Flagship Merchant Services Review

Pros

• No early termination fee (if free equipment offer declined)
• No setup or application fees
• No gateway setup fee

Cons

• Limited pricing disclosed online
• High complaint volume
• Poor reputation for customer service

Flagship Merchant Services Overview

Flagship Merchant Services is a merchant services provider headquartered in Westlake Village, California. While the company has been in business for over twenty years, today it’s mainly a reseller for iPayment, which acquired it in 2012. Although Flagship is a very traditional processor in many ways, it stands out from the pack in that it offers month-to-month billing with no long-term contract (or early termination fee) as a standard feature. Beware, however, that there are indications that this feature doesn’t apply to everyone. If you accept a “free” credit card terminal with your account rather than buying one outright, you may get stuck with a three-year contract.

Another notable feature of Flagship is that it’s willing to negotiate when it comes to setting processing rates and account fees for your account. The company’s sales agents will, in most cases, agree to lower overall prices – but only if you ask for them. Unfortunately, Flagship and other providers know that most merchants — particularly first-time business owners — won’t take advantage of this feature because they won’t be aware that it’s an option. If you receive a customized quote for your business from a provider that doesn’t advertise a fixed pricing schedule on its website, we recommend that you always try to negotiate a better deal. While you probably won’t get everything you ask for, you usually will get some concessions that can save you a lot of money.

Overall, Flagship scores a mediocre 3 out of 5 stars, and we don’t recommend the company unless you’re at least a mid-sized business and are comfortable with negotiating aggressively on your own behalf. Small business owners (and those wishing to avoid the wheeling-and-dealing altogether) should check out our Merchant Account Comparison Chart for a look at some of the more transparent providers in the industry.

Flagship Credit Card Processing & Services

Flagship Merchant Services covers all the bases with products and services to support retail, mobile, and eCommerce businesses. However, the Flagship website provides only a cursory overview of what is available. Here’s what you’ll find:

• Merchant Accounts: Flagship is not a direct processor. As an iPayment reseller, Flagship’s merchant accounts are underwritten by Fiserv (formerly First Data).
• Credit Card Terminals: For retail merchants, Flagship offers one “free” credit card terminal as part of your initial account setup. While you won’t have an expensive terminal lease, be assured that a portion of your monthly account fees are going toward insuring this terminal and keeping it updated. You may also have to accept a long-term contract instead of month-to-month billing to get this equipment. Although Flaghship’s website continues to feature the Verifone VX 520 terminal, this model has recently been discontinued by Verifone and is no longer supported. Contact sales for the latest information on available terminals. You can also check out our article, The Best Credit Card Machines & Terminals For Small Business, for more recommendations.
• Point-Of-Sale (POS) Systems & Smart Terminals: Flagship offers the complete line of Clover POS systems and terminals, including the popular Clover Mini smart terminal. While these are all excellent products, they require a monthly software subscription fee on top of the price of the equipment, and cannot be reprogrammed to work outside of the Fiserv processing network.

• Payment Gateway/Virtual Terminal: For eCommerce businesses, Flagship offers both a payment gateway and a virtual terminal, but doesn’t provide much information about either one. The company most likely continues to use the popular Authorize.Net gateway, which has a virtual terminal function built-in.
• Mobile Processing: If you need to process on the go, Flagship will set you up with iPayment’s MobilePay app and card reader. MobilePay is available for both iOS and Android smartphones and tablets and comes with an EMV-compliant card reader. While the app and card reader are free, there is a monthly fee for this service. MobilePay also includes the MobilePay Merchant Portal, an online system that offers inventory management, analytics reporting, and other features. While it’s not as fully featured as Square, it’s a nice addition to your Flagship merchant account if you need mobile capabilities. You can also choose the Clover Go for your card reader to accept EMV chip cards.
• Business Management Portal: Flagship accounts include iAccess, a cloud-based analytics and reporting tool to help you monitor your business. While this is now a standard feature with most providers, it’s nice to see that it’s included.
• Loyalty/Gift Card Program: Flagship partners with Pirq to provide loyalty programs and access to gift cards for your customers.
• Merchant Cash Advances: Like most merchant services providers, Flagship would love to loan you money for your business, which you’ll repay through a portion of the funds from your transactions. Advances of up to $150,000 are available.
• Same-Day Funding: If a steady cash flow is a critical concern for your business, Flagship offers a same-day funding feature that will get you your money faster than the usual time frame of 2-3 business days. Be aware, however, that programs like this almost always require both a monthly service fee and an additional per-transaction processing charge (typically around 1.0%).

Flagship Merchant Services Fees & Rates

Like most traditional merchant services providers, Flagship doesn’t disclose any prices on its website. Instead, you’ll have to obtain a customized quote from the company’s sales department to see what your rates are going to be. You’ll also have to review your proposed contract for more specific information about account fees.

Note that while Flagship does include a Rates & Fees page on its website, it doesn’t disclose any actual rates or fees on it. Instead, all you’ll find is some meaningless marketing fluff about how great the company is. Fortunately, Flagship has dropped its previous claim of offering “rates as low as 0.38%” — a very misleading reference to what was most likely its lowest available PIN debit processing rate. Feedback from merchants suggests that the actual rates paid by most small businesses are closer to a whopping 4% per transaction — or more.

Flagship appears to follow the popular practice among providers of using both tiered and interchange-plus pricing rate plans. However, they will almost always offer the more expensive tiered pricing option as part of their initial quote, knowing that many merchants will accept it without question. We highly recommend that you negotiate for a more affordable interchange-plus plan, and carefully compare any lower rates you’re offered against what other providers can give you.

Account fees will also vary widely from one business to the next. Based on merchant feedback, these are the most common fees you’ll have to pay:

• Monthly Account Fee: This fee varies but seems to start at around $7.95 per month.
• Monthly Minimum: Most contracts will automatically include a $25 monthly minimum. If your processing volume is low enough to be affected by this fee, you’ll want to negotiate to have the minimum lowered or even waived altogether. Likewise, seasonal merchants should ask to have it waived for the months when they’re not using their accounts.
• Gateway Fee: If you need a payment gateway, it will probably cost you around $7.95 per month.
• PCI Compliance Fee: Flagship will charge you $99 per year for security scans and other features to keep your account compliant with PCI DSS standards. While this is generally an industry-standard fee, there have been a lot of complaints from merchants about sales agents not disclosing it. Since Flagship uses month-to-month contracts, I’d rather see this as a monthly charge rather than an annual one.
• PCI Non-Compliance Fee: If you don’t take the necessary steps on your end to keep your account PCI-compliant, Flagship will charge you an additional $19.95 per month for being non-compliant. You can avoid both non-compliance and this penalty fee simply by filling out the required PCI assessment survey.

For a better idea of what you should be paying for credit card processing, check out our article, The Complete Guide to Merchant Account & Credit Card Processing Fees.

Sales & Advertising Transparency

Flagship’s website is simple and, consequently, easy to navigate. Unfortunately, it offers very limited specific information about products or services, focusing instead on vague marketing claims and name-dropping some of the suspicious websites that have given the company positive reviews. As discussed above, it has dropped the misleading “rates as low as…” claim that teased a rate that would, for most businesses, be unrealistically low. However, it’s replaced this tired sales gimmick with another one. In this case, it claims that it will give you a $200 Amex gift card if it can’t get you the lowest total processing cost. Gimmicks like this never work out in the merchant’s favor, as the processors offering them have the final word on whether you’ll qualify for that gift card. Quote comparisons can easily be manipulated by basing them on projected costs, even if your actual costs later prove to be more expensive with Flagship.

The company appears to use an in-house sales team and does not rely on independent sales agents to market its accounts. While this practice usually results in a better sales experience, that’s apparently not the case with Flagship. We found many complaints from merchants alleging that their sales representative failed to disclose important contract terms or provide a complete breakdown of the many “hidden” fees that later appeared unexpectedly on their processing statements. Although some of this can be blamed on merchants simply not reading their contracts before signing up, this issue came up frequently enough to indicate a problem with the way Flagship manages its sales team. Complaints from sales agents — many of them former Flagship employees — confirm that the company treats its sales agents very poorly and applies tremendous pressure on them to sell, sell, sell in order to earn a commission and meet their quota. Unsurprisingly, turnover is high among both sales agents and merchants.

Contract Length & Early Termination Fee

In the past, merchant accounts almost always came with a long-term contract (typically three years) and an early termination fee (ETF) that would be charged if you closed your account early. Today, competition from Square and other low-cost providers has forced the payments industry to move away from multi-year contracts and offer month-to-month billing. Following this trend, a standard contract with Flagship Merchant Services includes neither a long-term commitment nor an early cancellation penalty.

However, in an attempt to discourage merchants from closing their accounts whenever they want, Flagship and other similar providers have come up with a new trick: the “free” credit card terminal offer. Rather than having to buy a terminal or getting stuck in an expensive equipment lease, merchants can receive a “free” terminal when they sign up for an account. While this might sound like a good deal, there are several caveats that you should be aware of:

1. The offer is limited to one terminal per merchant account. If you need more than one terminal, you’ll have to either purchase the additional terminals or open multiple accounts.
2. The terminal isn’t yours to keep. Although you won’t have to pay for your equipment, the company is basically loaning it to you for as long as you maintain your merchant account. You’ll have to return it promptly if you close your account.
3. You’ll get a cheap terminal. Free terminals available through this offer invariably are the least expensive, least-capable models that the provider offers. While this may be sufficient for your needs, don’t expect to get a Clover Station POS system for free.
4. You’ll have to accept a long-term contract. This is the real kicker with “free” terminal offers. Rather than having the freedom and flexibility of month-to-month billing, you’ll have to agree to a long-term contract (typically for at least one year) — and an early termination fee if you close your account too soon.
5. You’ll still struggle to close your account. We’ve found numerous complaints from merchants alleging that Flagship made it inordinately difficult to cancel their accounts. Whether you’re on a long-term contract or month-to-month billing, you’ll have to file the appropriate paperwork and promptly return any equipment you’ve received.

Overall, we’re less than impressed with “free” terminal offers from Flagship, or any other provider. In most cases, you’ll be much better off if you simply buy your processing equipment outright and stick to a month-to-month billing plan that won’t cost you hundreds of dollars to get out of.

Customer Service & Technical Support

Flagship offers 24/7 support via telephone and email, and assigns a dedicated account manager when you open your account. While having a single point of contact for customer support can lead to a better experience when you have a problem, realize that the person assigned to your account won’t always be available. You may also be referred to Fiserv if your issue involves a transaction or account hold. As a reseller, Flagship has little control over these types of issues.

Self-help options with Flagship are, unfortunately, limited to a very basic FAQ on the company’s website. You can also refer to Clover’s website if you’re having a technical issue with your Clover terminal or POS.

We’d also note that Flagship has received many complaints from merchants regarding the poor quality of the customer support they experienced when they had to reach out to the company with a problem. While this isn’t unusual when dealing with resellers, it’s still very disappointing.

Flagship Merchant Services Reviews, Complaints, & Common Problems

Negative Reviews & Complaints

Flagship Merchant Services has been accredited by the BBB since 2015, and currently has an A+ rating. However, there are indications that the company had temporarily lost its BBB accreditation several years ago and only recently regained it. Flagships’ new profile appears to have been scrubbed, as it currently shows only 28 complaints over the last three years, down from 129 complaints in the same time period when we last updated this review. Six complaints have been filed within the last year. Flagship’s BBB profile also includes 16 customer reviews — all of which give the company a rating of 1 out of 5 stars.

In examining these complaints and similar ones posted on other consumer protection websites, the following issues occur frequently:

• Funding Holds: When a transaction is flagged as suspicious, the decision to withhold funding almost always comes from the direct processor, not a reseller like Flagship. Nonetheless, the company could do a better job of assisting its merchants in resolving these issues when they happen. After all, Flagship doesn’t get paid either when a transaction is left in limbo. We also encourage you to learn more about how to prevent account holds, freezes, and terminations from occurring in the first place.
• “Hidden” Fees: As we’ve discussed above, Flagship’s sales agents are under tremendous pressure to sell accounts, and one way to do this is to offer as little information as possible to a prospective merchant about the full schedule of fees they’ll have to pay once their account is opened. Unpleasant surprises like the PCI compliance and PCI non-compliance fees come in for particular criticism. While this kind of evasiveness is never acceptable, merchants also bear some responsibility here for failing to thoroughly review their contract documents prior to signing up for an account.
• Poor Customer Service After Sign-Up: Having your salesperson as a continuing point of contact can make for an overall excellent support experience. Unfortunately, this is not always the case. If your account representative is unavailable, you’ll end up talking to a random customer service representative who may or may not be able to resolve your issue.
• Difficulty Canceling Service: This issue comes up frequently, despite Flagship’s use of month-to-month billing. While all providers are required to maintain your account in an inactive status for up to six months to guard against a last-minute chargeback, you shouldn’t have to pay any monthly or annual fees for a service that you’re no longer using. If you’re continuing to be billed after your account is closed, contact the company immediately. You should receive a full refund promptly.

Positive Reviews & Testimonials

There’s little to be found in the way of positive feedback on Flagship Merchant Services on the web. The company’s website — which used to name-drop prominent clients such as Subway and Verizon — now only includes two very brief testimonials from users. Neither one fully identifies the business or the name of the merchant providing the testimonial, nor do they offer any specific details on what aspects of the company’s services stand out.

The website has also been scrubbed of any references to Top Ten Reviews, which previously gave Flagship glowing reviews for many years. Instead, all you’ll find is a claim that Flagship was “voted the #1 merchant account provider for eight years running.” What isn’t mentioned is that this impressive streak came to an end back in 2015. In fact, the most recent review of Flagship from Top Ten Reviews (from 2019) awarded the company just 3.5 out of 5 stars.

Final Verdict On Flagship Merchant Services

Unfortunately, there are few reasons to recommend this company to any small business owner looking for a merchant account. Flagship’s one notable feature — the lack of a long-term contract or early termination fee — is becoming increasingly common across the entire processing industry. It’s also diminished when you take into account that you’ll have to give it up if you want to take advantage of the company’s “free” terminal offer. Other Flagship products and services, while generally quite good, are readily available elsewhere. When weighed against the company’s reputation for high rates and fees, and poor customer service, we think you’ll be better served with a different provider.

Flagship ultimately scores a mediocre 3 out of 5 stars, making it neither better nor worse than the industry average. If you’d prefer to work with an above-average provider (and we’re sure that you do), take a look at our recommendations for the best credit card processing companies for small businesses. Merchants interested in the popular Clover line of products should check out the following articles for more information:

• How Much Does Clover Cost? Your Ultimate Guide To Clover Fees
• Clover VS Square: Which POS System Is Best For Your Small Business?
• Looking For Clover Credit Card Processing? Here Are The 6 Best Clover Payments Providers
• The Best Clover Alternatives & Competitors For Any & Every Type Of Small Business

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