Flagship Merchant Services Review
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- Date Established
- Charlestown, MA
- Interchange-plus pricing offered
- Good customer support
- Multiple products and services offered
- No termination fees
- No setup/application fees
With over a decade in the industry, Flagship Merchant Services has stable roots and a comprehensive track record. Founded in 2001, Flagship is a longtime supporter of fair contract terms like no early termination fees, no setup fees and no application fees – all charges which I consider dubious. While many processing companies these days are dropping fees like this, Flagship helped pave the way toward a more consistently fair payments landscape fee-wise. For this, I sincerely applaud them.
Back in 2012 iPayment acquired Flagship, which – in the long run – has provided additional resources and a more direct relationship between provider and processor. There were some bumps in the road in the process, perhaps due to growing pains and corporate changes accompanying the acquisition, which seems to have manifested a worrisome number of complaints in our comments section and elsewhere. I’ve read all of these remarks and take them very seriously.
In terms of general incentives, Flagship will waive your Authorize.Net gateway setup fee (usually about $100), a nice bonus for small ecommerce businesses along with their free shopping cart setup. The free mobile swiper and mobile app provided by Flagship could also come in handy. You will have to do the math for your specific needs, comparing the Flagship numbers with other providers. Overall, the company provides fair value. I’m not crazy about Flagship’s PCI compliance fee or standard monthly minimum, but these are industry-standard and fees you’re likely to contend with elsewhere as well. The PCI fee comes directly from their processor, so don’t bother trying to negotiate it. While Flagship primarily markets tiered plans, reps will gladly set up interchange-plus accounts when asked.
Flagship signs up tens of thousands of merchants each year, so complaints are always going to come up. Some complaints are isolated incidences, while others are parts of larger trends. The most notable complaint trend I’ve seen from merchants using Flagship regards fee disclosures. Many users state that fees like PCI compliance fees, non-compliance fees, monthly minimums, and non-qualified fees were not properly disclosed or explained by sales reps. Other common complaints regard funding hold and account terminations. Funding holds and risk management are complex and common issues across the industry, so I usually don’t pass any judgement regarding these complaints without full knowledge of the situations. But the failure to disclose and explain all fees is 100% preventable and entirely unacceptable.
Here’s the good news. Since you’re here reading this, you’ll get all of the fee information you need to negotiate the best contract terms possible. So while I don’t like to see so many complaints about this – and the overall rating will reflect this – if you’re careful during your account setup you can get solid service and great rates from Flagship. Don’t expect the sales rep to be 100% forthcoming, though. You will have to assess your fees carefully.
All said and done, Flagship Merchant Services makes the grade as a 3.5-star provider at the moment. I love that the company has no early termination fee, and that it does its best add value to your processing account. Flagship is doing better than average (though not without some troubles), and in many cases perform very well indeed. Check them out, and please come back to report on your experience.
If you’d like to examine your other options, check out our comparison chart for a look at some of our favorites.
Products and Services:
Flagship Merchant Services offers a pretty limited number of products and services, which can be a good sign. I like to see a provider add value to your account without trying to shove the kitchen sink down your throat. While nothing really sets Flagship apart from the pack here – and I had a hard time locating much useful information in their public advertising – the company offers everything you’d need to get started. Offerings include:
- Merchant accounts: Flagship Merchant Services is not a direct processor. The company use a third-party for processing services, mostly through iPayment (its parent company), but in some situations First Data.
- Gateway/virtual terminal: Gateways come from Authorize.Net, with no setup fee. This could save you about $100 in some cases, and is a solid bonus. This includes the option to use Authorize.Net’s mPOS mobile app and its “Simple Checkout” payment buttons for your website.
- Mobile processing: Offered through iPayment’s MobilePay. Flagship will also hook you up with a free swiper. I haven’t reviewed the app in-depth yet, but it seems capable.
- Credit card terminal sales
- Online reporting
- Shopping cart setup
Fees and Rates:
While Flagship primarily markets a tiered pricing platform, most reps are completely willing to offer interchange-plus pricing (preferable). Merchants applying at Flagship through our partnership can expect the following:
- Processing markup over actual cost: 0.30% + $0.10 (not advertised)
- Statement fee: $7.95
- Monthly minimum: $25 (negotiable)
- PCI compliance fee: $99 annually
The $25 monthly minimum means you’ll have to process about $8,000 per month on interchange-plus to avoid paying a penalty. If your monthly volume will be less than that, think about negotiating a lower monthly minimum. I consider this a better deal than their tiered plan.
Other fees include:
- PCI non-action fee: Additional $19.95 monthly (must complete PCI assessment to avoid this)
- Authorize.Net gateway fee: $7.95
So here’s the bottom line: If you avoid the PCI non-compliance fee and come in under your monthly minimum, Flagship offers fairly competitive pricing. Maybe not the lowest cost-plus markup you’ll find, but overall a good deal for most merchants, and a good overall value.
Overall, I am satisfied with the value provided by Flagship Merchant Service.
Contract Length and Early Termination Fee:
Flagship Merchant Services has no early termination fee, making your account with them a month-to-month agreement (which is awesome). Make sure to cancel your account as per the instructions in your contract, though, or else Flagship will continue to take monthly fees from your bank account. I suggest you vigorously confirm your cancellation, and get it in writing.
You should note that some merchants have reported difficulty closing their accounts, a problem that Flagship has historically blamed the processor for. The good news is that if this occurs and you are charged monthly fees when your account should have already been cancelled, Flagship will generally reimburse you that fee.
In part to rectify this issue, in 2014 Flagship instituted a company-wide reporting system for merchant contact. If you contact Flagship for any reason, the contact will be logged and addressed same-day. This will help to make representatives more accountable for handing account closures in a timely fashion. But remember – it’s up to you to file the actual paperwork. The sooner you fax it over, the sooner your account will be closed.
Sales and Advertising Transparency:
While I have confidence in the sales team at Flagship, and have spoken to their salespeople in the past, I believe that a company’s website sets the tone for how it does business in an overarching sense. This marketing is controlled and decided at the corporate level, making it a good predictor of the general sales practices and attitude.
Flagship makes very few fee disclosures on their website, offering visitors little initial guidance or educational material. The only rate quote provided is a regulated debit quote, which is much lower than the overall average for transaction cost:
Rates start at 0.38% + $0.19 per transaction with Free Account Set up!
Consider now that the average interchange fee is close to 1.8%. They don’t even offer a footnote explaining that this rate will only apply to some debit transactions, nor do they go on to explain how rates are decided anywhere on the Flagship site. While I accept that this is a marketing choice and that – in their defense – debit tends to make up 40-50% of transactions overall, I would rather they didn’t provide any rate quote than a single deceptively low number that is likely to cause at least some confusion, regardless of how thorough the salespeople are on the phone. While this is a low regulated debit quote, that doesn’t necessarily mean that your overall cost will be lower.
Furthermore, although they advertise their credit card terminals with some vigor, Flagship fails to disclose any pricing information. While most providers don’t disclose any pricing information, the best ones do (Helcim and Dharma Merchant Service, to name a couple).
When visiting the Flagship homepage, readers might be impressed to see that Top Ten Reviews rated them the number one merchant account provider in the industry for eight straight years. That’s a pretty big deal, you might think. While it certainly seems like a commendable achievement, I can tell you that Top Ten Reviews is basically worthless when it comes to assessing credit card processing providers. For instance, just in terms of fees, they completely ignore the $100 annual PCI compliance fee charged by Flagship, as well as the $20 monthly PCI non-action fee. They also ignore important considerations like customer satisfaction and sales/advertising transparency. Interchange-plus pricing? I don’t think that Top Ten even knows what that is. So keep this in mind and don’t get sucked in by this marketing.
On the bright side, I’m glad to see that Flagship Merchant Services uses an in-house sales team for most of its accounts, since independent sales reps are known for unregulated activities and overall poor training. I do still have concerns, however, so if you’ve experienced otherwise, please leave us a comment. Or if you can confirm their dedication to your satisfaction, please chime in too!
Customer Service and Technical Support:
While Flagship Merchant Services advertises 24/7 customer support (thumbs up), many merchants have reported a lack of overall quality. During business hours you are likely to get in touch with an in-house representative to help you (which is ideal!), but outside of regular business hours you may see a decline in the quality of service (this is not unusual in this industry). Also in many cases Flagship will have you contact the processor directly, and I haven’t exactly heard stunning feedback about iPayment‘s customer service reps.
I really love that Flagship makes the person who sold you the service your continuing point of contact as a dedicated account manager. Unfortunately, this means that if you get an unresponsive account rep, you could be in for a bumpy ride. While I have every reason to believe that most Flagship reps do a great job, it’s obvious to me that some have been missing the mark. If this happens, I’d encourage you to escalate the matter to his or her manager, and even ask to have your account transferred to a different representative if you simply can’t make it work. At the end of the day, Flagship wants you to be happy. Sometimes you just need to be aggressive to make that happen.
The other good news here is that, like I mentioned earlier, Flagship has instituted a new company-wide customer contact reporting system. This means that your calls and emails are logged and reviewed, and representatives are required to address your concerns the same day you voice them. This added level of accountability has already improved merchant support at Flagship, and I have a good feeling about their future in this regard.
Still, you should be aware that in the past there have been issues, as evidenced by our readers’ comments, especially during 2013.
Furthermore, the Flagship FAQ leaves a lot to be desired, and it’s the only self-service customer support available.
Negative Reviews and Complaints:
Flagship’s internet reputation had a rough year in 2013, and hasn’t rebounded that well in 2014 or 2015. You can currently find 57 complaints on Ripoff Reports, as well as about 75 complaints in our own comments section. Flagship has an A- rating with the BBB, with 174 complaints in the past three years. 45 of those complaints came in over the past 12 months, demonstrating the the complaint volume has been steady and is not rising. In addition to the 174 complaints, Flagship has been negatively reviewed 56 times on the BBB. You can find an additional 50+ complaints on ConsumerAffairs.com.
Some of the most common complaints with Flagship Merchant Services include:
- PCI non-action fee: While I don’t really like to see this fee at all, especially when you’re already paying a PCI compliance fee of $99 with Flagship – the fee itself is not my problem here. The problem is that account representatives have in the past failed to help merchants avoid this fee in many cases. The cost is an additional $19.95 per month for non-action. But the good news here is that as of mid-2014 Flagship has stepped up its efforts to help merchants avoid this fee by having account reps discuss it with merchants during their welcome call. I’m hoping to see this complaint peter out with time. If you complete the PCI compliance questionnaire, you can avoid this fee.
- Difficulty cancelling service: This comes up over and over and over again, so I know something is up over there. Having no early termination fee starts to lose its meaning when you’re paying $50+ per month for a service you’re not using and that you wanted to get rid of. I’m hoping to see this complaint taper off, since Flagship Merchant Services has taken initiative to increase accountability and transparency when it comes to account rep and merchant communications. If you feel you’ve been treated poorly in this regard, Flagship will usually give you at least a partial refund. It seems like, as of late 2015, this complaint is on the down trend.
- Poor customer service after signing: Having your salesperson as a continuing point of contact can make for an overall excellent support experience. Unfortunately, this is not always the case. When your account representative becomes unresponsive, it can be a nightmare. While I believe that Flagship has taken steps to correct this issue, time will tell if they’ve done enough. Results seem mixed based on recent complaints.
- Billing issues/funding holds: In these instances, Flagships points the finger at its processor iPayment, and perhaps rightfully so. After all, these mistakes often do come directly from the processor. In my opinion, though, Flagship had ought to provide intensive arbitration and mediation on the merchant’s behalf. This includes account holds/freezes, which you can do your part to avoid by reading this article. Some of these issues are unavoidable though, so these complaints should be taken with a grain of salt.
The good news here: Flagship is generally willing to provide at least partial refunds to make things right. In fact, Flagship has become one of the most accommodating and generous providers I’ve seen in terms of refunding fees, especially when the BBB is arbitrating. But ideally this wouldn’t be an issue to begin with.
Positive Reviews and Testimonials:
You can find a couple of merchant testimonials on the Flagship homepage, as well as a small list of logos for companies they provide services for. Aside from that, you won’t find any intensive case studies or reviews. I have, however, noticed a recent influx of glowing reviews on the BBB and Consumer Affairs sites.
The most substantial recommendation for Flagship Merchant Services comes from the popular review site Top Ten Reviews, which reviews everything from consumer products to career choices. While Top Ten may honestly and unbiasedly believe that Flagship is the best merchant account provider out there, I have to disagree with them.
Unlike Top Ten Reviews, we only review merchant services and software here. It seems to me that Top Ten misses some very important aspects of the review process. They completely ignore the $100 annual PCI compliance fee charged by Flagship, as well as the $20 monthly non-compliance fee. They also ignore important considerations like customer satisfaction and sales/advertising transparency. Interchange-plus pricing doesn’t seem to be a phrase in their vocabulary. To be frank, I think that the merchant account reviews from Top Ten are driven by arbitrary data and superficial appearances. So while Flagship has indeed won their top spot seven years running, I question the meaningfulness of this award – and so should you.
Not to say this is a bad thing necessarily. You should just realize that it’s more of a marketing ploy than a meaningful assessment.
There’s a lot to like about Flagship, to be sure. The company generally provides a good value, deals with most active sales in-house as far as I know, and lets you leave at any time without penalty. I love the freebies offered, even if they’re presented in a somewhat gimmicky way at times. Flagship is doing a good job overall. It seems like they slipped a little bit in 2013 – maybe due to growing pains stemming from their acquisition by iPayment in 2012 – but things have mostly stabilized by 2015 even though not all issues are entirely resolved.
While some complaints that come in under the Flagship name are actually criticisms of its processors, namely iPayment, it’s Flagship’s responsibility to provide excellent arbitration, mediation, and prevention when it comes to processing issues. Some of these issues are unavoidable, not to mention incredibly frustrating for merchant, so make sure to take complaints regarding chargebacks and funding holds with that as context. I don’t think that Flagship’s marketing at the corporate level is nearly as straightforward or useful as other providers, but it’s not hurtful either. Or at least it wouldn’t be if sales agents filled in the gaps effectively. Unfortunately, I’m not sure this happens 100% of the time.
Flagship gets 3.5 out of 5 stars for the moment. They perform better than the industry standard, but have room for improvement. I’m comfortable recommending Flagship to you, but – as always – encourage you to enter your sales consultation reservedly and as an educated, informed merchant. So read up, then go ahead and check out Flagship Merchant Services!
If you’d like to see what other options are out there, take a look at our comparison chart.