Clearent Review

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Pros

• Interchange-plus pricing available
• Full lineup of products and services

Cons

• Three-year contract with early termination fee
• Uses independent sales representatives
• High complaint volume relative to size

Overview

Clearent is a merchant services provider headquartered in Clayton, Missouri. Founded in 2005, the company also has offices in Louisville, Kentucky, Salt Lake City, Utah, and West Palm Beach, Florida. In 2017, Clearent acquired Payment Alliance International (PAI), a smaller merchant services provider that had a large high-risk portfolio of firearms merchants. Although the merger has gone well for both companies, it hasn’t been so great for some of PAI’s former clients. Merchants who had previously been with PAI were unceremoniously switched to new contracts with Clearent, and many of them saw dramatic increases in their processing rates and account fees as a result. This has, in turn, led to a surge in complaints against Clearent with the BBB and on other consumer protection websites.

In March 2018, Clearent was itself acquired by Advent International, a global private equity investment firm. At about the same time, Advent also acquired FieldEdge, a field service management software company. FieldEdge and Clearent are now merged into a single business entity. With all this merger and acquisition activity, Clearent currently serves over 45,000 merchants and processes over $16 billion in transactions annually.

Of course, bigger isn’t always better, especially from a consumer standpoint. Although Clearent is large enough to offer a full range of products and services (including a number of impressive proprietary features), the company’s contract terms and overall costs put them squarely in the middle of the pack. Heavy use of independent sales agents to market their accounts makes it even more difficult to recommend them.

Overall, Clearent rates 3.5 out of 5 stars, mainly because their use of interchange-plus pricing brings up their score a little. If you’re looking to open a merchant account for your new business or switch from your current provider, check out our Merchant Account Comparison Chart for a side-by-side comparison of our top-rated providers.

Products & Services

Clearent offers a full range of products and services for businesses of all sizes. Here’s an overview of their main features:

• Merchant Accounts: The company’s merchant accounts are underwritten by TSYS Merchant Solutions, one of the biggest names in the processing industry. Despite their huge size, TSYS is one of the better direct processors we’ve reviewed. Just remember that Clearent will be your primary point of contact for most customer service issues. The only time you might have to deal with TSYS directly is if a hold is placed on one of your transactions, or your account is frozen or terminated. See our article, How to Avoid Merchant Account Holds, Freezes, and Terminations, for some tips on preventing any of these occurrences.
• Credit Card Terminals: Like almost all merchant services providers, Clearent offers countertop terminals for retail merchants who need them. Although they don’t provide information on specific models, their terminals all support magstripe, EMV, and NFC-based payment methods. They also feature EMV Quick Chip technology, which reduces the time needed to complete an EMV transaction from 15-30 seconds down to less than five seconds. It’s not clear whether terminals are leased or offered for direct sale, but we strongly advise you to avoid leasing credit card terminals.
• Payment Gateway: For ecommerce merchants, the company offers its Quest™ Payment Gateway, a proprietary product that’s fully integrated with their backend Horizon™ Processing Engine. The Quest gateway includes all the standard features you’d expect from a modern payment gateway, including point-to-point (P2P) encryption, a customer database, and support for recurring billing. Quest is PCI compliant, but the company doesn’t explicitly advertise that it meets Level I PCI compliance standards. Online payments can be accepted via either a hosted payments page or an ecommerce plugin. You can also use the gateway in a retail, mail order, or telephone order setting.
• Virtual Terminal: The company’s Clearent Virtual Terminal is another proprietary product that connects to the Horizon™ Processing Engine. Transactions can be keyed in manually or swiped using an IDTech magstripe card reader. The Clearent Virtual Terminal uses point-to-point (P2P) encryption and supports the entry of Level II processing data (which will qualify you for lower interchange rates). It does not appear to support Level III data for B2B transactions. We recommend virtual terminals to mail order and telephone order businesses that either don’t have a website or don’t want to set up their existing site to accept online orders.
• Mobile Payments: Clearent’s mPOS solution is offered through a partnership with SwipeSimple. The system uses card readers from IDTech and the SwipeSimple app, which is available for both iOS and Android. A variety of IDTech mobile card readers can be used, some of which support both EMV and NFC-based payment methods. No pricing information is available.
• Point-of-Sale (POS) Systems: Clearent doesn’t have a partnership with a point-of-sale (POS) hardware vendor, but you can integrate their payment system with your existing unit. We highly recommend consulting with a sales representative to ensure compatibility before choosing this option. The company also has a partnership with InStore to provide a tablet-based POS system for iPads. Additionally, they claim to be compatible with a wide variety of third-party tablet-based POS applications.
• American Express Processing: Like most major credit card processors, Clearent supports the American Express OptBlue program to make it easier and more affordable for your business to accept American Express credit cards. For more details on how this program works, check out our article, How To Save On American Express Credit Card Processing With OptBlue Pricing.
• eCheck (ACH) Processing: If you need to accept paper checks or eCheck payments, Clearent offers a special program to add this option to your account. You can expect to pay an additional monthly fee for this service.
• Next Day Funding: With Clearent’s Next Day Funding program, you can batch out as late as 11:00 PM Eastern and receive your funds the next business day. Funds are delivered via ACH deposit. There is no discussion on the website as to whether this is a free, standard feature or an optional service that comes with an extra fee.
• Online Reporting: If you want to monitor the status of your business in real-time (and we certainly hope that you do), Clearent offers their Compass® online reporting tool. Compass® allows you to access your account 24/7 and provides a complete breakdown of every transaction and every fee. It also automatically generates monthly statements for your records.
• American Express Merchant Financing: Clearent can approve your business for loans in amounts anywhere from as little as $5,000 to as much as $2,000,000. They also offer a Merchant Cash Advance program for short-term loans in smaller amounts.
• Cash Discount Program: We’re beginning to see more and more merchant services providers offer this kind of program, which basically involves transferring the cost of credit card processing onto your customers. While you might think that this is a wonderful idea, it can put you at a competitive disadvantage unless you’re in an industry where surcharging is an accepted practice. See our article, The Truth Behind Free Credit Card Processing, for more details on how cash discount programs actually work.

Fees & Rates

There isn’t much to say here. Like many traditional merchant services providers, Clearent doesn’t disclose any information about fees or rates on its website. Their main reason for doing this is that processing rates are highly variable and need to be customized for each merchant. If you want to find out how much a merchant account with Clearent will cost you, you’ll have to contact the company’s sales department and request a quote.

Feedback from merchants indicates that Clearent primarily offers interchange-plus pricing to most of its customers. This is a very positive feature, as we believe interchange-plus pricing to be the most transparent and affordable pricing structure for businesses processing at least $5,000 per month. With interchange-plus, you’ll always know exactly how much of a cut your provider is taking from your processing charges. Interchange costs will still be highly variable, however, so don’t expect to have the same kind of predictability that you would have with a flat-rate pricing plan. Interchange-plus pricing tends to be less expensive overall, so it’s a worthwhile trade-off.

While most low-risk merchants will be offered interchange-plus pricing, those in the high-risk category can expect to be offered a tiered pricing plan instead. We dislike tiered pricing because it’s almost always more expensive and also because it obscures the markup your processor is charging in addition to the basic interchange costs. If you’re a high-risk merchant, however, you’ll probably have no choice but to accept a tiered plan. Many former clients of Payment Alliance International who have been switched to Clearent are on tiered pricing plans.

Account fees are always a complicated subject, both because there are so many of them and also because they vary a lot from one business to another. Although Clearent doesn’t disclose any of their fees on their website, they do include a link to their current Merchant Agreement, where you’ll find a few fee disclosures. For example, the Merchant Agreement indicates that Clearent charges an annual fee for maintaining your account. However, the amount of this fee is not disclosed and presumably will be different for each merchant.

While it’s a good idea to read the Merchant Agreement thoroughly before you sign up for an account, be aware that it only represents a small part of your complete contract. You’ll also have a Merchant Application and, possibly, a Fee Schedule as well. Every fee you could potentially be liable for should be listed in these documents. However, be aware that most providers usually include a clause in their contracts that allows them to raise existing fees or add new ones from time to time, with or without notice to you.

Contract Length & Early Termination Fee

Clearent’s Merchant Agreement sets the standard contract length at three years. After this initial term expires, an automatic renewal clause will extend your contract for one-year periods at a time. There’s also a flat $395 early termination fee that applies if you close your account for any reason before your current contract term expires. If you want to close your account without being charged the early termination fee, you’ll have to do so at the end of your contract term and before it automatically renews. Clearent requires a minimum of 45 days’ written notice to close an account. This is a very important point: you cannot close your account over the telephone. Providers usually require you to fill out a special form, which you’ll have to obtain from them in advance.

While these terms are very much in line with the industry standard, they’re still quite disappointing. Locking you into a long-term contract makes it much more difficult for you to switch to a competing provider that offers better service and lower rates. It also removes any incentive your processor might have to provide you with high-quality service and support. Long-term contracts are widely disliked by merchants, and there’s a trend within the industry to do away with them. Many other providers now offer true month-to-month billing, where you’re free to close your account at any time – and without having to pay an early termination fee. Although Clearent doesn’t offer this type of arrangement, you can (and should) request a waiver of the early termination fee when negotiating your contract. While you’ll still be under a long-term agreement, you shouldn’t have to worry about paying a penalty if you later decide to close your account. Be sure to get any waiver in writing and keep a copy for your records.

Sales & Advertising Transparency

Clearent’s website has a modern, professional layout and is easy to navigate. However, as we’ve noted above, there’s no disclosure of any pricing information whatsoever. The site also lacks a knowledgebase or any helpful educational information. While there is some discussion of products and services, it mainly serves as a marketing tool to promote the company. Do not expect to be able to make an informed decision as to whether Clearent is right for you based solely on the limited information provided on their website. Instead, you’ll have to contact the sales department and get a full quote covering processing rates, account fees, and contract terms.

The company uses a combination of both in-house sales representatives and independent sales agents to market its accounts. While this is a common practice in the credit card processing industry, it definitely doesn’t benefit merchants in any way. Independent sales agents are frequently hired with little or no experience, then given a minimal amount of training before being sent out into the wild to try to make a sale. Although there are certainly some very successful, professional agents working independently, the odds are high that you’ll have a bad experience if you have to work with one. We’ve found literally hundreds of complaints from merchants about independent agents who deliberately misled them about the terms of their contracts.

Clearent’s website includes job listings for openings within the company, and there are a very high number of “Account Executive” positions listed in cities where the company does not have an office. These listings are for independent sales agents, and the reason there are always openings for these positions is that the turnover is very high. Although these positions are full-time and include a wide range of benefits, pay is listed as being on a 100% commission basis. With no experience in the processing industry being necessary and previous sales experience merely “preferred,” you can bet that many of the people hired into these positions will have a short, unsatisfactory time with the company before moving on to something else and creating another job opportunity for someone new.

Clearent has an active social media presence, with accounts on Facebook, Twitter, and LinkedIn. They also have a YouTube channel. These social accounts include numerous educational articles and news about the company. The YouTube channel features five testimonials from Clearent customers. The educational items include a combination of content from the company’s blog and third-party posts.

Customer Service & Technical Support

Clearent offers customer support during business hours via telephone and email. After-hours support is also available from TSYS. However, you should be aware that since TSYS is merely the company’s backend processor, they won’t be able to help you with technical issues involving hardware or software products.

Support quality appears to be reasonably good, at least when it comes to resolving issues with the company’s products and services. While we’ve found several complaints alleging poor customer support when it comes to dealing with a transaction hold or account freeze, remember that these actions are almost always initiated by the backend processor, not Clearent. Because the company relies on third parties for its transaction processing and many of its ancillary products and services, it’s essential to contact the appropriate party that’s best equipped to handle your particular issue. Obviously, Clearent should be your main point of contact for issues involving any of their proprietary offerings, such as the Clearent Payment Gateway or the Clearent Virtual Terminal. For problems with third-party products such as credit card terminals or the SwipeSimple mPOS system, you should contact the manufacturer.

We’d also note that Clearent’s customer support team appears to be very proactive in responding to public complaints, such as those filed with the BBB or on social media. Complaints are addressed in a professional manner and refunds are issued when appropriate.

Negative Reviews & Complaints

Clearent has been accredited by the BBB since 2010 and has an A+ rating. The company has received 21 complaints within the last three years, with 12 of those complaints coming within the last year. Many of the most recent complaints involve former customers of Payment Alliance International, who allege that the company would not honor the terms of their previous contracts with PAI and that they experienced significant fee increases as a result. While these complaints are entirely justified, it appears that Clearent has been very willing to allow dissatisfied customers to close their accounts without having to pay the $395 early termination fee.

While there currently aren’t any complaints about the company on Ripoff Report, there are a few scattered complaints on some of their social media sites. Common issues include poor customer support, difficulty in canceling an account, and withholding of funds. As we’ve noted above, canceling an account requires that you follow the instructions contained in your contract to the letter. Written notice is required, and you’ll probably have to fill out a special form that you can only obtain directly from Clearent. Merchant services providers are notorious for making it as difficult as possible to cancel your account, and Clearent doesn’t appear to offer any advantages in this area. If you’ve had a large transaction flagged for review and your funds held, understand that this action is taken by the backend processor (in this case, TSYS), and Clearent doesn’t have your money. They want the funds released so they can get paid, too. However, they’re also unlikely to take action on a given transaction unless you contact them first and put some pressure on them to do so. In this situation, you’re probably better off raising the issue with the processor directly rather than relying on Clearent’s customer service to resolve it for you.

Positive Reviews & Testimonials

We found a few very brief testimonials scattered throughout Clearent’s website, but none of them are particularly useful or convincing. There are also five testimonials on the company’s YouTube channel, but four of them are from people who work for Clearent. Only one testimonial is from a business owner who has a merchant account with the company. Nonetheless, it’s a relatively compelling and informative testimonial.

If you’ve had a positive experience with Clearent, please be sure to tell us about it in the Comments section below. Thanks!

Final Verdict

Like most merchant services providers, Clearent has its good points and its not-so-good points. We’re very impressed with the company’s proprietary offerings, particularly their Compass online reporting system and their payment gateway. We also like the way they’ve fully embraced EMV payment technology in all their hardware products, even mobile card readers. Extensive use of interchange-plus pricing is another point in their favor, although not all merchants will receive this type of pricing plan.

At the same time, there are some clear shortcomings to the company’s pricing and contract terms. Long-term contracts with expensive early termination fees have long been unpopular with merchants, and today many companies are phasing them out entirely in favor of month-to-month billing arrangements that make it much easier to close your account if the need arises. Consequently, it’s disappointing to see Clearent continuing to impose these kinds of terms on their merchants when the industry is clearly moving in the opposite direction.

We’re also disappointed by the company’s continued reliance on independent sales agents to sell their accounts. This practice all too often leads to a very bad sales experience for the merchant, and we’d like to see Clearent switch to a full in-house sales team in the future.

All things considered, Clearent rates 3.5 out of 5 stars overall. While they offer several impressive products and services, their contract terms, overall costs, and use of independent sales agents weigh against a recommendation. If you’re planning to open an account with them, we highly recommend that you at least negotiate for interchange-plus pricing and a waiver of the early termination fee before signing up. We’d also caution you to never rely on the verbal assurances of a sales agent, and review your contract very carefully before you commit to a relationship with the company. If you’d prefer to work with a company that will guarantee you interchange-plus pricing, fully disclose their costs up front, and offer you month-to-month billing with no cancellation fees, check out our Merchant Account Comparison Chart for some of our most highly-recommended providers.

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