Merchant Account Reviews

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  • Crescent Processing Company Review

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    Crescent Processing Company 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: Since we last paid Crescent Processing Company (CPC) a visit, things are not looking good. They have an enormous number of complaints and […]

  • Meridian Merchant Services Review

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      Overview:   From what I can tell, Meridian Merchant Services (MMS) is a pretty small ISO/MSP. I tried to check their website traffic data on Compete.com to no avail. When Compete doesn’t have any traffic data on a site, it’s usually because that site isn’t getting much traffic. 🙂 Regardless, I actually like these […]

  • E-OnlineData Review

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      Overview:   e-OnlineData is a subsidiary of PowerPay, LLC and is based out of Portland, Maine. They cater to the e-Commerce merchant, but also handle retail accounts as well. Most of the good stuff about e-OnlineData will be found in the subsections below, but here’s a quick run through. They have a nice blog, a […]

  • PowerPay Review

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    Overview: JANUARY 6, 2016 UPDATE: PowerPay has been acquired by EVO Payments International, and the PowerPay brand has been retired. Be sure to read our review of EVO Payments International here. Our original review of PowerPay is below: PowerPay has been in business since 2003. They have over 50,000 merchants that they process for, yet […]

  • Durango Merchant Services Review

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    Overview: Usually, when I see a provider advertising a specialization in “high-risk” accounts, it sends up a red flag for me. Many such providers cling to the shady underbelly of the merchant market, alongside their clients who often traffic in pyramid schemes, snake oil, rigged gambling and prostitution, among other unsavory and unfair business endeavors […]

  • ABC Global Systems Review

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      Overview:   According to their “About Us” page, ABC Global Systems (ABC) has been doing business since 1990, so they obviously have plenty of experience in the space. I couldn’t find any reason why you shouldn’t work with them, but they are missing quite a few things that could drastically help their rating. For […]

  • Card Payment Solutions (IN) Review

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      Overview:   When doing my research on Card Payment Solutions (CPS), I found some conflicting information. On the one hand, it looked like CPS is a great company, but once I started doing a search for complaints, I found quite a few (see below). But, as I kept digging, I noticed something that I […]

  • E-Commerce Exchange Review

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      Overview:   This review is definitely one of my longer ones, but if you’ve considered working with these guys, I urge you to read through the whole thing. I promise you it will be time well spent. According to their site, E-Commerce Exchange (ECX) has been around since 1989. They’re a well established company […]

  • American Verification Processing Solutions (AVPS) Review

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      Overview:   From what I’ve heard, American Verification Processing Solutions (AVPS) usually deals more with the high-risk and bad credit type merchant accounts. They’ve been around since 2000, so that’s about a decade’s worth of service. For how long they’ve been around, they only have a small number of complaints, but still worth noting. […]

  • Keystone Payments Review

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      Overview:   Keystone Payments has been around since 2005. They scored pretty low in my book, just because they miss the mark on quite a few of my review criteria. It seems like they’re pretty old school in the way they do business, but that’s interesting because they’ve only been around since 2005. What […]

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.

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