Capital Merchant Solutions Review

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Overview:

Capital Merchant Solutions (CMS) is a merchant account provider headquartered in Bloomington, Illinois. First established in 1997 as a paper check processor, they’ve expanded into a full-service merchant account provider, covering credit card payment processing, eCommerce, and mobile payments.

CMS operates a number of different websites, each aimed at a particular aspect of their business services. TakeCardsToday.com is their primary website, focusing on credit card processing for retail businesses. Among their other, more specialized sites are the following:

• DowCommerce.com, which markets their proprietary DowCommerce payment gateway for eCommerce merchants,
• HolyProcessing.com, a specialized site for religious organizations,
• ProcessAway.com, which offers a variety of payment options for mobile businesses,
• RateCheckup.com, another specialized site focused on medical and dental offices, and
• WebstoreMerchantAccounts.com, which supports Yahoo Stores.

For most people, TakeCardsToday.com will be your first stop if you’re considering setting up a merchant account with CMS. Regardless of which one of their websites you use, be aware that Capital Merchant Solutions is the company you’ll be doing business with for all of them. Ordinarily, we’re highly suspicious of companies that spread their business over multiple websites. It can easily lead to confusion on the part of merchants (sometimes intentionally), and it can also spread complaints against a business among multiple DBAs. That doesn’t appear to be the case with CMS. Each of their websites clearly identifies Capital Merchant Solutions as the sponsor of the site, and marketing information is mostly consistent across all of their sites.

CMS specializes in supporting small to mid-sized businesses and claims to have worked with over 25,000 merchants since inception. Despite their large volume of customers, they currently have a remarkably clean slate with the BBB, with just one complaint filed within the last three years, and one complaint in the last twelve months. Given the size of their operation, they do seem to be keeping most of their merchants happy.

Overall, CMS offers such a wide variety of merchant account services that they’re a good fit for just about any type of business. Highlights include the introduction of interchange-plus pricing for some accounts (which they currently don’t advertise), competitive rates and fees, and generally offering month-to-month contracts with no early termination fee. At the same time, you might still have to watch out for a number of additional fees and confusing contract terms that are, unfortunately, still very common in the credit card processing services industry.

Products and Services:

CMS offers a full suite of features that cover most, if not all, of the needs of a small business. These include the following:

• Merchant accounts: While CMS will maintain your merchant account, the actual credit and debit card processing is performed by a third-party processor. CMS doesn’t disclose which processors it uses on any of its websites, so be sure to review your contract carefully to know who you’ll be doing business with.
• Terminals: CMS will include one “free” terminal when you sign up for a merchant account with them. They advertise a number of terminal choices on their website, including the Verifone Vx510le, Hypercom T7Plus, and Nurit 2085 models. More powerful models are also available, but they’re not free. CMS also offers the WaySystems MTT 1581 wireless terminal. While the terminal itself is free, the $20.00 per month data plan that comes with it is not. I wouldn’t recommend getting a wireless terminal unless your business really needs this capability. All of the terminals currently offered by CMS are EMV-compliant. Be aware that none of these terminals are really free – your $34.95 monthly account fee covers this item without billing you separately for it. It’s still a much more flexible (and much less expensive) option than the over-priced long-term leases that most providers offer.
• Mobile processing: Advertised on their ProcessAway.com site, CMS offers an iPhone-based mobile processing capability. For $24.95 per month, you get a merchant account, a payment gateway, and an iPhone Card Swiper. Unfortunately, the swiper is a sleeve-style design that connects to Apple’s old 30-pin connector and will only fit iPhone 4S and earlier models. If you need (or want) a smartphone-based processing solution, I’d recommend Square instead.
• Payment gateway: For eCommerce merchants, CMS offers a choice of either their proprietary DowCommerce gateway or the ever-popular Authorize.net. The DowCommerce gateway includes an integrated shopping cart, recurring billing, and QuickBooks integration. It costs $19.95 per month and there is also a $0.10 per transaction fee. Authorize.Net costs $15.95 per month, but you’ll have to pay extra to add recurring billing and a shopping cart. Both gateways charge an additional, undisclosed fee for fraud detection.
• Check processing: The CheckMAN check-processing software was CMS’ original product, and it’s included for free with their merchant accounts. CheckMAN works by transferring a customer’s check information into the program and then printing out a check that you can cash. It allows you to accept checks via telephone, fax, email, or the web.

Fees and Rates:

The fact that CMS actually has a Pricing page puts them ahead of their competitors in an industry where most companies don’t include any information about processing rates or fees on their websites. Pricing information is generally consistent across all of the numerous websites that CMS maintains, although it’s not 100% perfect.

CMS offers both a traditional, tiered pricing model and an interchange-plus model. The good news is that they’re increasingly moving away from tiered pricing in favor of the fairer and more transparent interchange-plus pricing. The bad news is that, with tiered pricing being so prominently shown on their primary website, it’s very easy to sign up for it without being aware that there are other, more affordable options available. CMS currently advertises the following tiered pricing rates on their TakeCardsToday.com website:

Pay As You Go

• No monthly fees
• 4.9%
• $0.35 per transaction

Retail

• $20 per month
• Interchange + $0.15
• $0.25 per transaction

Ecommerce

• $35 per month
• Interchange + 0.20%
• $0.25 per transaction

Mobile

• $35 per month
• Interchange + 0.20%
• $0.35 per transaction

Note that these are the discount rates for qualified transactions only. As such, they represent the lowest possible rates you could have to pay. Mid-qualified and non-qualified transactions will process at significantly higher rates. Because CMS doesn’t disclose these rates, the rate information provided is misleading and not useful for estimating your monthly processing costs.

Religious organizations should contact the company through their HolyProcessing.com website for slightly lower rates.

Fees associated with your account are another source of confusion. While CMS is still advertising separate fees on their websites, it appears that they’re signing new merchants up for an all-inclusive, $34.95 per month account fee that includes PCI compliance, monthly statements, and use of a “free” terminal. If you’re still on the al-la-carte fee system shown on their website, you’ll have to pay a Statement Fee of $8.95 per month. The website also shows a $13.99 Internet Gateway Fee, but this is probably outdated information. As noted above, basic gateway fees are $15.95 per month for Authorize.net and $19.95 per month for the DowCommerce gateway.

CMS doesn’t mention PCI compliance fees on their website, but that doesn’t mean you won’t have to pay them. PCI compliance appears to be included in the new, all-inclusive $34.95 rate plan. However, older accounts may still have a separate PCI compliance fee. As always, review your contract carefully to see exactly what you’re paying for.

Contract Length and Early Termination Fee:

CMS advertises month-to-month contracts with no early termination fee on their website. For the most part, this is true. The sole exception is for high-risk merchants, who apparently are still locked into a three-year contract with an early termination fee (ETF) as high as $500.00. You’ll still see a number of old complaints floating around on the internet from unhappy customers who were charged an ETF, but for the most part, this practice has been discontinued. As always, be sure to read your contract carefully before signing up.

Sales and Advertising Transparency:

CMS scores higher than the industry average in this category, mostly because they disclose at least some of the possible rates and fees you’ll be paying on their numerous websites. While the rates advertised on TakeCardsToday.com are clearly labeled as discount rates, there’s no mention of the fact that they’re only the qualified transaction rates, or that the non-qualified transaction rates will be higher. There’s also no mention of interchange-plus pricing, despite the fact that this is now their primary pricing model. Pay close attention to the fine print disclaimer underneath their advertised rate information:

The above rates and fees are not meant to be entirely inclusive; other rates and fees may apply to certain transaction types. Entire rate and fee schedule will be included in your Merchant Application & Merchant Processing Agreement. These will be available for review prior the setup of your merchant account.

In other words, be sure you fully understand the pricing model they offer you and be sure to review your contract very carefully before you sign on the proverbial dotted line.

The company’s use of multiple websites to market its services also causes a number of problems, mainly that the information presented isn’t 100% consistent from one site to another. Sometimes, the information isn’t even consistent within the same site. CMS really needs to update their websites to reflect the newer interchange-plus pricing and the all-inclusive $34.95 monthly fee.

CMS also has something of a presence on social media, but not much. While their Twitter account is dormant, they do occasionally post updates on their Facebook page. They also have a FAQ on their main website that really functions more like a blog than a true FAQ. Unfortunately, it hasn’t been updated since 2011.

Customer Service and Technical Support:

CMS generally exceeds the industry average in the area of customer service. Unfortunately, the industry average in this area is pretty low, with poor to downright awful customer service being a common theme in merchant complaints about credit card processing companies. CMS handles customer service and support primarily through a toll-free telephone line that’s available 24 hours a day, 365 days a year. While you may not actually be able to reach a customer service representative at any hour of the day, it’s worth noting that praise for the availability and quality of their customer support was a common theme in many of the positive testimonials I’ve found about CMS.

While CMS’ phone-based customer support is pretty good, their web-based support is a little lacking. Their numerous websites all feature brief FAQs about their service, but that’s about it. There’s no detailed knowledge-base and no live chat feature. This is an area that CMS should put some effort into improving.

Negative Reviews and Complaints:

CMS has been accredited by the BBB since 2004 and has an A+ rating. The company currently has only one complaint filed against it within the past twelve months. Remarkably, this is also the only complaint within the past three years. For a company of their size, this is pretty impressive.

Despite their clean bill of health from the BBB, CMS does have a few unhappy customers on Ripoff Report. While there are currently nine reports overall, all but one of them are over three years old. Ripoff Reports never takes down complaints, so they’ll probably be there forever.

With such a low volume of complaints, it’s hard to discern a pattern among them. Nonetheless, the company’s advertising of a “free” Authorize.net payment gateway seems to have caused some confusion. While you won’t have to pay a license or setup fee (Authorize.net normally charges $49.00 for this), you will still have to pay a monthly fee (currently $15.95 or higher) to use it. CMS clearly discloses this monthly fee on their website, so don’t be fooled into thinking that it’s actually 100% free.

There are also still some complaints about a hidden early termination fee, which CMS no longer charges (unless you’re a high-risk merchant). Something to be aware of is that while CMS has not enforced an ETF against a non-high risk merchant since 2011, the clause might still be included in your contract whether you’re a high-risk merchant or not. It’s probably safer to ensure that this clause is not added to your contract before you sign up than to hope that this non-enforcement policy will protect you in the event that you decide to close your account. If you’re already using CMS and aren’t in the high-risk category, now would be a good time to re-negotiate your contract and get this clause removed if it’s still there.

Positive Reviews and Testimonials:

CMS’s main website, TakeCardsToday.com, features no less than twelve glowing testimonials from satisfied customers. Most of the positive comments center around their excellent customer service. While the testimonials seem sincere, they’re undated and don’t include links to contact the commenters for a follow-up. As always, we encourage readers who have had positive (or not-so-positive) experiences with the company to tell us about it in the Comments section below.

Final Verdict:

Overall, Capital Merchant Solutions rates an impressive 4 out of 5 stars. Highlights include competitive rates, the availability of interchange-plus pricing, strong customer service, and month-to-month contracts (for most merchants). CMS loses a few points overall for their somewhat confusing branding on multiple websites, misleading (and inconsistent) advertising related to fees, and lack of web-based technical support. The company’s shift to offering month-to-month contracts and interchange-plus pricing shows that they are responding in a positive way to changes in the credit card processing industry brought on by increased competition.

If you’re a high-risk merchant, I’d approach CMS with caution. While they don’t advertise themselves as high-risk specialists – or even use the term “high-risk” anywhere in their marketing – it’s clear from their appeals to merchants with bad credit and their claims that almost all applications for an account are approved that they’re angling for the high-risk segment of the market. If you fall into that particular category, expect to pay higher rates and be locked into a long-term contract that still includes an early termination fee. In other words, you won’t enjoy the benefits of the recent positive changes that CMS has taken to make their services more competitive. As a better alternative, I’d recommend Durango Merchant Services, a true high-risk specialist and a very solid company.

If you’re not a high-risk merchant, CMS is easier to recommend. Small retail businesses that only need one terminal and online businesses that don’t really need any will benefit from their competitive prices and simplified fee structure. As with any processor, you’ll want to negotiate aggressively to get the lowest rates you qualify for and the best contract terms available. You’ll also want to review your contract thoroughly before signing up. If you’re not sure that CMS is right for you, or you want a better idea of what the competition is offering, take a look at our review of the best credit card processing companies. You can also compare the best processors head-to-head using our Merchant Account Comparison Chart.

If you’re currently using CMS or have been a customer in the past, please leave a review and rating in the comment section below.

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