Most business owners sign an eftpos contract the way they sign a phone contract: they glance at the rate, nod politely, and initial every page the salesperson points to. Three years later they want to switch — and find out they're locked in with a $1,500 exit fee.
We see this constantly. And it's avoidable. The eftpos contract you sign today determines how much flexibility you'll have for the next 3–5 years, how fast you can respond if your rates get uncompetitive, and whether you'll be stung if you try to leave. Here's what's actually in one of these contracts, and what to watch for.
The Three Types of Eftpos Agreements
Australian eftpos agreements generally fall into three buckets:
1. Month-to-month (no lock-in)
The best option for most businesses. You pay for the service month-to-month, give 30 days' notice, and walk away. No exit fees, no drama. Some newer providers (think Zeller, Square, Tyro on certain plans) operate this way. The rates may be slightly higher than a locked-in deal on paper, but the flexibility is usually worth it.
2. Fixed-term contracts (36 or 48 months, sometimes 60)
The traditional model — most banks and some independent providers still use this. You sign up for a specific term, usually 36 or 48 months. The rate might be a little lower, but you're stuck. Terminate early and you pay out the remainder, plus an admin fee, plus whatever they call the "early exit charge" in the fine print.
3. Terminal leases (dressed up as contracts)
This is where it gets sneaky. Some deals separate the processing agreement from the terminal rental. You can exit the processing deal, but you still owe two more years of terminal rent — which is often baked into a separate finance company's loan that you can't cancel at all. If anyone offers you a "free terminal" on a 48-month deal, ask exactly which entity owns the hardware. We dig into this trap in our Is Free Eftpos Really Free? piece.
What's Actually in the Contract
Every eftpos agreement includes these key terms. If you don't see them, ask.
- Term length — 1 month, 12, 24, 36, 48, or 60 months. Shorter is better.
- Early termination fees — usually the greater of a minimum monthly fee × remaining months, or a flat "liquidated damages" figure.
- Minimum monthly service fee — what you pay even if your processing is zero.
- Rate structure — blended (one flat rate for everything), interchange-plus (provider's margin on top of card scheme fees), or tiered (different rates for debit, credit, premium, international).
- Rate review or "re-pricing" clauses — can the provider change your rates mid-contract, and with how much notice?
- Auto-renewal — does the contract roll over at the end, and how do you stop it?
- Equipment ownership — do you own the terminal, lease it, or rent it?
- Transaction volume commitments — some deals require minimum monthly processing, with penalties if you fall below.
Red Flags to Watch For
Here are the clauses that have burned salon owners, tradies, and hospo operators we've helped over the years.
"Unilateral rate increase" clauses
The provider can raise your rates whenever they want with minimal notice (sometimes just 30 days). You're still locked in, but your "competitive" rate isn't competitive anymore. This is the most common reason businesses come to us frustrated.
Auto-renewal for another full term
If you don't give written notice within a specific window (e.g. 60–90 days before expiry), the contract rolls over for another full 36 months. Diary the renewal window the moment you sign.
Consumables and "service" fees layered on top
Terminal paper rolls billed at $30 each. "PCI compliance fees" of $15 a month. "Statement fees" of $5 a month. These aren't in the headline rate, but they add up fast. Read our guide to hidden eftpos fees for the full breakdown.
Liquidated damages larger than the remaining term
Some contracts calculate the exit fee as the "value" of the remaining term assuming maximum processing volume. The number you're shown can be far higher than what you've actually paid so far. Check the termination calculation before you sign, not after.
How to Negotiate a Better Contract
If you know what to ask for, most providers will flex. Here's what to push on:
- Shorter term. If they quote 48 months, ask for 36. If they quote 36, ask for 24 or month-to-month. You'll often get it.
- A cap on rate reviews. Ask for a clause that limits rate increases to no more than once per 12 months and no more than a fixed percentage.
- No auto-renewal. Ask for the contract to revert to month-to-month at the end of the initial term.
- Terminal ownership or cancellable rental. You want to be able to hand the hardware back without lingering finance obligations.
- Remove or reduce liquidated damages. At a minimum, ensure the exit fee is a reasonable pro-rated figure — not a punitive one.
This is where a broker earns its keep. We negotiate these clauses on behalf of clients every week. We know which providers will quietly drop the lock-in if asked, which ones won't budge, and which ones have contract templates that favour the business.
What If You're Already Locked In?
Don't assume you're stuck. A few options:
- Check the actual exit cost. Sometimes it's less than you think — especially if you're more than halfway through the term.
- Ask for a rate review. If your current rates are uncompetitive, many providers will lower them to keep you rather than lose you to a complaint to the Financial Services Ombudsman.
- Negotiate the exit. If a competing provider wants your business badly enough, some will cover the exit fee of the old contract. We've arranged this plenty of times.
- Wait it out and plan the switch. Diary the expiry date, issue notice the moment the window opens, and have the new provider lined up.
If you want help working out whether it's worth switching now or waiting, that's literally what we do — for free.
Our Honest Take
You shouldn't have to sign a 48-month lock-in to get a fair rate. The Australian eftpos market has changed, and plenty of competitive providers now offer month-to-month terms with good pricing. If anyone tells you a long lock-in is "standard" or "how it works" — they're either out of date or not acting in your interest.
Before you sign any eftpos contract, have someone who reads them for a living take a look. That someone can be us — and it costs you nothing. We'll check the term, the exit fees, the rate review clauses, and the small print. If the deal is fair, we'll tell you. If it's not, we'll show you what's better.
For the broader picture on switching, our step-by-step switching guide covers the whole process.
Get a Second Set of Eyes
Send us the contract you're about to sign — or the one you signed two years ago that you're not sure about. We'll read it, explain what it actually means, and tell you whether there's a better option.
Book your free consultation here or call us free on 1800 595 340.