Death to long-term contracts?
The card payments industry is a constantly evolving market, with new players entering 24/7 and offering new, enticing features such as short-term contracts. However, industry experts warn that while this sounds beneficial, the truth is much more misleading and say that merchants should see this as a huge red flag.
Short-term agreements now give acquirers the power to adjust their rates and terms whenever they please, leaving merchants vulnerable and susceptible to negative impacts on their business. There is a significant lack of protection with short term contracts which poses a huge risk to merchants and means that relying on them is a big gamble to take.
The energy market serves as a prime example of why short-term contracts are a disadvantage to any business. Many merchants who did not secure long-term energy contracts a few months ago are now regretting their decision, as prices have skyrocketed and caused many to throw in the towel, leaving them with no option but to go out of business. We’ve seen merchants' bills increase by up to 800%. That means what once was a £1000 a month bill, is now £8000!
Long-term contracts, on the other hand, provide merchants with the security and stability they need to succeed in the ever-changing card payments market. By locking in a fixed rate for a set period of time, merchants will have peace of mind knowing that they won't be blindsided by sudden changes that could harm their business.
In conclusion, short-term contracts in the card payments industry are a risky choice for businesses, as providers can change the terms at any time. Long-term contracts offer merchants stability, security, and predictability, allowing them to thrive in the long run.