Cayan (Merchant Warehouse) Review
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- Date Established
- Boston, MA
- Interchange-plus pricing offered
- Good customer support
- Multiple products and services offered
- No termination fees
- No setup/application fees
Note that in early 2015, Merchant Warehouse rebranded itself as Cayan.
We’ve had good things to say about Cayan for years, and we’re not the only ones. Cayan has a great reputation, with many independent reviewers offering praise alongside industry awards. They even received the Electronic Transaction Association’s ISO of the Year award in 2009, which is a big deal in the merchant services industry. They’ve been in business since 1998, maintaining corporate headquarters in Boston, Massachusetts, and have kept up a positive buzz since the beginning.
The lack of an early termination fee (ETF) remains one of the major selling points for Cayan services. The industry standard is a three-year contract with early termination fees averaging at about $400, but sometimes exceeding $1,000. I always encourage merchants to negotiate the ETF out of their contracts, so it’s really a huge relief to see that you won’t have to worry about it here.
You also don’t have to worry about expensive third-party leases being shoved down your throat here (as they are with so many other providers). Cayan is literally one of the only providers to list prices alongside their terminal selection (believe it or not). Furthermore, their prices are extremely reasonable. I know this sounds so simple, but trust me – it’s essentially unheard of in this industry.
(If you’re interested in new and alternative payment technology, check out my detailed summary of Cayan’s new Genius Customer Engagement Platform below.)
You’ll find a number of negative reviews and complaints for Cayan online. They sign up thousands of merchants each month, so even though you can find a couple hundred complaints online, it’s not a big percentage of Cayan’s overall volume. More importantly, though, I was thrilled to see how well this company handles complaints in the public forum. Responses are not at all robotic, and representatives almost always acknowledge that Cayan shares the blame. In most cases, Cayan is willing to negotiate a satisfactory refund or agreement.
Cayan gets 4 out of 5 stars, a highly commendable rating. They provide high-quality products and services, conducting business ethically and respectfully. They don’t get a perfect score for a few reasons. For one, their complaint volume is a little high. I know it’s only a small percentage of their business overall, but it’s more than I like to see for a business of this size. Ideally, these complaints should be handled in-house before the merchant feels the need to go to a third party site. Second, Cayan doesn’t provide any information about interchange-plus pricing on their site, which we consider to be the fairest, most transparent pricing model for the majority of merchants. (They do offer it, though.) I’d also like to see a better disclosure of PCI compliance fees, and to have this fee charged monthly (prorated) instead of annually.
Overall, Cayan gets my seal of approval. I’d be happy to recommend them to all small and mid-sized businesses, especially those interested in new and alternative payment technology. Keep up the good work over there!
Check out the full review below for more info, and don’t forget to comment!
Products and Services:
With an impressive collection of products and services, all neatly and transparently cataloged on their site, Cayan stands out in this category. I like that they keep the focus on processing and marketing rather than delving into payroll solutions and other business services. This allows Cayan to provide a solid line of products that remains navigable and focused. Their offerings include:
- Merchant accounts
- Check processing
- Terminal sales: Cayan earns major points with me in this category. Most providers will set you up with expensive, non-cancellable leases that rack up thousands of dollars in fees for you. Cayan does the exact opposite. They take care of their own terminal sales and provide extremely fair prices for their products. Almost no merchant service providers will disclose affordable terminal prices on their websites. Good work Cayan!
- Gateway/virtual terminal: You get free use of a gateway and virtual terminal with your account.
- Mobile processing: Using the free MerchantWARE Mobile app, you can process credit cards from your smartphone. If you want to swipe cards, you’ll have to get a swiper as well (not free).
- Processing software
- Gift card program
- Cash advances
Genius Payments Platform:
We should take a minute to talk about Cayan’s newest product, a customer engagement platform called Genius. (Also note that Customer Engagement Platform and Genius are both registered trademarks.)
I was pretty skeptical of this service because a term as vague as “customer engagement platform” can lead to pretty disappointing results in my experience. It’s also a little difficult to figure out exactly what this service entails at first. Is it hardware, software, POS? No pictures or images of these products in action exist in the main ads for Genius. Even the “Demo” video doesn’t exactly demonstrate real-world use.
This is not to say I dislike these products. I actually think the Genius line has some cool offerings that could prove useful to merchants interested in getting ahead of the curve on processing technology.
Let’s ditch the term customer engagement platform for a minute though. Really, for merchants, it’s more of an alternative payment platform with mobile marketing features, including both hardware and software. Genius also features unified reporting, automatic software updates, and a so-called “out of scope” PCI solution (more on these below). Let me break down the Genius components for you:
1. Standard Payments
- Standard credit and debit payments
- Loyalty, reward and gift programs
2. Mobile Processing
- Mobile app and card reader
- Virtual terminal
3. New and Alternative Payment Technology
- Near field communication (NFC): This technology allows customers to pay simply by placing their phone in front of the reader to access their mobile wallet (such as Softcard). iPhone don’t currently support NFC, though, and Apple doesn’t have plans to, so that removes a big demographic from the pool.
- QR code payments: You know those little black and white square things? They’re called QR codes. Some services allow you to use a unique QR code to make payments. For instance, LevelUp (4.5 stars) offers a QR-based payment service. PayPal will also be releasing this type of service in early 2014 to allow customers to pay in-store with a QR code. Many loyalty programs also work based on QR codes, such as SpotOn.
- EMV chips: EMV cards are already beginning to hit the market, adding security with an embedded circuit chip. This so-called “smart card” technology will be standard security in the US starting in 2015, making terminals without EMV readers obsolete.
4. Mobile Marketing
- Digital rewards, coupons, and offers via SMS: This services allows you to send SMS messages to subscribing customers, and can even target customers who are in the vicinity of your store. I know I’d be more tempted to stop at the local coffee shop on my way to the bank if I got a coupon sent to me as I passed by. So I’m intrigued by this service. You can find similar services elsewhere, such as at Tatango, so if all you want is SMS coupons it might make sense to shop around.
- Cloud-based software updates for new capabilities (I really like this)
- Unified security through tokenization and encryption, offering an “out of scope solution,” meaning PCI compliance is not an issue (I really like this, too)
- Omni-channel extension, which basically amounts to a unified reporting system that allows merchants to view all transactions across all payment systems (mobile, in-store, and ecommerce) in one place and via one login.
Okay, so now let me give you a breakdown of the Genius family of products:
- Genius ITX: This is the flagship product, a fully integrated countertop POS system. Includes all of the above (standard payments, new payments, mobile marketing) except not mobile processing (see Genius EX below).
- Genius STX: Exactly like Genius ITX, except it comes as a standalone device for merchants that don’t need a full POS.
- Genius TX: Includes standard payments, mobile marketing, and QR scanning (via integrated LevelUp). EMV and NFC are optional add-ons.
- Genius EX: This is really just mobile processing and a virtual terminal. It’s not a novel service, and doesn’t seem to add any benefits beyond these two fairly ubiquitous services. Calling it “customer engagement” might not be the most accurate marketing. For me, this doesn’t really fit with the rest of the Genius line, but it might offer some advantages over Cayan’s MerchantWARE mobile processing app and virtual terminal given the “other features” discussed above.
Do you see how these different packages and their cryptic names could be confusing? I’d like to see this all marketed more clearly. I don’t actually think that Cayan is trying to be deceptive here, though.
Fees and Rates:
Like so many processors, Cayan doesn’t advertise any rates or fees on its website. This makes sense in some ways, because rates and fees will vary widely from one merchant to the next based on a number of variables. I do think, however, that they could disclose at least some standardized fees along side descriptions of the pricing models they offer and the factors that affect rates.
They do offer cost-plus pricing for all merchants, although you’ll still likely have to contend with their industry standard $25 monthly minimum. If you have a higher volume, this won’t matter to you. If you have a lower volume, try to negotiate this down to an acceptable level (I’ve seen low-volume merchants get the minimum down to $5 with Cayan.)
They charge a $7.95 statement fee, which is pretty low and generally fair in my opinion.
The $99 PCI compliance fee seems to raise the most eyebrows among merchants. It’s a little steep, since the industry standard is closer to $80, but an extra dollar per month isn’t a huge deal. The real annoying thing is that they charge it in one shot instead of divided monthly, and they don’t prorate it or offer partial refunds from what I’ve seen. If you decide to switch providers the month after they charge for PCI, you’re stuck paying for the whole year.
In some cases, you’ll have to pay a 35% restocking fee on a returned terminal if you’ve removed its protective film or stickers. From what I’ve seen, though, Cayan is willing to make exceptions to this, especially if you simply can’t get the terminal to work.
Some fees you won’t see:
- No application fee
- No set up fee
- No annual fee
- No early cancellation fee
That’s what I like to see!
Contract Length and Early Termination Fee:
Cayan offers the best of the best in this category. They have no cancellation fees, making your account ostensibly month-to-month! You’ll still have to go through the cancellation procedures in order to stop them from billing you when you decide to stop using your account, but there is absolutely no penalty for doing so. Good job Cayan!
Sales and Advertising Transparency:
Looking at the Cayan site, I’m really impressed. They have one of the most comprehensive and professional looking sites I’ve seen in the industry, without being overwhelming or confusing. It’s also incredibly accommodating and not at all pushy. You’ll find few sales gimmicks, and no bold claims or misleading information anywhere. Their salespeople – in my experience – live up to the friendly and helpful air of the website. I spoke with a sales agent on the phone and via live chat. Both exchanges were pleasant and not at all deceptive.
I would have liked to see some articles or even pages devoted to rate models such as interchange-plus or tiered systems. While I trust Cayan to make ethical decisions and set merchants up with the best pricing for their unique needs, disclosing some of this information in plain sight would increase transparency. As of now, information about cost-plus pricing is conspicuously absent from the extensive articles and resources offered at Cayan.
While I don’t usually like to see “price match guarantee” style sales gimmicks, the Cayan $100 Guarantee seems somehow more plausible because of the low payout. Other providers promise $500 or $1,000, or even a full year of free processing – promises that smell a little fishy to me. I also have more faith in this promise because I’ve read actual reviews from people who have received a $100 check from Cayan.
Overall, I love all of their resources and I believe Cayan makes an admirable effort to market in a fair and honest manner. It’s also nice to see their public presence via Twitter, LinkedIn and Facebook.
Customer Service and Technical Support:
The support offered by Cayan looks stellar. With live chat from 9AM to midnight on weekdays, email support 9AM to 6PM (EST) on weekdays, and phone-based support 24/7, they’re outdoing a lot of the competition here. Furthermore:
We pride ourselves on providing World-Class Service to our customers. Our large in-house support staff undergoes weeks of training to ensure that we provide honest, clear-cut answers to your questions. We never outsource this service, which means you’ll be talking to a Cayan employee who knows your account and understands your business.
That’s what I like to hear. US-based support is a plus, but in-house support is the best. The downside here is that you might be met with longer wait times.
I used their live chat support feature midday on a weekday, and the responses were a little slow. I tried again after hours on a Friday and service was VERY slow. In fact, after over 20 minutes of waiting I just gave up.
On the bright side, the responses I did get were much more professional and intelligent than I’ve received elsewhere. I’d say it’s worth a little bit of a wait for better responses, but of course I’d rather have the best of both worlds.
Negative Reviews and Complaints:
Cayan has an A+ rating at the BBB, with 168 complaints over the last three years. When we updated this a little over a year ago, they had 97 complaints filed, so the volume has increased in the past year (72 filed in the last 12 months alone). Additionally, 46 BBB users left detailed reviews, 45 of which are negative. This is, to be honest, a little high for my liking. If this trend continues, I’m going to have to reconsider my rating of Cayan.
One of the truly remarkable things about Cayan has been and continues to be their dedication toward making things right with customers who have complaints. You’ll find dozens of well-considered, kind, sincerely apologetic and understanding responses from Cayan representatives. They take responsibility for preventable errors, and seem to genuinely care about the reputation of the company and the customer’s experience. You can see evidence of this in our comments section, as well as on the BBB reviews and Ripoff Reports. Unfortunately, they offered no responses via Yelp, where Cayan has 25 predominately negative reviews.
Of the complaints I browsed, these came up most often:
- Withholding of funds: This can happen for a number of reasons. Chargebacks and/or suspicious charges can easily raise a red flag that will either get you suspended or shut down. Cayan uses First Data (FD) for their processing. If Cayan is boarding merchants using the First Data platform, it’s also possible that FD is underwriting those same accounts. If that’s the case, then FD has the authority to shut down an account without authorization from Cayan. The same goes for any acquiring banks that Cayan is associated with. They have the last word. With that said, a good ISO/MSP will have their own risk department that monitors their merchants’ accounts to catch any security issues before they get out of hand. Because once that red flag goes up with First Data, it’s shoot first, ask questions later. To learn what you can do to prevent this, check out this article.
- Undisclosed PCI compliance fee: After reading a ton of complaints about this, it’s clear to me that Cayan really needs to do a better job when it comes to disclosing this $99 fee. The fee itself is justifiable – failure to disclose it is not. I’d like to see this information on their site. I’d also like to see it split into monthly payments, so that if I signed up in April (when they assess the PCI fee) and decide to cancel in May, I’m not stuck paying for a whole year to offset their PCI costs. Based on many reviews I read, Cayan is not generally willing to prorate this charge.
- Difficulty cancelling: This complaint comes up a lot with Cayan, but I’m not sure why. Their cancellation process is actually a lot easier than many other providers. (Here’s a link to their page explaining the process.) Basically, you have to call Customer Service to submit a cancellation request, and then they will send you an email with a link for an online cancellation form. Having the process that includes a phone confirmation protects merchants from an unauthorized party cancelling the account. Having the digital step helps provide a record of the cancellation. I actually like this process quite a bit, much more than the standard “written request” that most providers ask for. My only concern is that some merchants report having trouble getting through to the cancellation department.
Positive Reviews and Testimonials:
There are plenty of testimonials on the Cayan website. Feel free to check them out. They aren’t dated, but I’m glad to see full names and business names attached to the reviews. You’ll also find some positive reviews in our comments section below.
Cayan (formerly Merchant Warehouse) offers some solid services, far exceeding the industry standard across the board. With fair payment terminal sales, quality products, good support, ethical sales practices, and no early termination fee – what’s not to like? Their new Genius “Customer Engagement Platform” is an interesting solution for merchants looking for new and alternative payment technologies and/or mobile marketing.
One of my favorite things about Cayan is seeing how company representative respond to public complaints. They seem to genuinely take note of Cayan’s shortcomings, and hopefully report the need for fixes to their managers. If they continue to take complaints and feedback to heart, Cayan could easily be a perfect five star processor in the near future. For now, 4 stars isn’t too shabby! They’ve earned my seal of approval.
Leave your comments below to share your experience!