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Host Merchant Services Review

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Host Merchant Services Review

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Date Established
Newark, DE


  • Transparent cost-plus pricing
  • Month-to-month agreement
  • No setup or application fees
  • No monthly minimums
  • Spotless track record
  • Good customer support
  • Good website & advertising


  • Expensive for low-volume merchants


Host Merchant Services is abbreviated HMS, so my brain automatically fills in “Pinafore” afterward every time I see it. If I’ve already lost you (or you’re not a fellow musical theater fan), HMS Pinafore is the famous Gilbert & Sullivan comic opera based at sea, where H.M.S. stands for “Her Majesty’s Ship” in the British Royal Navy.

The point is, I’m going to have to ask you to please tolerate any nautical/musical references in this review. I made the mistake of letting the soundtrack play in the background as I researched HMS and now I simply can’t help myself. Any other Gilbert & Sullivan fans out there? Or even Star Trek? How about Sideshow Bob of The Simpsons?

What, never? No, never? Hmmm… I’ll just crawl back into my musical-theater-nerd hole now…

HMS not Pinafore is based out of Newark, DE, with a second office in Naples, FL. They are a registered ISO of Wells Fargo Bank, and use TSYS as their primary backend processor. Host Merchant Services CEO, Lou Honick, founded a web hosting company called in 1997, which he sold to a private equity firm in 2008.

In 2009, Honick launched Host Merchant Services, aiming to leverage his strong technical background, focus on customized solutions, and a “service first” value proposition to effect positive change in the payment processing industry. Not surprisingly, many of HMS’s merchants are other web hosting companies and cloud service providers, and HMS also incentivizes these clients to recommend Host in turn.

Two main points stand out for Host Merchant Services as a merchant account provider. The first is that they only offer interchange-plus pricing and will readily admit if their rate structure won’t work the best for your business (perhaps if you are a very low-volume, mobile business).

The second is that they have virtually no complaints at the BBB and other consumer review sites. This directly corroborates their “service first” story. Positive testimonies are readily available, and although HMS’s client list could be seen as short (around 6,000), the lack of negative response is not because they aren’t actually out there serving any customers. So even if you’re low-volume, you’ll likely receive great customer service with HMS. That can be a huge deal.

I originally garnered the most of the details on Host’s rates and fees directly from Lou Honick. Yes, that’s right–the actual Captain of the Pinafore himself (not to be confused with the Very Model of A Modern Major-General–different nautical-themed Gilbert & Sullivan musical). Since the last update of this review, however, the Captain and his crew have added pricing specifics to the HMS website. I’ll definitely give them three cheers and one cheer more for that!

To check out their rates and fees, as well as explore other important aspects of HMS, I invite you to come aboard the ship for the rest of this review. Shall we shove off and head to sea?

Get Started with Host Merchant Services

Products & Services:

  • Merchant Account: HMS offers traditional merchant accounts with interchange-plus pricing for both eCommerce and in-person businesses. In addition, HMS sets up specialized accounts with customized pricing for large and small ticket businesses, non-profits (HMS Gives), and high-risk industries. Offshore accounts are also possible through their international acquiring partners. Information on each of these scenarios can be found under the “Programs” tab on the website, but I’d recommend talking to HMS directly if you think your business qualifies.
  • Virtual Terminal and Payment Gateway: Transaction Express is the combined virtual terminal and integrated in-house gateway offered by HMS. Along with the tokenization and encryption of customer data we expect from these services, Transaction Express supports check imaging, ACH services/recurring billing, wireless processing, batch processing, and multi-location networking. HMS also resells the and NMI gateways and supports most other third-party gateways.
  • Shopping Cart Integration: HMS offers to help you find a shopping cart that fits your specifications, and then will provide support in ensuring it runs smoothly.
  • Credit Card Terminals: If you’re a brick-and-mortar operation, HMS will hook you up with up-to-date terminals. You may qualify for at least one free EMV card terminal upon sign-up if you process over $20K per month, or you can negotiate a good deal on the purchase of terminals through HMS if you process lower volumes. Various Equinox and Verifone terminals are discussed in their Terminal Articles section. HMS will also reprogram your existing terminals at no extra cost, and they are philosophically against terminal leases.
  • Mobile Processing: HMS promotes an app called ProcessNow from TSYS. Regardless of monthly volume, most mobile merchants will also qualify for a free magstripe reader to use in conjunction with this app.
  • Point Of Sale Packages: Retail businesses and restaurants may be interested in Host’s POS solution called Bonsai. Developed by the hardy crew of HMS, Bonsai is particularly well-suited to the hospitality industry. It was designed to compete with upmarket POS systems, incorporating a high degree of support, customization, and automation at a lower cost. You can check out their POS page to see the types of packages available, but this section of the HMS website is slated for an update that will include pricing details.
  • Gift Card & Loyalty Cards: HMS offers to customize a system for you to accept one or both types of cards.
  • Web Hosting: An homage to Captain Honick’s roots in the web hosting industry, a merchant account with HMS includes a free basic website and business email. You’ll pay extra for additional “premium” features, which are touched on in the Business Tools section.
  • Partnering / Referral Program: If you are happy processing payments with HMS and are looking to sweeten the deal, you can refer your own business-owning clients to HMS. You essentially become a reseller for HMS merchant accounts to your end customers, and HMS handles the application and approval process. Here is a list of some of HMS’s partners, many of them web and cloud hosting companies, and an example of what you get in return.
  • Merchant Cash Advance: Does this one one seem a bit random? As Captain Honick is all about forming business-to-business partnerships, it’s actually not too surprising that HMS would offer to match you with a cash advance or alternate financing options for your business. Make sure you fully understand what you’re getting into with a merchant cash advance, as well as take the time to carefully compare options and consider alternatives before jumping on this.
  • PCI Compliance/Data Security: HMS partners with Trustwave for PCI compliance and includes $100K of data breach insurance with merchant accounts.  

Fees & Rates:

HMS offers interchange-plus pricing to all clients, and rates are guaranteed for the life of your merchant account. Since our last update, they’ve added a pricing page to their site, as well as gateway pricing packages. Huzzah!

While the published rates are for businesses processing over $10K per month, there are no monthly minimums with HMS. According to this explanation page, HMS will customize a rate package for lower volume accounts. Based on my previous conversations with the Captain, you can expect around 0.50%-0.55% + $0.10 as a starting point for volumes under $10K. By the same token, the published rates for over $10K are a baseline. Higher volume businesses will certainly have flexibility to negotiable.

Processing Rates:

  • Retail: 0.25% + $0.10
  • Restaurant: 0.20% + $0.09
  • e-Commerce: 0.35% + $0.10


  • Application/Setup: $0
  • Annual 1099 Reporting Fee: $24
  • Monthly Fee: $14.99
  • Voice Authorization: $0.75
  • Batch Processing: $0.20
  • Chargebacks: $15
  • Retrievals: $20
  • PIN Debit / EBT per item: $0
  • Address Verification Service (AVS): $0

Featured Gateways:

  • Transaction Express: $5 (basic), $10 (full-featured), one-time $10 setup
  • Authorize.Net: $9/mo + $0.05/transaction
  • NMI: $7/mo + $0.06/transaction (basic), $10/mo + $0.08/transaction (bundled)

While we’d rather see no annual fee and perhaps a lower monthly fee, the rates themselves are fair and stand up well to some of our preferred providers. You’ll note that rates for restaurants are lower than for retail. This is due to the generally lower risk/higher volume nature of the food business. Additionally, HMS is looking to specifically attract restaurant owners to their customized POS system.

Get Started with Host Merchant Services

Contract Length & Early Termination Fee:

There are no long-term contracts or early termination fees with HMS. Your merchant agreement comes with an attached waiver of any cancellation fees, so keep your eyes peeled for this. In the Partnership FAQ, they also guarantee to pay up to $250 in owed early termination fees for referred clients, and $500 if that referral client processes over $50K per month. Perhaps this deal only applies in a referral situation, but if you’re considering HMS and are facing an early termination fee with another provider, it certainly doesn’t hurt to ask!

Sales & Advertising Transparency:

A glowing record of positive reviews and virtually no online complaints continue to support Host’s reputation as an honest company that hardly ever sinks at sea. All my interactions with HMS, and particularly with the Captain, have been refreshingly forthright and helpful. As of the last update, my only remaining transparency concern was that they did not publish their rates. Happily, HMS has now officially joined the ranks of merchant account providers who publicize processing rates on their websites.

I know HMS wrestled with this with this issue internally, and it’s tough when a big part of your value proposition is never to “lead with rates.”  But in an industry where the lack of advertised pricing often indicates a dishonest or tricky company, I think they’ve made the right decision to create a dedicated pricing page. It’s straightforward and easy to find, which I also greatly appreciate. The rates themselves are fair, so there was really never anything for these HMS sailors to be shy about in the first place.

The addition of pricing details was part of a recent revamp of the entire HMS website. As often happens in these overhauls, some lingering inconstancies in language have yet to be cleaned up. For example, I’ve found the phrases “no annual fee” and “low annual fee” in separate spots, while also finding an “Annual 1099 reporting fee” of $24 on their pricing page. In this case, I believe the fee is passed through from TSYS at no profit to HMS, so you can see how different people working on the website at different times might present that differently.

I only mention this issue because, despite some bits of conflicting or outdated information, I don’t think HMS is trying to be misleading. I think they just need to inspect the rigging one more time to ensure everything is ship-shape.

Customer Service & Technical Support:

Since I already fantasized pictured the crew of HMS as sober men and true in sailor suits, it wasn’t a surprise to learn that they “stand to their guns, to their guns all day,” seven days a week, 365 days a year for tech support. “Service first” is a company motto, and regular office hours are Monday-Friday 8am-6pm EST for help with your account. A live-chat feature was also recently added. After hours you may be passed to TSYS tech support or another third-party company associated with your account, but HMS reviews and personally follows up on all of these conversations.

I was shown directly to the Captain’s quarters when I called the first time, but by then I had exposed myself as a reviewer. I’m a pretty bad liar so I didn’t even attempt to pass myself off as a merchant over the phone, but I tested the helpline a second time off-hours and got through to live TSYS tech support quite easily. In the process, I also left a generic non-reviewer message for HMS customer service and was called back by none other than Captain Honick’s first mate, the COO. I admit I was feeling pretty darn special by then. Of course, there is no guarantee you’ll always reach the C suite when you call, but it’s quite encouraging to know they are more than willing to chat.

Other support literature on the website is a combination of older articles and a more current blog focusing on industry news and topics of interest to card processing merchants. This content is frequently linked on the HMS Twitter and Facebook pages.

HMS also advertises local, on-site troubleshooting for malfunctioning terminals. The range of this service is not advertised, but the Captain tells me it’s typically around a 150-mile radius from their offices in Newark and Naples. I suspect a large portion of businesses with HMS-installed hardware are in New England or Florida and can benefit from this local touch, which subsequently contributes to the high customer satisfaction rate.

Negative Reviews & Complaints:

HMS has been accredited with the BBB since March 2011, with an A+ rating and zero complaints in the last 12 months. I checked back about 17 times, just to be sure. And while I’m at least average at Googling stuff, I can’t find much else against them out there.  As I mentioned, this is not because they “stick close to their desks and never go to sea”–they do have clients. Happy ones, apparently! The closest thing I found to a complaint was a three-star review at Consumer Affairs from a customer who is not happy with a credit card terminal. The second half of the review is actually pretty positive!

Positive Reviews & Testimonials:

The HMS website is sprinkled with a handful of positive comments from merchants. Whether or not they were directly solicited by HMS, the testimonials ring true. They are from local business owners (i.e. Florida and Delaware) that seem quite representative of the HMS client base. They also give specific details about their experiences with HMS, instead of just generically touting the ability to process credit cards. Here are two of them:

“In the restaurant industry, cost savings are very important.  Host Merchant Services saves our restaurant a significant amount of money each and every month. They also make sure we can always process and our credit card processing is never down.  Host has us set up with brand new high-speed terminals that also have a back-up dial-up connection to prevent any service interruption. Host Merchant Services provided the terminals free-of-charge and they also provided a wireless terminal at no cost. We use the wireless terminal for outside special events and in the restaurant during peak times.  For keyed-in credit card sales and to ensure PCI compliance Host Merchant Services now has our restaurant set up on transaction express – it has been a big help.” –Ryan German, Caffe Gelato Restaurant and Catering

“Host Merchant Services has been a very valuable partner for our business. They allowed us to easily get setup to accept credit cards and provided secure and simple online tools to process payments.  Anytime we have a question or need support, there is always someone friendly and knowledgeable available.  My previous experiences with other processors were not good, so I had no idea it could be this easy to work with a merchant services company. Before we found Host Merchant Services, we were about to sign an expensive terminal lease with another provider.  Luckily we spoke with Christine and she saved us from getting into a really bad long term deal.  Within 24 hours of completing the application, Grand Wood Working was processing its first payment through HMS.  Accepting credit cards has really improved cash flow for our business and we were shocked at how little it actually cost.  We recommend Host Merchant Services to all the contractors we work with.” -Neil Heuer, Grand Wood Working

With the testimonials hidden a bit below deck on the HMS site, the best place to locate evidence that the Captain commands a right good crew is at Consumer Affairs. Here, we find a growing list of close to 50 testimonials and an overall rating of 5 stars. Again, merchants have left detailed feedback and several of them have been with HMS for many years. Competitive rates, attentive tech support, and no long-term contracts are among the most common accolades.

Final Verdict:

I’ve done a fair amount of fantasizing about sailor suits and light opera in this review, and you’ve either been very patient with me, or you’ll curse me later when you can’t get those catchy Gilbert & Sullivan tunes out of your head. But allow me to complete my HMS mental picture now that I’ve finished my research.

Besides via referrals from happy customers, HMS gains most of its clients by reaching out directly to local brick-and-mortar companies, or by tapping into Captain Honick’s rich network of web-based-business connections. HMS is thus able to effectively close those sales by customizing a suite of products and services for each client, and by explaining their inherently fair system of interchange-plus pricing. Then they enhance client loyalty with attentive customer service and secondary partnerships. They must do a good job at this and have a great reputation to prove it.

With the addition of rate and fee specifics on the website, I can now confidently give four stars and one star more for the hardy Captain of the Pinafore. I’d like to think that reading the previous iteration of this review was the final push that made them put up a pricing page. Maybe that’s just a continuation of my little HMS fantasy, but regardless, we now have further proof that this company takes transparency very seriously. I’m glad to see they’ve adapted to the ever-increasing demand for clearly advertised rates in the merchant account industry.

I heartily recommend checking out HMS, especially if you are based in Delaware or Florida, or run a web hosting or cloud service provider business. Give Lou Honick and his crew a call and see what HMS can do for you. Hopefully, he won’t mind you calling him Captain.

Get Started with Host Merchant Services

Rose Holman

Rose Holman

Rose Holman is a writer, blogger, and educator from Portland, OR with an MA in Teaching from Western Oregon University. She enjoys educating SMB owners about the complicated (and notoriously sketchy) world of payment processing. Since starting at Merchant Maverick in 2016, she has also added eCommerce software to her areas of expertise.
Rose Holman
Rose Holman

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