Bank of America Merchant Services Review
Processing $5,000 per month or less in card payments?
- Date Established
- Charlotte, NC
- Next-day deposits available
- Chip card hardware available
- Check/eCheck acceptance
- $500 early termination fee
- Poor customer support
- Limited pricing disclosed online
- Expensive terminal leases
Bank of America is a big bank. And for consumers, it’s very well-known. That’s why I can understand why so many merchants go straight to Bank of America Merchant Services for payment processing services. It’s already there, it’s convenient, and if you trust them to handle your banking, then why shouldn’t you trust them to handle your credit card processing?
But here’s the thing: Banc of America Merchant Services, LLC (the legal name of this company), is altogether different from the Bank of America consumers know. They aren’t the same company at all. From what I’ve been able to tell in the course of my research, local banks act as referring partners who pass leads onto sales agents who are supposed to close the deal.
Also referred to as BAMS, or occasionally BofA in this review, this is no mom-and-pop shop or a scrappy underdog trying to survive among the big dogs. BAMS is an enormous merchant acquirer. It was ranked number four in the nation by quantity of purchase transactions in 2016, according to the Nilson Report. That puts it behind Vantiv, First Data, and Chase, but slightly ahead of Global Payments/Heartland Payment Systems.
BAMS is actually just a First Data reseller, meaning all of its offerings are just repackaged and repriced First Data products. Its merchant contract terms are hardly competitive and BofA doesn’t add anything that contributes value to its product suite.
What’s more problematic is that the company uses questionable sales tactics alongside poor advertising transparency, which has led to a growing pool of unsatisfied customers who didn’t understand what they signed up for. High early termination fees, bank-breaking lease agreements, and high rates and fees seem to come up consistently with BAMS. Throw in shoddy customer support, and you’re probably starting to wonder how such a poor company manages to be so large.
For many merchants, the next-day deposits for BofA business checking account holders remains a major draw. If you’re really sure you want to look into Bank of America for your credit card processing, read this review carefully and proceed with caution. Be prepared to navigate a few pitfalls.
All things considered, I can’t give Bank of America Merchant Services more than 3 stars. It’s a big company with powerful resources, but I’m just not convinced that it wields these resources to the benefit of merchants. There are many things it could improve on, from its transparency to the fundamental way the company operates. If we saw any sort of improvement in any regard, we could raise the rating, but not until then.
Check out the full Bank of America Merchant Services review below for more information, or take a look at our comparison chart to see the best merchant services providers.
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Table of Contents
Products & Services
Bank of America Merchant Services is pretty much a First Data reseller. That means all of its products are just First Data offerings at BAMS prices. On the one hand, it means BAMS is capable of serving merchants in all kinds of industries, rather than having a limited scope.
On the other, it means that BAMS products are pretty generic and the company doesn’t offer much unique value. So why not go to First Data directly? Or any other processor that offers better value and service, for that matter?
Here’s what you’ll get with a Bank of America merchant account:
- Tablet-based POS: If you don’t have a POS or you’re looking to upgrade, Bank of America offers the Clover suite of POS systems. There are several different devices available based on your needs, and the hardware kit includes support for magstripe, EMV, and NFC transactions. Plus, Clover supports a large app market for all kinds of integrations.
- Terminals: If you do have a POS and aren’t inclined to change over, you can also just get an EMV/NFC enabled credit card terminal. BAMS offers a handful of models to choose from. It’s nice to see there’s a consumer-facing PIN pad option, too.
- Check Acceptance: Bank of America Merchant Services offers check acceptance through Clover for small merchants. It also offers Tele-Check acceptance for large businesses, but it doesn’t clarify what the difference is or what the threshold is for being classified as a large business.
- Mobile Payments: Clover Go, an offshoot of the Clover Station POS, is BofA’s solution for mobile merchants. The rates are different from the regular Clover fees, at 2.7%per swipe or 3.5% + $0.15 per keyed transaction. BAMS sells its two readers, a headphone jack model with magstripe and EMV support and an all-in-one Bluetooth model with EMV, NFC and magstripe support, for $34.99 and $59.99, respectively. You can get Clover Go as a standalone if that’s all you need, but I’d be wary.
- Payment Gateway: Bank of America offers its own payment gateway for online merchants, but it’ll still charge you a large setup fee and a per-transaction fee on top of processing rates.
- eCommerce Support: If you haven’t the foggiest idea how to go about building a website, or if you really hate the one you have now, BAMS has a partnership with Yahoo Small Business to get you set up.
- Dynamic Currency Conversion: If you frequently deal with customers from another country, BAMS offers dynamic currency conversion so you can charge customers in their card’s currency and they’ll know right then what they’ll pay.
- Global ePricing: BAMS calls this Global ePricing, but other companies generally refer to it as multi-currency displays. If you sell online to a global audience, you can display prices in different currencies based on the location of the shopper.
- Real-Time Reporting and Analytics: BAMS promises detailed reporting and analytics. But if you look close, you’ll see this will cost you an undisclosed monthly fee. Considering how many of the best merchant account providers and third-party processors like Square offer free and detailed analytics as part of the package, I’m not impressed by this.
- Gift Card Services: Nothing new here, but it’s always good to see.
- Loyalty Program: Bank of America’s loyalty program seems to be centered around stored value/gift cards, but there’s not a whole lot of information about it.
- TransArmor Data Protection: TransArmor is a data breach protection service that provides tokenization and encryption. It’s included for free with Clover products. If you’re bringing your own POS to the party, expect BAMS to charge you a monthly fee for this service. This is NOT the same as a PCI compliance fee.
- Next-Day Deposits: If you have a Bank of America business checking account, your funds are released to you the next business day. Having a BAMS account also means the bank will waive your $30 monthly fee. If you don’t have a BofA checking account, your deposits will take longer. BAMS doesn’t clarify, but I would expect 2-3 business days.
That’s really about it for Bank of America’s services. For the most part, I feel like this will address most everything a merchant needs, which is nice. But it doesn’t excite me. Maybe it’s because nothing stands out as ground-breaking or even better-than-average. Most services are just re-packaged deals from another provider, and they’re going to cost you more.
Fees & Rates
BAMS does not publicly disclose much information on rates or fees. There are no terms of service on the site, either, so we can’t look at a sample contract and point out the red flags.
This is usually the case with large processors. They base their pricing on a whole mess of factors — your industry, your monthly or annual volume, what kind of hardware you need, etc. And so they don’t like to give pricing information because they don’t want to deal with “but your website said…” complaints. However, plenty of other businesses will clearly disclose their markup so you know exactly what you’ll pay when you sign up. So you shouldn’t accept lack of pricing disclosure as perfectly normal.
BofA’s live chat feature also isn’t helpful if you introduce yourself as a reviewer and just want some general information. Last time I did that I was immediately shut down and couldn’t get any information, not even whether the company offers interchange-plus or how long the contract is for. The most helpful information that I got was that each package is customized to the individual business. That’s processor code for “we assign lots of arbitrary fees.”
I got a bit sneaky this time around when I reached out to Bank of America and was able to get some numbers. If you’re a low volume merchant, here’s what you can expect:
Online Transaction Rates
- Gateway Setup Fee: $99 (one time)
- Gateway Service Fee: $16/month
- Gateway Per-transaction fee: $0.10
- BAMS Transaction Rate: Interchange plus 0.99% + $0.20
- PCI Compliance Fee: $9.95/month
Clover Go Rates
- Swiped/Dipped/Tapped Transactions: 2.7%
- Keyed Entry Transactions: 3.5% + $0.15
- EMV-Enabled Headphone Jack Reader: $34.99
- All-In-One Bluetooth Card Reader: $59.99
- No Monthly Fee
When I asked about contracts, the sales rep told me that there was a 3-year contract, but with no ETF. In my very careful exploration of the BofA merchant site, I noticed one fine-print reference to “Clover Go On Demand” that suggests that maybe low-volume mobile merchants don’t have an annual contract. Zero other information is available. However, if you use anything other than Clover Go, you should expect a three-year contract with an early termination fee. Even if all you are using is Clover Go, you should still be wary of a potential ETF.
If you’re using the Clover Station (including the Mini, Mobile, or Flex variants), you’re not going to have the same pricing as Clover Go. The fact that BAMS uses interchange-plus rates for its online payments gives me hope that BAMS might have switched from its previous qualified pricing plan finally. But I don’t have confirmation of this.
Aside from transaction rates and fees, you can expect these additional costs:
- Clover Station: $1,264 to buy outright or $68.83/month to lease. This includes:
- Clover Station
- FD40 PIN pad
- Receipt Printer
- Cash Drawer
- Printer Paper
- Barcode Scanner: $149 to buy outright or $7.93/month to lease (36 months)
- Kitchen Printer: $396 to buy outright or $18.93/month to lease (36 months)
- Clover POS Monthly Service Fee: $49/month
- Additional Registers Service Fee: $25/month per register
All of these costs start to add up quickly. Clover is definitely competitive in the POS space, but I don’t think anyone except a Clover representative would tell you it’s the best pricing available.
But even here, there’s more fine print: This is the web-only price, meaning if you sign up online, this is how much you’ll pay. If you contact the company over the phone to get set up (especially if you’re also using some other part of BAMS’ offerings), you’ll pay an undisclosed price. I have no information about whether that’s lower or higher.
BAMS doesn’t disclose the lease term for the Clover POS, but merchant complaints say that it’s four years. This is not good. It also means you end up paying a LOT more for a piece of hardware you don’t even own in the end:
- 68.83 x 48 = 3,303.84
Compare that to $1,264 to buy outright and not be trapped in a lease.
Finally, one of the big draws of Bank of America is that BAMS promises next-day deposits for merchants who also have a business checking account with them. If you don’t have a BofA business checking account, your deposits will take longer (2-3 business days being most likely).
If you are with BofA, your business checking account costs about $30/month to maintain — unless you’re also using merchant services and/or payroll as well. In which case, the company is happy to waive that fee. It claims that this saves you money. In fact, BAMS goes so far as to claim this is a great way to reduce your processing fees:
But do you want to know how else you can save money? Get a business account with another bank or a credit union that has low or nonexistent monthly fees. Choose a processor who will give you next-day deposits regardless of which bank you use.
Contract Length & Early Termination Fee
When I talked to a Bank of America rep using the live chat feature, he told me that there was a three-year contract in place, which fits with everything we’ve heard from merchants. He also said there was no early termination fee, which definitely does NOT fit with everything we’ve heard from merchants. We have multiple reports of merchants being assessed a $500 ETF, which is $200 MORE than the typical ETF (most processors I’ve seen charge about $300). That’s ridiculously expensive for a company that already charges a boatload of fees.
The most ethical of merchant account providers operate on a month-to-month basis without contracts, so you certainly shouldn’t feel like an ETF is unavoidable. If you don’t want to be locked into a contract, I recommend checking out our top-rated processors.
I also want to point out that Bank of America uses an equipment leasing program. It’s not even an in-house leasing program. If you want to lease Clover hardware, you’ll be dealing with First Data. While the company is a large and overall solid processor, it has an absolutely godawful leasing program that you should avoid at all costs. Your contract for the lease will be separate from your processing contract — and it will be a four-year, non-cancellable lease, compared to the three-year processing agreement. I’ll come back to this in the next section, but for right now the takeaway is this: Do NOT, under any circumstances, lease your equipment from BAMS/First Data if you can help it. Buy it outright. Buying outright will cost more up front, but it’ll be a much better deal. If you need to, consider a small business loan to buy the equipment instead. Since the lease is non-cancellable anyway, if you don’t like the system, at least you’ll have paid less for a loan.
Sales & Advertising Transparency
BAMS exhibits almost every transparency issue I’ve come to expect from less-than-stellar processors. For starters, BAMS only offers pricing information for its entry-level Clover Go plan. There’s no other pricing information on the website, not even for the cost of any hardware. Any processor that does this will tell you it’s because pricing is contingent on your industry, your average transaction size, your monthly/annual volume and other factors. And that’s true — that’s how they set rates. But that’s not true across the board. Other companies have no trouble disclosing their markup and fees because they charge consistent, transparent rates.
Second, I am utterly unimpressed by the BAMS website. It is clunky, poorly designed, and lacking information in obvious places. The design feels like three sites within one, and as a result is very difficult to navigate. (There’s even a separate mini-site on the main Bank of America site under its small business services, which is completely different!) Do you want to know more about actual processing options? Then you’ll have to scroll on down to the website footer to get a link that will take you somewhere with a modicum of helpful information. But it’s still mostly generic. You can get a feel for what’s available for you, but that’s about it.
My impression is that Bank of America doesn’t want you to rely on the website. It wants to get you into a live chat or on the phone or submitting information via email so that its sales reps can work their “magic.”
Third, the “resources” offered on the site are inadequate at best. For example, let’s just take a look at BAMS’ explanation of processing fees:
This to me is laughable because it neglects to explain monthly service fees, account statement fees, PCI compliance fees, annual fees or any number of other costs processors tend to sneak into their plans. It sort of tries to simplify everything to the point that you think “all processors charge the same fees” and that’s not true at all.
And that’s not getting into all the disclaimers and fine print on the site. Each page is filled with its own footnotes and little catches. For example, BofA promises insights and analytics but only mentions in the fine print that this service costs an extra monthly fee (but it doesn’t mention what that monthly fee is).
Similarly, BAMS lists the monthly lease price for its Clover hardware, but neglects to mention that it’s a four-year, non-cancellable lease. This annoys me a great deal because A) the lease is a four-year term while the processing contract is for three years, and B) you end up paying not quite three times the value of the equipment over the duration of the lease. (Three times the value would be $3,600 for those of you who are really bad at numbers). And then you don’t even own the equipment! This is just an awful practice. Lots of merchants cancel with BAMS and then are told they still owe hundreds of dollars on equipment they’ve already returned.
There are no active social media channels dedicated to Merchant Services — just a LinkedIn page that seems to have no real purpose. There’s a BofA Twitter feed and Facebook page, as well as dedicated news and help Twitter channels. However, remember that Merchant Services is a different company. You’re better off trying to go through the official support channel (a phone line) than getting help on social media.
For a company that claims to tailor itself to small business, I find this extremely disappointing. Things work differently in an enterprise environment, where doing business usually involves sales calls, presentations, reps visiting on site, meetings to discuss the decision, etc. Small businesses just don’t operate like that and so to see such a disappointing site and nonexistent social media (and minimal educational content) leaves me disheartened. A company as large as Bank of America can certainly do better — it just has to want to. And sadly, I don’t think it does.
Many reviewers complain about non-disclosure of important contract terms, misleading fee/rate explanation, and overall poor sales transparency during consultations. Although it looks like most, if not all of the BAMS sales reps are company employees and not independent agents, this doesn’t guarantee a good sales experience.
In fact, one thing I often do when reviewing a company is check out an employee review site to see what people say. Sales agents are particularly great about leaving reviews, so this gives me some helpful information (like whether the agents get a base pay plus bonuses or work solely on commission). In BofA’s case, I saw references to having to “compromise integrity” and “morally bankrupt” team members. The overall feedback isn’t positive. High-pressure environments are one thing. I see that a lot. But to have sales agents outright admit to using shady practices is another. Combined with what seems like a lot of turnover, constantly changing priorities, and a lack of regard for customer service, the inconsistent and poor experiences that merchants report starts to make sense.
When dealing with Bank of America, I urge you to proceed cautiously and don’t sign anything until you’ve read it carefully. Be very thorough in asking questions and make sure that what you’ve been told lines up with what your contract says. If you need help understanding your contract, reach out to us.
Customer Service & Technical Support
I’m left feeling underwhelmed concerning the customer and technical support offered at BAMS, both regarding what they advertise and how current merchants seem to rate it.
At BofA, you’ll find:
- Phone Support: Offered 24/7 at (800) 228-5882. This seems to be the sole means of support from actual BAMS agents. On the one hand, being able to talk to a live person is great. On the other, some people (myself included) loathe getting on the phone if we can get an answer another way (email or live chat).
- Small FAQ: This self-help section looks fairly useless, and I am quite disappointed by it. Then again, if BofA signs most merchants up with Clover, the Clover FAQs (which you can find on the Clover site) will address most of the software and hardware problems.
If you’re not signed up with Bank of America yet, you can also access a separate phone line, live chat, or an email inquiry form. The live chat feature is okay — I didn’t wind up having to wait for ages for someone to join the chat and I didn’t get much of a runaround when I asked for pricing without giving them all of my business information. But they definitely want to get your information passed off to a sales rep who can talk you into signing.
If you have experience using the BAMS customer service options, please leave your thoughts in our comments section. Thank you!
Negative Reviews & Complaints
Since Bank of America doesn’t have a separate BBB profile for its merchant services wing, we don’t have that resource to draw from in this case. There are nine reports on RipOffReport.com, the most recent of which is from October 2016.
Elsewhere, though, the web is populated with complaints against BAMS. It was fairly simple to pinpoint major problems, given how numerous and explicit they are. Here are the common issues:
- Expensive Terminal Lease Contracts: Some merchants have complained about not being aware that they were signing a non-cancellable terminal lease. The whole “not being aware” part can be chalked up to some merchants not fully understanding how leasing works, but I think more likely it’s sales reps being dodgy about explaining the terms. Terminal leasing is unnecessary to begin with. And First Data’s insistence on leasing is a huge mark against the whole Clover system, as well as the inconsistency in pricing from one reseller to the next.
- Withholding Funds/Termination Of Accounts: 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. Both First Data and Bank of America have been known to be a bit trigger-happy when it comes to holding funds, and sadly merchants are having trouble getting funding from legitimate transactions. You’re going to want to learn how to avoid holds and minimize chargebacks if you plan on signing up with BofA.
- High Cancellation Fee: If you want to cancel before your contract is up (three years), then Bank of America will likely charge you a $500 cancellation fee. That’s pretty steep considering there are plenty of other providers that don’t charge a fee at all and the industry standard is usually about $300.
- High And/Or Hidden Fees: You’ll see first that Bank of America isn’t great at disclosing fees, but also that they are quite high. In addition to setup, monthly, and PCI compliance fees (not to mention the ETF) you could also be hit with annual fees. Merchant complaints aren’t clear what other kinds of fees they encounter, just that they sometimes can amount to almost 10% of a single transaction. Related to this, you’ll see general complaints that Bank of America is expensive — and that may be as a result of high processing rates and all the assorted other fees BofA charges.
- Poor Customer Service: While even a big company can give you a nice, personal experience via friendly and dedicated account reps, this doesn’t seem to be the case with Bank of America. Sure, they have 24/7 support, but that doesn’t mean it’s good quality. Complaints specifically focus on long hold times, being shuffled around from department to department without a solution, and outright rude and even condescending support reps.
Positive Reviews & Testimonials
The most you’ll see for testimonials on Bank of America’s merchant services home page is a small and somewhat questionable bar near the bottom of the page.
I’m a little bit wary of the “Somewhere, USA” and the fact that one business appears twice.
There’s not a lot of happy news in this category, which isn’t a surprise given the complaints. But it’s worth noting (again) that BofA is large enough that it ranked as the fourth largest acquirer in the US by number of purchase transactions in 2016. BAMS processed 15.28 billion transactions.
I’m inclined to think a lot of happy customers (at least, for the small business side of things) are just people who already banked with BofA and don’t realize just how much they’re overpaying. Large corporate clients are a different matter entirely.
And I will say this: A lot of merchants seem to like the Clover platform itself. The software is pretty solid, and the hardware isn’t bad either. It’s just the pricing and the leasing terms that are so problematic.
But you can get everything Bank of America offers from another, more reputable processor.
Bank of America Merchant Services isn’t doing anything really special for the average merchant. I’d bet a large portion of its clientele signed up mostly due to name recognition and being pitched to at a local BofA branch where they already bank. But those really shouldn’t be the reasons you choose a credit card processor.
Nothing that Bank of America offers is anything you can’t get elsewhere. Plenty of merchant service providers offer (free) next-day deposits regardless of who you bank (Fattmerchant comes to mind), and that’s the biggest standout feature. And as I hope I’ve conveyed to you here, Bank of America doesn’t offer competitive pricing for its services or its hardware. In fact, its outsourced terminal lease program (through First Data) is hugely problematic.
A company as large as Bank of America Merchant Services can and should do better than just repackaging another processor’s goods for high prices and poor customer support.
For these reasons, I’m leaving the Bank of America Merchant Services review at 3 stars. I’m not saying run for the hills — but please, seriously consider other options before jumping on board with BAMS. You can find a much better deal for better pricing and get much better support without sacrificing next-day deposits. And if you’re paying $30/month for business checking, then maybe you should look at another bank or credit union (even though I’m not actually reviewing BofA’s checking services).
If BAMS showed any sort of commitment to improvement in any regard, I’d happily raise the rating. Until we see better customer service, or less awful leasing terms, or even just an improvement in transparency on the website, Bank of America Merchant Services will stay right where it is in my books.
If you have experience with or insight into BofA Merchant Services, leave your thoughts in a comment! Thanks for reading and good luck.
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