11 Nov POS System Trap: The Hidden Costs of “Preferred” Payment Partnerships
New POS System Scam Alert: Don’t Get Caught Paying More Than You Should
Point-of-Sale (POS) and reservation systems have become essential tools for Canadian small businesses. They help track inventory, process payments accurately, and simplify daily operations. But behind the convenience, a troubling trend is emerging—one that could quietly drive up your monthly costs.
Three Parts, One POS Ecosystem
To process a payment, three players must work together:
- The POS system – your terminal or app.
- The gateway – the bridge that routes payments securely through the networks.
- The processor – the company that settles funds into your account.
Each used to be separate. You could choose based on price, performance, or support. Not anymore.
When “Preferred Partnerships” Cost You
Many American-based POS providers are now tied to specific processors and gateways. Some have merged outright. Others have formed exclusive “preferred partner” agreements.
Here’s what that means for merchants:
A gateway that once worked with multiple processors now charges a large monthly fee unless you switch to their partnered processor. In some cases, the same setup that cost $0 last month now costs hundreds, unless you move your business to their chosen partner.
Switch, and the fee disappears. Stay independent, and you’re penalized.
It’s not just inconvenient; it’s manipulative. And for many small businesses, it can feel like there’s no way out.
Why This Matters for Canadian Businesses
Even if your business operates in Canada, many POS systems are imported from U.S. vendors or use global gateways subject to these same mergers. The fine print is creeping into Canadian contracts, too.
Hidden fees. Long-term exclusivity clauses. Limited processor options.
All wrapped in “service upgrades” that sound helpful—but cost you more in the end.
What You Can Do
Before signing a new POS or gateway agreement:
- Ask who controls the gateway and processor.
- Request all fees in writing, including those tied to using a non-partner processor.
- Get an independent review of your proposal or recent statement.
Fee Advocates can help. We work independently of banks, processors, and POS vendors, giving you clear, unbiased advice. We’ll map your fees, identify coercive clauses, and show where savings are possible—without pressure or sales pitches.
POS systems should simplify your business, not hold it hostage.
If you’ve received notice of new gateway or processor fees, or just want a second opinion… don’t wait for the next billing cycle to find out how much it’s really costing you.