Bank of America Merchant Services Review
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- 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
Full Disclosure: I bank with Bank of America. I have a checking and savings account plus two credit cards with them. Sometimes I feel a little guilty for not working with my local bank instead – but B of A just makes everything so easy and streamlined. I can see all of my accounts on one page, quickly move money around, bank via mobile with ease, and generally get the level of customer service I need in person or over the phone at all times, with locations nationwide. Did I mention it’s cheap? (It is.)
With all of that said, I can understand why so many merchants go straight to Bank of America Merchant Services (BAMS) for payment processing services. Heck, I’d probably have done the same thing at one point. B of A is, after all, a big bank and a generally reliable business partner banking-wise. But before you sign a merchant agreement with the company, you should consider that they actually use First Data for processing, that the B of A merchant contract terms are not always very competitive, and that Banc of America Merchant Services, LLC, is altogether different from Bank of America in many ways.
Also known as BA Merchant Services (or BAMS in this review), this is no mom-and-pop shop. BAMS is an enormous merchant acquirer. For a point of reference, the company processed about $350 billion in credit card payments for 2012 alone (I’m a bit irritated that I can’t find any more recent numbers). That’s a lot of money. Partnered with First Data, another processing behemoth, BA Merchant Services has the tools and resources to get the job done for small and large businesses alike, without question.
Unfortunately, I don’t love the way this company does business. BAMS uses questionable sales tactics alongside less-than-stellar 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/fees seem to come up again and again with BAMS.
For many merchants, the next-day deposits for B of A business account holders remains a major draw. If you really want this, I get that. Just be sure to read this review carefully and proceed with caution. If you negotiate right, you can absolutely get a good agreement with B of A. You’ll definitely have to advocate for yourself, though. If you need help with this, drop us a line.
For the moment I’m leaving Bank of America Merchant Services at 3.5 stars. It’s a big company with powerful resources, I’m just not convinced that it always wields these resources to the benefit of merchants. There are many things it could improve on, from its transparency to the way its basic marketing practices are seriously out of date for 2016 and for a company with such great resources.
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 banks with the best merchant services.
Table of Contents
Products & Services
Since Bank of America Merchant Services uses First Data for payment processing, its products and services largely mirror the offerings of First Data. Basically, BAMS can set you up with whatever you need, both hardware-wise and software-wise. This can be nice if you’re looking for an all-in-one solution. The following represents just some of the products and services BAMS offers:
- Merchant accounts: This includes processing for credit, debit, and e-checks, as well as regular checks if you get the necessary scanning equipment. Accounts go through First Data. These services are bundled as part of a suite called Paymentum. I like the clever name, but this isn’t anything innovative.
- Tablet-based POS: Branded as the Clover Station, this includes both hardware and software. It actually looks like a nice system but is kind of pricey ($1,000+ to buy the system (or $50 per month to lease), plus $50 per month services fees. This doesn’t include kitchen printer and other add-ons. Still, it’s worth considering. The Clover Mini is another interesting option in this family of products. Clover is a product owned not by B of A, but by First Data.
- Terminal leases: We’ve said this many, many times on Merchant Maverick, but please, don’t lease. And especially don’t lease through First Data. Read our article to learn why buying almost always makes more sense.
- Mobile payments: The former B of A Mobile Pay app has been replaced with Clover Go, an offshoot of the Clover Station POS. The rates are different from the regular Clover fees, at 2.7%per swipe or 3.5% + $0.15 per keyed transaction. However, it’s worth noting that it appears individual resellers can offer their own rates, as First Data’s own site quotes pricing at 2.69% + $0.05 for swiped transactions, and 3.69% + $0.05 for keyed. The EMV reader appears to retail for $30, which is a fair price but does not include NFC. To be honest, I like that the Clover reader includes a stabilizer when you attach it via the headphone jack, but that only works if your headphone jack is on the left side of the phone (and not on the right, as it is with a Galaxy S5).
- E-commerce support: BAMS will help you build a site using Yahoo! tools (which have been re-branded as Aabaco Small Business). I don’t know this service well enough to judge the quality of the product, but it’s nice to see that Bank of America is at least trying to help businesses succeed.
- Next-day deposits: If you have a Bank of America account, your funds are released to you the next business day. That’s faster than anyone short of PayPal (and you can only access those funds right away if you buy online or use the PayPal debit card). I am confident part of the reason B of A got into the payments game was to keep customers from jumping ship, and this is a major incentive to stay.
- TransArmor data protection and Fraud FlexDetect: TransArmor makes PCI compliance easier, while Fraud FlexDetect allows e-commerce businesses to better detect fraud. It is always nice to see additional tools for merchants, but there’s no reference to what these tools cost on the site, and so it’s hard to gauge the value.
Other popular services:
- Payment gateway/virtual terminal
- Real-time reporting and analytics
- Gift card services
I can’t find any evidence that Bank of America still offers marketing programs through iDeals or Offerwise, which it used to offer. There’s nothing on the website, and Google Searches pull up press releases dating back to 2012, which is pretty old as far as information on the Internet is concerned. However, Clover does integrate with other apps, including marketing and loyalty programs, so it’s likely that B of A and First Data are just going that route.
Fees & Rates
BAMS does not publicly disclose much information on rates or fees. There are no terms of service on the site, either.
This is difficult. So much about rates and fees will depend on your specific business attributes like sales volumes, business type, time in business and so on. So it’s sometimes hard to be specific unless you’re on a flat-fee model — but when I got on B of A’s live chat service, they promptly shut me down entirely. The rep asked for my business name, email, and phone right off the bat, and I disclosed all of it. They said the chat line was only for new merchant accounts and would not even tell me whether the company offered interchange-plus or how long the contract is. Nor would they give me contact information for anyone who could tell me. Instead, they claimed that each package is customized to the individual business. Frankly, that to me says they’re probably very inconsistent and you’ll have to negotiate aggressively.
For the most part, BAMS seems to use tiered pricing models. The company doesn’t advertise interchange-plus, but when we last checked in for a review, we were able to confirm the company does offer it for higher-volume accounts. Depending on your monthly volume, you can expect qualified rates from 1.89% to 2.50% for card-present transactions. Bank of America discloses the following structure for rates based on monthly processing volume:
- $4,999.99 or less – 2.50% + $0.20
- $5,000.00 – $9,999.99 – 2.30% + $0.20
- $10,000.00 – $24,999.99 – 2.05% + $0.20
- $25,000.00 or more – 1.89% + $0.20
B of A also notes here that an additional rate of 1.1% will be applied to non-swiped monthly dollar volume.
I should note that this is listed specifically on the page advertising Clover POS. I do not know whether you’ll get those rates if you set up a plan without the POS. (If you happen to know, please tell us!)
Aside from those numbers, we’ve seen chatter on the web about the following fees:
- Annual fee: $95
- Early termination fee: $500
- Chargeback fee: $15
You are also likely to see a statement fee and in some cases a monthly minimum as well.
Contract Length & Early Termination Fee
The Bank of America Merchant Services contracts are likely three-year agreements that auto-renew in one-year increments (industry standard), alongside an early termination fee of about $500. This is far too expensive for the current payment processing climate, where a good percentage of providers are willing to waive early termination fees altogether for all accounts. Even companies that do have ETFs usually charge somewhere in the $300 range.
I’d recommend that you ask to have the whole fee removed from the agreement, which will require a signed waiver form attached to the contract. If you can’t get this, at least get the contract term reduced to something like 12 months and get the auto-renewal clause removed. There’s simply no reason for most merchants to have to carry a $500 ETF and a three-year contract.
Sales & Advertising Transparency
BAMS displays basically all of the normal transparency issues I’ve come to expect. For starters, its $500 price quote guarantee is basically meaningless, since the company will bend numbers to their breaking point in order to avoid paying this. You can go ahead and try to get your $500 – and please let me know if you do – but I really don’t believe this sort of marketing gimmick says anything good about the provider. It’s a ploy to figure out what you currently pay, which gives you less bargaining power.
The public disclosure of fees and rates offered by this company is halfhearted at best, failing to mention how the tiered platform works and ignoring options like interchange-plus. It outlines pricing for its tablet POS system pretty definitively, which is nice. I’d like to see more useful disclosures elsewhere, however, or at least useful educational material for prospective merchants. There are a few industry tips and white papers it makes available, as well as a resource center. However, there’s no blog, and these resources seem to be updated infrequently. I’ve found conflicting dates on some of them and some of the data presented on the site is 4-5 years old, which is about the point at which data starts to become seriously out of date.
I am utterly unimpressed by the BAMS website. It is clunky, poorly designed, and lacking information in obvious places. The design itself is pretty dated, and I find it difficult to navigate.There are no active social media channels dedicated to Merchant Services – just a LinkedIn page that seems to be used for recruiting.
There’s a B of A Twitter feed and Facebook page, as well as dedicated news and help Twitter channels. However, remember that I said Merchant Services is a different company. You’re better off trying to go through the official support channels 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 of the BAMS sales reps are company employees and not independent agents, this doesn’t guarantee a good sales experience. When dealing with BAMS, I urge you to proceed cautiously and don’t sign anything until you’ve read it carefully. If you need help understanding your contract, reach out to us.
Customer Service & Technical Support
I’m left feeling underwhelmed in terms of the customer and technical support offered at BAMS, both in terms of what they advertise and how current merchants seem to rate it. At B of A, you’ll find:
- Live chat: Offered weekdays during business hours, mostly used for sales it looks like.
- Phone support: Offered 24/7 at 1-800-228-5882.
- Email support: Only recommended for general inquiries. They also still encourage people to write in with comments. Come on, people, it’s the 21st century.
- Small FAQ: This looks fairly useless, and I am quite disappointed by it.
For a company as big as B of A, I’d really expect to see more than this, especially because it claims to serve small businesses. I at least admire the 24/7 phone support, but the FAQ is supremely unhelpful.
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 8 reports on RipOffReport.com, the most recent of which is from October 2016.
The web is populated with complaints against BAMS, if you know where to look. It was fairly simple to pinpoint major trends. The following represent the most common and noteworthy complaints for prospective merchants to consider:
- Expensive terminal lease contracts through First Data Global Leasing: Some merchants have complained about not being aware that they were signing into a 4-year, non-cancellable terminal lease. The whole “not being aware” part can be chalked up to the merchant not fully understanding how leasing works, which is really the responsibility of the sales rep. I personally think terminal leasing is unnecessary to begin with. If you’re a small merchant, and you only need a few terminals, then why not just buy them? They don’t cost much these days. Leases make sense for bigger organizations that need many terminals and don’t have the upfront capital to invest in buying them.
- Withholding of 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 or terminating accounts. You’re going to want to learn how to avoid holds and minimize chargebacks if you plan on signing up with B of A.
- Enhanced Billback: Bank of America and First Data are also known for using a billing technique called enhanced bill back, which isn’t the most transparent billing method. Check out our article about it here.
- High cancellation fee: If you want to cancel before your contract is up (3 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.
- 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.
Positive Reviews & Testimonials
Bank of America has provided a few new authorized testimonials, both in video and text format. These were nice to see but overall unimpressive. The remarks and reviews on the Merchant Services home page are fairly superficial and not very helpful. If you want to check out the video, you can find it on this page. If you’re interested in more intensive case studies regarding many of the same companies featured in the video, check out this page.
Based on the official testimonials offered by B of A, customers enjoy:
- B of A’s gift card services
- Tablet-based POS system
- Quality phone-based customer support
In response to these claims I would like to remind you that:
- Many providers offer gift card solutions.
- You should probably research the huge number of POS systems out there before grabbing blindly for the B of A system.
- I’ve read a substantial number of complaints that say B of A merchant support leaves a lot to be desired.
…Just some things to consider. There’s precious little you can get from B of A that you couldn’t get by signing up directly with First Data — or any of our top-rated processors, for the matter.
I am sure that Bank of America got into the payments game because it wanted a solution to keep its business customers. Partnering with First Data was likely an easy, fast, and probably cheap solution. This company basically has one substantial draw: next day deposits for B of A business account holders. Aside from that, BAMS 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 B of A branch where they already bank.
At the end of the day, B of A Merchant Services can get the job done. If you already have experience with payment processors and you’re willing to advocate for yourself and put in the work to get good rates and good service, then BAMS could probably work out for you. But don’t expect them to go out of their way to give you a good deal or quality service. For less experienced merchants, signing up with Bank of America could be a nightmare of undisclosed fees, high rates, poor customer service and an overall headache. You also have to consider that since First Data provides the actual processing services, you’ll have to contend with many of the issues we outlined in that review as well.
For these reasons, I’m leaving the Bank of America Merchant Services review at 3.5 stars. I’m not saying run for the hills – but please, seriously consider other options before jumping on board with BAMS.
If you have experience with or insight into B of A Merchant Services, leave your thoughts in a comment! Thanks for reading and good luck.