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Merchant Account Reviews

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  • MerchantPlus.com Review

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    Overview: Let me begin this review with my favorite aspect of MerchantPlus – common sense. This provider features more common sense practices and common sense marketing than you’ll find in most other nooks of the merchant services market, and I love that about them. Rates and fees are incredibly simple, with flat rate and interchange-plus […]

  • Cayan (Merchant Warehouse) Review

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    Highlights: Interchange-plus pricing offered Very good customer service and support Multiple products and services offered Month-to-month contracts with no early termination fees No account setup or application fees Call them at (866) 433-8790 Overview: Cayan first went into business as Merchant Warehouse back in 1998, re-branding themselves as Cayan in early 2015. The company is […]

  • Total Merchant Services Review

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    Overview: Total Merchant Services (TMS) is a merchant account provider headquartered in Woodland Hills, California. Founded in 1996, TMS is one of the more-established companies in the processing business. They’re also one of the larger companies in the industry, serving about 100,000 merchants. Bigger isn’t always better, however. TMS continues to suffer from an over-reliance […]

  • Encore Payment Systems Review

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    Encore Payment Systems appears to be out of business. This review is archived and will no longer be updated. Check out our other reviews to find the best credit card processing company for your business.  Overview: Well, they can’t all be winners… Founded in 2004, Encore Payment Systems (EPS) is a merchant services provider based […]

  • Gravity Payments Review

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    Overview: Gravity Payments made a splash in national news in 2015 when the company announced that they would raise the “minimum wage” in the company to $70K per year, well above the industry average for entry-level positions. But what does all the buzz mean for business owners? Does all that revenue sharing come from the […]

  • USPAY Group (Formerly Premier Merchant Processing) Review

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    Overview: Headquartered in Levittown, New York, USPAY Group is a small merchant account provider that specializes in serving the health care industry. The company was originally founded in 2005 as Premier Merchant Processing, but changed its name to USPAY Group several years ago. While we’ve seen providers change their names in an attempt to dodge […]

  • Merchant Focus Review

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    Overview: The thing that drew me to Merchant Focus originally was their strong relationship with Authorize.Net, the most popular payment gateway provider in the US. If Authorize.Net trusts these guys enough to send a whole bunch of business their way, that’s saying something. And there’s no doubt about it, Merchant Focus is an above average […]

  • Sam’s Club Merchant Services Review

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    Overview: Sam’s Club has provided members with wholesale goods since 1983, similar to its competitor Costco. In the early 2000s, the company began to provide merchant account services to members, also like Costco’s own processing division. And, again like Costco, Sam’s Club resells the services of another credit card processor, which in this case is […]

  • CardConnect Review

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    Overview: Is CardConnect a merchant account provider or a payment gateway provider? You might be a little confused if you look at their website, which places a heavy emphasis on their CardConnect Payment Gateway and CardPointe Virtual Terminal services, but doesn’t say much about merchant accounts. The truth is that they’re – by necessity – […]

  • YapStone Review

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    Pros Ideal for property management industry Good marketplace tools Good website & advertising Predictable flat-rate pricing Cons Not good for traditional retail and restaurants Poor customer support Overview My husband likes to tell the story of the sunken stones from the island of Yap. He heard a piece on Planet Money about the ancient Yapese people […]

What is a Merchant Account?

If you want to accept card payments from your customers – and virtually every business needs to these days to remain competitive – you need access to a merchant account. “Merchant” is another word for a seller or business owner. You can think of a merchant account as a bank account that extends you, the merchant, a line of credit. This allows a merchant to receive funding for the credit transaction based on the trust that they will perform the services or deliver the goods properly, and thus the customer will not refuse to pay for the transaction based on the inadequacy of the merchant.

The point of a merchant account is to facilitate the complex interactions that need to occur between you, your customer, the credit card networks, and your payment processor every time you receive a card payment. It helps to ensure that you receive funding as quickly as possible, that the banks are protected from losses, and that buyers are protected from ripoffs and scams. With a merchant account, everyone is held accountable based on the rules of the credit card processing agreement.

You will, of course, have to pay a number of fees in order to take advantage of the credit card processing networks and banks. But it’s much easier and more secure to open a merchant account than it is to keep a book of credit accounts for all of your customers!

How to Avoid Merchant Account Scams and Ripoffs

Be skeptical of sales gimmicks – If it sounds too good to be true, it probably is. A lot of processors make claims about having the lowest rates in the industry, but how can they all have the lowest? Answer: they can’t. They will match the rate quote provided by another processor, but the contract could still include hidden fees to make up for it. When a processor claims that it will pay you $1000 if it can’t beat a competitor’s quote, rest assured it has no intention of paying up. There’s always a loophole.

Request interchange-plus pricing – The only way to make real, meaningful comparisons between rate quotes is to get an interchange-plus rate. This type of quote will tell you the markup that you are paying on top of the wholesale (or “interchange”) cost of the transactions. Since the wholesale cost will vary from transaction to transaction, this is the only way to get a clear picture of the profit margin for the processing company. Fixed rate tiered quotes that do not separate wholesale from markup reduce transparency and make it impossible to compare the rates effectively from one company to the next.

Avoid early termination fees – The most common merchant account fee that we see complaints about is the early termination fee (ETF). These fees can range from hundreds to thousands of dollars, and are often not disclosed or poorly disclosed during the sales and contract signing process. Don’t take your salesperson’s word for it, either. Verbal promises during the sale process are not legally binding. If it’s not in writing, it’s worthless. You need to review your contract carefully and make sure an early termination fee waiver is included if the contract mentions an early termination fee.

Don’t give in to pressure – Some merchant account sales agents will try to put pressure on you to make a quick decision, saying that an offer is only good for a certain amount of time. Never let these high-pressure sales tactics sway you. You, the business owner, have all the power. Don’t make any hasty decisions. Sales agents may also try to make you feel like you owe them something just because they have spent time on you. You don’t owe the sales agent anything! Don’t let them guilt you into making a decision that could negatively impact your business for years to come just so they can close a sale.

What Is a Payment Gateway?

A payment gateway provides the connection between an online payment and the bank that processes any given credit card transaction. Whether used for eCommerce or a mobile payment application, the payment gateway works behind the scenes to securely transfer sensitive credit card information. It’s important to recognize that a gateway is not the same thing as merchant account, and each comes with its own separate fees.

Most eCommerce businesses will need a payment gateway, but some in-person businesses might need one too. Point of sale (POS) software will sometimes require a payment gateway to operate. If you just need a virtual terminal to key-in card information at your computer, however, you might not need a dedicated gateway at all. Many payment processors include a virtual terminal for free as part of their basic service packages.

To use a payment gateway, you will have to “integrate” it with your website or software. This can be as easy as typing in a numerical key. It can also be difficult enough that you will have to hire a web developer to help out. It all depends on your gateway, your software, and your needs. Your gateway provider’s website should include detailed instructions regarding integration.

When picking a payment gateway, it’s important to make sure that it’s compatible with your POS, your shopping cart, or your payment processor. Not all gateways work with all systems. Be sure to talk to customer service before you commit to any solution to avoid fees and penalties for cancelling.