Abbreviation for Early Termination Fee, which is a penalty Processors charge merchants for cancellation of contract or agreement prior to the expiration of the contract. The reasoning is usually that processors incur substantial expenses in signing up a new merchant including new equipment programming, file setup, billing administration, credit, background and TMF checks and network setup fees plus registration with associations. ETF fees are usually not more than $300 and may be prorated based on number of months left on contract. Under special circumstances these fees may be waived. It may be worth it to pay an ETF if the savings and improved service to switch is substantial. Some processors require 30 days advance notice in writing before the automatic renewal of a contract.

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