The Hidden Cost of Embedded Payment Lock-Ins: How POS, PMS & SaaS Systems Trap Businesses in Expensive Processing Agreements
Many businesses sign up for a POS system, property management system (PMS), or SaaS platform without realizing they’re also locking themselves into an exclusive, high-cost payment processor.
Embedded payment lock-ins mean businesses can’t choose their own processor, can’t negotiate better rates, and often end up overpaying for transactions. Whether it’s a hotel locked into a PMS that only works with one processor, a restaurant forced to use a POS provider’s payment system, or an eCommerce store penalized for switching processors, these setups limit flexibility and inflate costs over time.
Here’s how embedded payment lock-ins work, their hidden costs, and how businesses can escape or avoid them altogether.
1. How POS, PMS & SaaS Providers Lock Businesses Into Expensive Payment Processing
🚨 POS Systems That Force Built-In Processing
Many popular point-of-sale (POS) systems require businesses to use their in-house payment processing services at inflated rates. Examples include:
Toast (restaurant POS) – Forces users to use Toast Payments with no option to integrate an external processor.
Square (retail & restaurant POS) – Completely closed system that doesn’t allow third-party payment processing.
Clover (varies) – Some versions allow third-party processors, but many merchants unknowingly get locked into higher processing fees.
🚨 Property Management Systems (PMS) That Lock Hotels & Rentals into Costly Processing
Hotels, vacation rentals, and property managers rely on PMS software to manage bookings, payments, and operations.However, many force businesses to use their in-house payment processor at inflated rates:
Opera PMS (by Oracle) – Requires the use of Oracle Payment Interface, limiting processor choice.
ResNexus – Forces users into their built-in payment system with limited ability to negotiate rates.
Cloudbeds – Includes Cloudbeds Payments and discourages external processing.
🚨 SaaS Platforms & eCommerce Providers That Penalize Processor Changes
Some eCommerce and SaaS platforms technically allow external processors—but penalize businesses that try to use them.
Shopify Payments (powered by Stripe) – Businesses that choose an external processor like Authorize.net or PayPal are charged extra fees per transaction.
BigCommerce & Wix – While allowing third-party processors, they make their built-in solutions more cost-effective to steer users away from alternatives.
💡 These lock-ins mean businesses lose the ability to negotiate processing fees, optimize costs, or switch providers when better options become available.
2. The Hidden Costs of Embedded Payment Lock-Ins
🔴 Higher Processing Fees with No Negotiation Power
Because the POS/PMS provider controls both the payment system and software, they charge higher-than-average processing rates and eliminate competition.
Businesses can’t negotiate better rates, even as transaction volume increases.
🔴 Difficult & Expensive Transitions
Businesses that try to leave face costly early termination fees, contract buyouts, or the need to purchase new hardware.
PMS & SaaS providers often charge high migration costs to switch to another system.
🔴 Limited Control Over Payment Workflows
Many of these systems restrict access to raw transaction data, chargeback management tools, and advanced payment features.
Integrating third-party fraud tools, gateways, or reporting platforms is often blocked.
💡 By the time businesses realize they’re overpaying, leaving the system becomes difficult and expensive.
3. How to Avoid Embedded Payment Lock-Ins & Maintain Flexibility
✅ Choose Processor-Agnostic POS, PMS & SaaS Platforms
Look for solutions that allow third-party payment processor integration.
Examples of more flexible systems:
POS: Revel, Lightspeed, Clover (third-party versions)
PMS: Mews, WebRezPro, StayNTouch
eCommerce: WooCommerce, Magento
✅ Negotiate Processor Terms Before Signing a Contract
Ask upfront whether payment processing is locked in.
If a vendor requires their processor, demand a rate guarantee and clarity on additional fees.
✅ Work With a Payment Consultant to Ensure Cost Savings & Flexibility
Many businesses don’t realize better, more cost-effective options exist until they’ve already signed a contract.
A consultant can help identify better processing setups, negotiate fees, and prevent lock-in agreements.
💡 The right payment setup gives businesses control over their costs and flexibility for future growth.
4. How PlutosPay Helps Businesses Escape & Avoid Payment Processor Lock-Ins
At PlutosPay, we help businesses:
🔹 Identify processor-agnostic POS, PMS & SaaS systems that allow flexibility.
🔹 Audit payment processing contracts for hidden costs & restrictive terms.
🔹 Negotiate better processing agreements before businesses get locked in.
🔹 Assist in transitioning away from overpriced or restrictive payment setups.
💡 The result? Lower fees, more control, and no long-term payment restrictions.
5. Key Takeaways
✅ Many POS, PMS & SaaS platforms force businesses into expensive processing agreements.
✅ Processor lock-ins lead to higher fees, limited flexibility & expensive exits.
✅ Businesses should choose processor-agnostic systems to maintain long-term control.
✅ PlutosPay helps businesses avoid or escape restrictive processing agreements.
💰 Want to ensure your business isn’t trapped in an expensive payment setup? Let’s talk.
Conclusion: Take Back Control of Your Payment Processing
Businesses should never be forced into overpriced payment processing agreements just because they chose a POS, PMS, or SaaS platform. By choosing processor-agnostic solutions and negotiating terms upfront, businesses can reduce costs and keep their options open.
At PlutosPay, we help businesses identify the best payment setup, avoid restrictive agreements, and ensure long-term savings.
📩 Contact us today for a free payment system evaluation.