Fattmerchant Review

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Date Established

2014

Location

Orlando, Florida

Pros

• Transparent cost-plus pricing
• 0% markup rate with subscription
• Next-day funding
• Free high-quality invoicing included
• Free analytics dashboard and tools
• No early termination fee
• Integrates with QuickBooks

Cons

• US-based merchants only
• Best value for mid-volume or higher

Overview

I love a cute cartoon piglet as much as anyone, but I refuse to be manipulated by adorable logos and marketing. A piggy bank is, after all, just as cute when it’s empty as it is when full. My goal then when reviewing Fattmerchant was to determine just how much substance laid behind its promising claims and clever marketing. I was prepared — as always — to find little of value when I cracked open the ceramic shell. But, as you can probably guess by the company’s rating here, I found more than IOUs and arcade tokens in there.

This one of the few providers in the industry to offer subscription-based pricing, which eliminates the percentage markup over interchange in exchange for a higher monthly subscription fee. With Fattmerchant, account fees are also consolidated into a single monthly fee, making your costs more stable and predictable. This is a type of cost-plus pricing, except the percentage markup is 0.00%. If you’re like us, the prospect of a zero percent markup should certainly pique your interest. And maybe trigger your “too good to be true” senses as well.

After running the numbers and talking to business owners, I can say with confidence that Fattmerchant offers an extremely good value for many merchants. For instance, almost all merchant account providers — even very competitive good ones — charge a highly inflated rate for ecommerce and phone order accounts. Fattmerchant does not. You’ll get access to a virtual terminal with no added cost and won’t pay a high markup premium for these “card-not-present” transactions. It will cost just a few cents more per transaction. This is almost unheard of in the credit card processing industry. 

Since the part of your markup that would usually be assessed as a percentage of your overall volume is just a single flat fee with Fattmerchant, what you pay is both predictable and has volume discounts built-in. The more you process, the less you pay in terms of the percentage of your overall card payment volume. Check out the fees and rates section of this review for more information on this.

There’s no doubt that this company is part of an exciting and growing trend in payment processing pricing. While it’s not the oldest subscription-based payments processing company, Fattmerchant provides competitive value and service. In many cases, Fattmerchant can provide more value at a lower cost than any of their competitors. This is thanks not only to its 0% markup, but also the company’s high-quality backend dashboard. This web-based software includes advanced invoicing and billing alongside financial reports, inventory management, point of sale, and more. You’ll also get access to a growing list of add-ons and integrations through the company’s app marketplace.

So it turns out that Fattmerchant delivers the fat wallet they promise, offering both a low cost and a high value. This, along with excellent support and sales practices, earns the company a perfect 5 out of 5 stars overall. It’s not an inherently great value for low-volume merchants, but that’s really its only flaw. The company claims to save their merchants an average of 40% on their overall processing costs, and we’ve seen examples of businesses that saved even more.

So give Fattmerchant a shot! There’s no penalty for terminating your account early if you don’t like it. But we think you’ll enjoy the extra heft of your piggy bank.

Products & Services

Fattmerchant supports just about any business type through a combination of in-house and third-party products. Here’s what they have to offer:

• Merchant accounts: All of Fattmerchant’s subscription-based pricing plans come with a full-service merchant account. The company primarily uses Vantiv and National Processing Company (a Vantiv subsidiary) as their backend processors.
• Virtual terminal: For this feature, the company offers their Fattmerchant Payments Online virtual terminal. This proprietary product allows you to process credit card transactions using any device with a web browser. It’s also integrated into the Fattmerchant Payments Mobile app, enabling you to process transactions using your iPhone or iPad. Fattmerchant Payments Online is part of a full online payments hub that includes reporting, analytics, card processing, ACH processing, invoicing, pre-authorizations, and more.
• Omnichannel data analytics: The Fattmerchant Platform provides sales data, analytics, and reporting to help you manage your business. You can access the dashboard via your browser or the Fattmerchant Payments Mobile app. Data from any of your processing solutions – terminals, POS systems, virtual terminals – is accessible from a single login. You’re also able to view data from more than one location, meaning that you can see a holistic view of how your business is doing from a single place. Data from the dashboard also integrates with QuickBooks. Plus, the platform includes an Apps Marketplace which gives merchants the ability to order additional supplies, add more processing solutions, and manage their security.
• Countertop terminals: For brick-and-mortar merchants, Fattmerchant offers several Dejavoo terminals as part of their retail subscription pricing plan. They’re currently promoting the Dejavoo Z8, Z9, and Z11 models, all of which are EMV-compliant. The Z8 is a basic terminal that supports magstripe, EMV, and NFC payments. The Z11 is an upgraded model that includes a touchscreen for capturing a digital signature. Finally, the Z9 is a wireless version of the Z8 that works over 3G or Wi-Fi. If you already have your own terminal, Fattmerchant will reprogram it to work with their system for free.
• Payment gateway: The company doesn’t have a proprietary payment gateway of its own, but they’ll set you up with either Authorize.Net, Payeezy, or the TSYS Payment Gateway. Authorize.Net seems to be the most common choice. Plus, there is no setup fee for any of these providers. Using Fattmerchant to access the Authorize.Net payment gateway is often more cost-effective for merchants since Authorize.Net does not offer the subscription-style pricing model.
• POS systems integrations: Fattmerchant doesn’t offer their own POS hardware, but their system is compatible with Aloha, Micros, Revel Systems, Vend, ShopKeep, and many other POS systems. Contact a sales representative to ensure compatibility if you already have your own hardware.
• Mobile payments: If you need a portable solution, the company offers the Fattmerchant Payments Mobile app, which can be used with or without an optional card reader. It’s only available on iOS at the moment, but an Android version is in the works. The app integrates with both the Fattmerchant Payments Online virtual terminal and the Fattmerchant Payments Dashboard. The app can process credit cards using either photo capture or the optional Fattmerchant Mobile Card Reader, which is EMV-compliant. If you need more than one card reader, they’re $75.00 each.
• Shopping cart integration: Fattmerchant’s payment system is compatible with most of the major online shopping carts on the market. Contact a sales representative to confirm that your preferred cart is one of them.
• Developer tools: For developers or businesses that would like to use Fattmerchant for processing, but have their own custom software needs, the Fattmerchant Payments API allows for easy integration. Note that web development skills will be required for many tasks, so you will likely have to hire someone to help. Fattmerchant just provides the documentation.

Fees & Rates

To understand how Fattmerchant’s pricing works, you need to understand interchange-plus pricing. With interchange-plus, the standard “wholesale” cost of each transaction (which is the same no matter which processor you use) is separated out from the markup, which is the portion that the merchant account provider (Fattmerchant in this case) actually has control over.

After you understand interchange-plus, you’ll easily be able to pick up on how subscription pricing works. Here’s an example of a typical fair market interchange-plus quote:

• $40 per month including virtual terminal and PCI compliance

• 0.35% + $0.15 per transaction

Fattmerchant’s pricing for an equivalent plan looks like this instead:

• $99 per month including virtual terminal and PCI compliance

• 0.00% + $0.15 per transaction

While the monthly fees are higher with a subscription service like Fattmerchant, the percentage fee is eliminated. You pay your monthly fee for “membership” in the credit card processing networks. After that, you just pay a small fee for each transaction (aside from the “wholesale” cost, of course). It’s as simple as that.

Want to know which is a better deal? Well, the truth is that it depends on a number of factors including your average transaction size, total monthly credit card processing volume, and how much value you find in the web-based software Fattmerchant provides along with your membership. It tends to be a bit more expensive than average for low-volume merchants, especially if they don’t have much use for the invoicing, billing, and reporting tools. These tools can add a huge amount of value to the account because they would be expensive if purchased elsewhere, and even then they wouldn’t have the same level of integration as the built-in tools.

Volume Discounts

A cool thing about subscription pricing is that it has volume discounts built-in. Typically, you would need to constantly negotiate for better rates as your business grows. Not so with Fattmerchant. Your subscription fee remains the same, even as your volume grows. This means that your subscription fee becomes a lower percentage of your volume as your volume increases. This is ingenious! For instance, $99 is 0.99% of $10,000 but only 0.099% of $100,000. Subscription pricing with Fattmerchant puts you on a sliding scale, where your percentage markup goes down as your volume goes up. This is smart and fair, and I really like it. In theory, it means that you’ll never have to negotiate down your rate again. And you’ll never overpay again either. As your business grows, you’ll automatically get a lower percentage rate. Even if you just have a busy month, you’ll get the rate you deserve for that busy time instead of overpaying with the rate designed for your slower average months. It’s a very logical approach!

Convinced that subscription pricing is worth a shot? Send Fattmerchant a message to get started. You can schedule a demo of the analytics and payment products to see if they might be useful for your business before signing up.

Contract Length & Early Termination Fee

Don’t be confused by the “no contracts” claim on Fattmerchant’s website. Like any other business relationship, your merchant account with Fattmerchant will be covered by a contract. In fact, they even provide their current Terms and Conditions right on their website — something very few providers will do for you. However, it’s not the typical three-year contract with an automatic renewal clause and a hefty early termination fee (ETF) if you close your account early. Instead, all Fattmerchant accounts feature month-to-month billing with no early termination fee. You’ll need to provide thirty days’ notice when you close your account, but that’s it. At the end of the day, their “contract” allows them to submit your information for approval with their underwriting department, but in no way holds you to any monetary obligations.

It’s also important to note that the Terms and Conditions provided on Fattmerchant’s website are from their backend processor, and that document does mention a three-year initial term with an automatic renewal clause extending the contract for two-year periods. This provision does not apply to Fattmerchant customers, as your month-to-month term will be listed on your Merchant Processing Agreement/Application. Fattmerchant doesn’t provide a blank copy of this document, but it’s mostly a form, and the specific pricing provisions will vary with each merchant. The Merchant Processing Agreement/Application is also part of your contract, so you’ll want to review it very carefully before signing up for an account.

Sales & Advertising Transparency

Your first impression of Fattmerchant will probably be through their website, which has recently been redesigned. As you would expect from a young, tech-focused company, it’s very professional looking and easy to navigate. There’s a lot of useful, easy-to-understand information for prospective merchants and clear descriptions of the company’s standardized pricing plans. We’re sad to see that their FAQ has been deleted with the re-design, but most of this information is still available on the site – it’s just spread around a little more. At the same time, the company is continuing to update their Blog with useful and informative articles. We’re also very impressed by the inclusion of the Terms and Conditions right on their website. Just be aware that (1) you will also have a Merchant Application that spells out pricing and other terms specific to your contract, and (2) the posted agreement is only for National Processing Company. Your contract will be different if you’re signed up with another backend processor.

Fattmerchant relies on an in-house sales team and an online sign-up process to bring on new merchants. Because the company mostly sets up new accounts according to one of their three standardized pricing plans, the online setup process is a good choice if you’re in a hurry to get your account activated as soon as possible and you’re confident that one of those plans is a perfect fit for your needs. We recommend talking to a sales representative rather than signing up online if you have any doubt about how well Fattmerchant’s standard plans will fit in with your business.

Like any technology-focused merchant services company, Fattmerchant has a very active social media presence. Accounts on Facebook, Twitter, LinkedIn, and even Google+ are frequently updated with new content. They even have an account on Instagram. Also, their YouTube channel is very robust, with dozens of educational videos and a few customer testimonials.

Customer Service & Technical Support

Fattmerchant offers free 24/7 technical support via telephone and email. Live chat is also available during regular business hours. We haven’t received a lot of feedback about the quality of that support, but the few reports we’ve seen have been quite positive. In the merchant accounts industry, customer support is an area where companies frequently fall short. Most providers – even some of the really good ones – receive a lot of negative feedback about their customer support from frustrated merchants. So, it’s quite a good sign that Fattmerchant is apparently doing well above-average in this area.

Have you had any experience with Fattmerchant’s customer service? If so, please leave your impressions in the Comments section below. Thanks!

Negative Reviews & Complaints

Fattmerchant has been accredited with the BBB since 2015 and currently has an A+ rating. The company has had only two complaints within the last three years, and zero complaints within the last twelve months. You’ll also find five reviews of the company on their BBB page, four positive and one negative. It appears that the single complaint was resolved to the satisfaction of the merchant, and Fattmerchant deserves credit for going to great lengths to untangle the situation that resulted in the criticism. Overall, this is a very low complaint volume, particularly as it encompasses almost the entire period that the company has been in business. It’s also practically unheard of for a merchant services company to have more positive reviews than complaints. Needless to say, it’s a good sign that Fattmerchant is providing fair and honest service to their customers.

There are no complaints whatsoever against the company on Ripoff Report, and they currently have an overall 3.5-star rating on Yelp. Note that this rating comes from six 5-star reviews and two 1-star reviews, both of which received a response from Fattmerchant’s CEO.

Overall, Fattmerchant shows very little negative feedback from users, which is an excellent sign in an industry where even the more reputable providers receive a lot of criticism. None of the adverse reports suggest any particular trends or recurring issues that should raise any red flags.

Positive Reviews & Testimonials

You’ll find a brief written endorsement and links to video testimonials on Fattmerchant’s YouTube channel and the Our Customers page of their website. The testimonials – mostly from local businesses in the Orlando area – come across as unscripted and genuine. The company’s customer service receives a lot of praise, as well as the overall cost savings that clients reported after switching from their previous providers.

Fattmerchant also has four positive reviews on their BBB profile. This is somewhat remarkable given that most people use the BBB website to criticize companies, not praise them. They’re also the only provider we’ve seen that has more praise than condemnation on their BBB profile. The same trend is seen in their Google Reviews as well as Consumer Affairs.

Final Verdict

As you might have guessed, we really like Fattmerchant. In addition to their unique take on the subscription pricing model, their open, honest business style is a refreshing change of pace. Far too many companies in the merchant services industry rely on deception to lure in customers, so it’s a genuine relief to find a provider that treats their customers with respect and offers such a flexible and affordable service. We would like to see the success of Fattmerchant and the small handful of similar providers lead to long-lasting changes throughout the entire processing industry.

At the same time, no provider is perfect, and there are a few things to look out for in evaluating whether Fattmerchant is a good match for your business. For one thing, the company does not provide high-risk merchant accounts. Beyond that, it may not be a great value for low-volume merchants, especially low-volume retail merchants. Even low-volume merchants may find that the value provided by Fattmerchant’s platform — including invoicing, billing, POS, inventory, and other features — makes the service worthwhile. But the more you process, the more you’ll save.

Even with those caveats, Fattmerchant easily earns a rating of 5 out of 5 stars and our highest recommendation. They may be a young company, but they’ve enjoyed remarkable success so far and seem poised to go even further in the future. If you think that their service could be a benefit to your business, by all means, give Fattmerchant a try. Your bank account may gain a bit of fat thanks to this pricing model.

As always, we encourage readers who have had personal experience with Fattmerchant – good or bad – to leave a review in the comments section below. Thanks for your help and feedback!

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Tom DeSimone

Based in New York’s Hudson Valley, Tom has written for Merchant Maverick since 2013 and currently serves as the website’s managing editor for payment processing content. His work is cited by publications including TechCrunch, Washington Business Journal, and Bank Advisor. Press seeking expert comments for stories related to credit card processing can reach him via LinkedIn for a prompt reply.

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