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Merchant Account Reviews

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  • iPayment Inc. Review

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    Overview: iPayment has been in the game since 1999, and currently have almost 200,000 companies in their network, making them a fairly large processor. They also have thousands of independent sales offices and agents that resell their services on a day-to-day basis, not to mention the companies that they’ve bought-out over the past few years. […]

  • Prodigy Payment Systems Review

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    Overview: If you read my review of Encore Payment Systems, you can skip this and just head straight to our comparison chart. There’s no new information here. Prodigy Payment Systems (PPS), Momentum Payment Systems (MPS), and Encore Payment Systems (EPS) are all different names for the exact same service. The only difference is the logo. […]

  • Payment Alliance International Review

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    Overview: Established in 2005, Payment Alliance International is a popular merchant account provider based in Louisville, KY. Other PAI locations include a sales office in Florida, a hardware and shipping center in Mississippi and an ATM center in Montana. ATMs, in fact, are PAI’s bread and butter. In addition to running card processing for these machines, PAI […]

  • Merchant One Review

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    Overview: Started in 2002, Merchant One is based out of Miami Beach, Florida from where it serves over 100,000 customers. Merchant One has been a bit of a rollercoaster since we first reviewed them back in July of 09′; they only had about a handful of negative reviews on the most popular complaint sites and were sitting […]

  • Vanco Payment Solutions Review

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    Overview: Vanco Payment Solutions is a merchant account provider with main headquarters in Atlanta, Georgia and a second office in Minneapolis, Minnesota. The company is the result of a merger between Vanco Services, which was established in 1998 in Minneapolis, and Veracity Payment Solutions, which started up in 2007 in Atlanta. Veracity acquired Vanco in […]

  • First Data Review

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    Overview: First Data (FD) is the 800 lb. gorilla of the credit card processing industry. They were established in 1969, and according to their stats, they serve over six million merchant locations worldwide. That is a HUGE merchant base, about six times bigger than the already-enormous Chase Paymentech. First Data has many offices across the […]

  • Unibul Merchant Services Review

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      Overview: You can tell that Unibul Merchant Services is part of the new-age group of ISO/MSPs. They have a Facebook page, a Twitter account and a few blogs that they update regularly. They also have quite a few educational resources for you to sift through. Unibul might be a little new to the game, […]

  • Summit Merchant Solutions Review

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      Overview:   Summit Merchant Solutions (SMS) is a subsidiary of First American Payment Systems (FAPS), and is part of a three company conglomerate including TransTech Merchant Group and Certified Payment Processing. They have been in business since 2005 (according to the BBB) and are based in Carrolton, Texas. SMS and its sister companies have […]

  • TransTech Merchant Group Review

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      Overview:   TransTech Merchant Group (TMG) has been in business since 2005 (according to the BBB). TMG is a subsidiary of First American Payment Systems (FAPS), and is part of a three company conglomerate including Certified Payment Processing and Summit Merchant Solutions. For a company that hasn’t been around for very long, they’ve managed […]

  • Eliot Management Group Review

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    Overview: Eliot Management Group (EMG) is a mid-sized credit card processor and merchant account provider headquartered in Fort Worth, Texas, and has been in business since 1999. EMG has numerous satellite offices throughout the country, primarily concentrated in the southeastern and Midwestern U.S. The company is also one of a bewildering number of subsidiaries of […]

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.