fee. In order to reduce this fee, you may have to delay canceling your account for several months.
- A Strict Cancelation Process (and a Small Cancelation Window). You must also follow a very defined cancelation process and avoid the automatic renewal. The automatic renewal clause stipulates that you’ll be on the hook for up to three years if you don’t cancel within the time period specified in your contract. The safest way to cancel your contract is to do so at the end of the term.
- An Additional Cancelation Fee. In addition to the early termination fee, you’ll also have to pay a cancelation fee.
Additional Non-Cancelable Associated Contracts (Like Hardware Contracts). In addition to the primary contract, there are also associated contracts that you might be bound by. These can be tricky as these contracts often have longer terms than the primary contract. For example, if you leased equipment through First Data, you’ll also be bound by their equipment lease contract, which is 48 months long and cannot be canceled. Indeed, the hardware cancelation policy is particularly difficult to terminate.
The only thing you can do to get out of the contract is to pay the remaining total owed, which has to be made in one lump sum. Put another way, you may be stuck still paying the second contract even though your main contract has ended. You also can’t use your Clover hardware with another payment processor either unless your new payment processor of choice does business with First Data.
- Successfully Return the Leased Hardware. Finally, you have to successfully return your leased hardware after the contract has been canceled or you’ll continue to be billed. You’ll be responsible for ensuring it successfully makes it through the mail, too.
How to Cancel First Data Merchant Services
1. Locate Your Merchant Agreement
When it comes to how to cancel First Data merchant services, the first step is to locate your merchant agreement. You’re going to want to read it carefully to ensure that you don’t end up paying additional fees that you might have been able to avoid.
Keep in mind that your contract could be in a paper or electronic form; if you can’t find it, you can also request a copy of it through First Data. You’ll need your merchant ID, which should be in your statement, in order to do this.
2. Locate the Effective Date
The effective date is the date that First Data approved the contract.
Your contract should tell you where to find the effective date, but typically you can find it at the beginning of your contract or in a section called Term and Termination.
3. Locate the Initial Term (and Calculate the End Date)
In the same Term and Termination section as above, you’ll typically be able to locate the initial term and how it’s defined. Generally speaking, the initial term is three to four years.
Some First Data contracts actually include the initial term in the original application you filled out.
With the effective date and the initial term, you can then calculate the end of the initial term.
4. Determine if You’re Inside or Outside the Initial Term (and Determine the End of Your Renewal Term, If Required)
The next step is to determine if you’re currently in the initial term or outside of it. If you’re still inside the initial term, you can skip to step #5 below. Otherwise you will need to keep reading as you have officially entered your renewal term. If that’s you, you’ll need to determine how far into your renewal term you are. Typically, the renewal period can be month-to-month or up to six months.
5. Check the Termination Notice Requirements
After you’ve completed the steps above, you need to provide notice that you’re going to terminate your contract. On this front, there are several requirements you’ll have to meet:
- Provide Notice by a Specific Date. First Data’s standard notice time is 30 to 60 days in advance, although it can be a smaller time period for month-to-month contracts. This information is typically found in the Term and Termination section.
Pro Tip: Keep in mind that companies typically prefer to have notice in their hands a few days prior to the actual notice date.
- Provide Notice Per First Data’s Specific Requirements. In the Notice section of your contract, it will specify how to provide termination notice. Typically notice must be provided in writing and must be sent to a specific address via a specific delivery method such as email, mail or fax. Be sure to also have proof that First Data received your termination notice by the required date in the event that you’re mailing your termination notice.
6. Take Note of Any Cancelation and Related Fees
Everyone has to pay a cancelation fee when terminating their contract, in the form of a flat fee. However, if you decide to terminate your contract early, you’ll also be required to pay the early termination fee on top of the standard cancelation fee.
7. Return Leased Equipment (if Required)
Keep in mind that leased equipment typically isn’t cancelable during the first initial term (i.e. during the first 48 months). You can cancel afterward, but there are specific requirements in order to do so. You may even have to write a second termination notice. Once again, ensure that you have proof that you mailed the hardware back in the event that it gets lost in transit. It’s also a good idea to take pictures of the equipment to ensure that you aren’t held responsible for any damage that could happen during transportation.8. Get Confirmation of Termination and Watch for Unauthorized Charges
Lastly, ensure that you get confirmation from First Data that your contract has been successfully terminated and follow up if you don’t hear from them. Keep an eye out for unauthorized charges along the way.How to Find Alternatives to First Data Merchant Services
There are a lot of reputable credit card processors out there to choose from. While we are biased, we recommend Yocale Pay as it offers wholesale rates with greater transparency: no contracts, no early cancelation fees/early termination fees or American Express surcharge fees.
Many businesses out there may be paying as much as $4,000 a year in unnecessary payment processing fees and our mission was to reduce these fees. 
