February 24, 2026
Payment processor pricing sheets show you a rate. The contract tells a different story. Here is what to look for before you sign anything with a global payment processor.
A processor quoting 1.8% plus 20 cents per transaction is quoting you their base rate for domestic cards. International card transactions — which is the product you are buying — almost always carry an additional surcharge. This is often buried in the rate table as an "international card fee" or "cross-border fee" that adds 0.5 to 2.5% on top of the base rate.
Many payment processors hold back a percentage of your transactions — typically 5 to 10% — in a rolling reserve for 90 to 180 days. This is their protection against chargebacks. For merchants with strong chargeback histories, this is reasonable. For new accounts, it is applied automatically and can create significant cash flow problems. Always ask: is there a rolling reserve? What percentage? What is the release schedule?
Understand clearly which currency you will be settled in and what conversion rate applies. Some processors settle in a fixed currency regardless of what your customers paid in, applying their own conversion rate. Others offer multi-currency settlement but charge a fee for each currency account. Neither is inherently bad, but you need to understand what the actual settlement value will be before you can plan around it.
What happens when a buyer disputes a transaction? Some processors automatically refund and charge you a fee. Others allow you to contest. The contestation window, the evidence requirements, and the fee structure for losing a dispute are all contractual terms that vary significantly between processors. Ask for the chargeback policy in writing before you sign.
Read the termination section carefully. Some contracts include early termination fees. Others include clauses that allow the processor to close your account and hold your funds for up to 180 days if they determine you have violated their acceptable use policy — a policy that can be broad enough to apply to many normal business activities. Know what the exit looks like before you enter.