Merchant Account Reviews

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  • TSYS Merchant Solutions Review

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    Overview: Total System Services, Inc. (TSYS) is a credit card processor with local and regional offices throughout the United States and the main headquarters in Columbus, Georgia. Although the company’s roots go back to 1959, it’s been an independent business entity since 1983. Not only is it one of the oldest processors in the industry, […]

  • 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 […]

  • First National Merchant Solutions Review

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    Overview: First National Merchant Solutions (FNMS) was bought out by TSYS back in 2010, so moving forward, FNMS doesn’t necessarily need its own full review. Instead you can just take a look at the TSYS review since that’s the company that you’ll be dealing with from here on out. I gave FNMS the same rating […]

  • Fifth Third Processing Solutions Review

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      Overview: Fifth Third Processing Solutions (now known as Vantiv) is a very large processor based out of Ohio. It was formed in 1970 as Midwest Payment Systems, Fifth Third then changed its name to Vantiv in 2011. Fifth Third has a banking wing in addition to its credit card processing services, much like the […]

  • Vantiv Payments Review

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    Overview: Vantiv (formerly known as Fifth Third Processing Solutions) is a large credit card processor located in Ohio. Well, large doesn’t quite cover it. Huge, perhaps? The company is the second-biggest merchant acquirer in the US, and the biggest PIN debit acquirer (based on the number of transactions) as well. Vantiv has been in operation since […]

  • TermNet Merchant Services Review

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    Overview: TermNet Merchant Services was a credit card processor that was bought out by TSYS Merchant Solutions in 2011. TermNet was re-branded and fully integrated into TSYS, so they’re pretty much the same company now. It wouldn’t make much sense to have a full review of TermNet since they no long operate under that brand […]

  • PayPal Review

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    Overview: The regular shopper thinks of PayPal as just a convenient and ubiquitous digital wallet, but business owners must consider its merits as a merchant services and payment solutions provider. We’ll touch on the consumer experience a little bit in this review, but mostly we want to help business owners evaluate PayPal’s credit card processing […]

  • Stripe Payments Review

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    Overview: There’s a kind of special allure to companies like Stripe. They’re media darlings, led by entrepreneurs who want to change the way we do business and have impressive client lists to show off. Stripe, in particular, has been extremely popular, securing round after round of VC funding and the backing of investors like Elon Musk and […]

  • Transparent Merchant Services Review

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    Overview: “Transparency is the Best Policy” is a motto I might have framed in my office if I was the motto-framing type. For many merchant services providers, decreased transparency allows for increased profit. So for obvious reasons not all sales agents are likely to live by this Golden Rule. Now, enter Transparent Merchant Services – […]

  • Forte Payment Systems Review

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    Overview: You may have heard the term “omnichannel payments” thrown around lately, and maybe you’re wondering if it’s a solution you need or just a marketing buzzword to get you to sign up for more services. Well – I guess it’s a little of both, and Forte Payments is a prime example of omnichannel payment […]

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.