Switching merchant acquirer: move card payments without losing settlement visibility

Changing merchant-acquiring provider can reduce fees or improve settlement, but the migration touches terminals, online gateways, chargebacks, refunds and reconciliation. The new provider should be tested before the old one is removed, and both settlement streams may need to run in parallel for a short period.

Define the problem before collecting new acquiring quotes

The Payment Systems Regulator found that many small and medium-sized merchants do not regularly search, switch or negotiate even where a better deal may be available. Reasons for changing provider can include high merchant-service charges, poor settlement timing, weak support, limited gateway integration or expensive terminal contracts.

Write down the two or three outcomes the business actually wants. A retailer may want lower face-to-face card fees and newer terminals. An ecommerce company may care more about international card acceptance, fraud tools and settlement reports. Without a defined objective, a lower headline rate can distract from a weaker overall operating setup.

Compare acquiring cost using your real card and transaction mix

The PSR's card-acquiring review found pricing difficult for merchants to compare because providers use different structures and headline rates. Review at least three months of acquiring statements and separate consumer debit, consumer credit, commercial cards, international cards, refunds, chargebacks, terminal fees and gateway charges.

Apply the new quote to the same transaction mix. If a merchant processes £300,000 per month, a 0.15 percentage-point difference in effective acceptance cost is about £450 per month before fixed charges. But a slightly lower rate can be offset by terminal rental, authorisation fees, PCI charges or slower settlement.

Check terminal leases, notice periods and early-exit costs before committing

The PSR identified POS terminal contracts as an important barrier to switching and introduced remedies to make switching easier. Its current rules for affected major providers include clearer contract prompts and a maximum 18-month term for POS terminal contracts. Existing merchant agreements can still contain notice, equipment-return and other obligations that need to be checked.

Do not sign the new acquiring contract until the finance team understands the cost of exiting the old one. The acquiring agreement, terminal lease and gateway agreement can be separate contracts with different suppliers. A merchant can save £3,000 on processing and still lose the benefit through an unexpected equipment termination fee.

Confirm that website, terminals and payment software work with the new acquirer

The PSR's market review found that some ecommerce gateways are acquirer-agnostic and can work with several acquiring providers, while others are tied more closely to one acquirer. Ask the gateway provider directly whether the new acquirer is supported and whether any development or certification work is required.

For physical retail, test the new terminals with the till or EPOS system, refunds, tips where relevant, contactless and any offline process. For ecommerce, test live authorisation, 3-D Secure, recurring payments, refunds and settlement reports before routing all customer traffic through the new provider.

Expect the old and new acquirer to overlap during refunds and chargebacks

Transactions processed by the old provider can still produce refunds, disputes and reserve releases after new sales have moved to the replacement acquirer. Keep access to the old portal and bank settlement records long enough to reconcile those trailing items.

Use separate accounting clearing accounts for each provider during the transition. A £5,000 payout from the old acquirer one week after cutover should be matched to old sales or reserve release, not booked as new current-period revenue. The finance team should know which provider owns each historic dispute until the old transaction population has run off.

Move in stages and prove reconciliation before terminating the old service

Choose a low-risk cutover window. Test one terminal or a small portion of online traffic, confirm customer receipts and reconcile the first new settlement to gross transactions, fees and refunds. Then expand once finance and operations agree that the new data is reliable.

After migration, return old terminals where required, cancel obsolete gateway services and confirm the final settlement and reserve position. Keep the old contracts and statements in the finance archive. A successful switch is not just one where customers can pay; it is one where finance can explain every pound before and after the cutover.

Review the first full month under the new provider against the quote that justified the switch. Compare effective acceptance cost, settlement speed, refund handling, support incidents and reconciliation time. If the new acquirer is cheaper on headline fees but creates more manual work or slower cash availability, management needs to see that operational cost as part of the result rather than declaring the switch successful on price alone.