Merchants’ Choice Payment Solutions Review

Pros

• Cost-plus pricing possible
• Low monthly fee possible

Cons

• Deceptive sales tactics
• No pricing disclosed online
• Early termination fee
• Expensive for low-volume merchants
• Numerous public compliants

Merchants' Choice Payment Solutions Overview

Founded in Texas in 1989, Merchants’ Choice Payment Solutions (a.k.a. MCPS or Merchants’ Choice) has to be one of the older merchant service providers I’ve reviewed. Did we even have credit cards back in 1989? Oh, I’m just being dramatic. Of course we did! We stored them securely in our fanny packs.

Nearly three decades later, Merchants’ Choice serves over 60,000 merchants, while also partnering with 1,000 financial institutions who resell MCPS’s services to small business owners. The company processes approximately $15 billion in card volume annually. In the summer of 2017, MCPS was acquired by Paysafe Group, a UK-based entity looking to expand its reach in the US. With a wide network of independent sales organizations (ISOs), independent agents, and partners, MCPS apparently fit the bill.

The Merchants’ Choice Payment Solutions website isn’t much to look at (and definitely needs a cheesy stock photo intervention). Paysafe may help refine MCPS’s image over time, or perhaps the Merchants’ Choice brand will be absorbed into the parent company. CEO Tom Linden remained on as head of MCPS following the acquisition, but he now lists “CEO of Paysafe Processing North America” as his job title on LinkedIn. Spoiler alert?

Perusing the sparse main website, you may find yourself wondering why 60,000 merchants would actually “choose” Merchants’ Choice over the competition? I’m guessing MCPS-proper has mostly focused on behind-the-scenes technology and operations, while their ISOs and partner banks handle the hard selling. A core feature of MCPS is Merchant Foundry, their proprietary business management platform. It’s used by small business owners to manage their own accounts, but also by ISOs to manage their portfolios of merchants. (I like to call this merchant account “Inception.”)

Here’s the real question you’re likely asking at this point: Why did MCPS earn a mere two stars? A key factor in the sub-standard rating is the repeated accusation that MCPS has employed a deceptive sales technique called “slamming.” In the first stage of slamming, sales reps vaguely imply they represent the merchant’s current processor when calling. Merchants are told in these calls that they need equipment updates to stay compliant. Then, in the process of getting new equipment, the merchants sign up for new contracts with MCPS, which include large early termination fees. We’ll get into all the “merchant said, MCPS said” of this accusation later. In short, I believe Merchants’ Choice Payment Solutions has handled the whole situation poorly.

Knowing all this, is Merchants’ Choice still worth a look? Paysafe obviously thought there was something worthwhile here. Come along for the rest of the review to find out—fanny packs sold separately.

Products & Services

In spite of its name, remember that Merchants’ Choice is not only geared toward serving merchants. Many of MCPS’s products are designed to attract more ISOs and banks to sell accounts on MCPS’s behalf. I’ll mainly focus on the merchant-centric features here.

You should also be aware that Merchants’ Choice is affiliated with multiple websites. Aside from the main mcpscorp.com, we spot the MCPS logo at merchantschoiceonline.com, mcpsfl.com, mcspcorp.net, mechantschoicellc.com, and more. I’m not sure which sites are part of MCPS-proper, which are maintained by independent sales organizations, and which are just plain obsolete. Although these alternate sites are more cluttered with information, they also provide interesting insight into the company.

Merchant Accounts: Merchants’ Choice Payment Solutions itself is a registered ISO of Woodforest National Bank based in Houston, so you may see this bank’s name on your merchant agreement or processing statement. In talking with tech support, it sounds like there are several processing platforms used, with TSYS and First Data among the most common.

Business Management Software: Merchant Foundry is cloud-based software developed by MCPS. You can perform basic management of your merchant account inside the platform, as well as access a variety of marketing and CRM tools. In essence, it’s an online portal that allows merchants (and ISOs who resell merchant accounts) to access most of MCPS’s propriety and third-party services. Here are some examples:

• Data reporting and customer analytics though DataMiner
• Social media and online reputation tracking with Foundry Business Insights
• Cash advances and other financing through partners such as OnDeck and Kabbage
• Data risk liability insurance through BIZLock
• Virtual gift cards though Yiftee

POS Systems: Foundry POS is an Android-tablet application for small to medium-sized restaurant and retail businesses. It comes outfitted with a cash drawer and receipt printer and can be integrated with other third-party payment devices. You can check out the dedicated help page (with lots of screenshots) to get a better idea of the features. Tech support informed me that MCPS also sells the Poynt and Clover POS systems.

Card Terminals: The main website doesn’t highlight any hardware aside from the Foundry POS system, but most of the alternate websites advertise a selection of card terminals. Tech support mentioned Verifone, Ingenico, and First Data terminals. No pricing information is included, and it’s possible you’d be offered a “free” terminal upon sign up. I’ve also seen references to leasing, but we recommend you avoid leasing this type of equipment if at all possible.

eCommerce: The main site includes a couple passing mentions of eCommerce. One of the alternate websites says MCPS is an authorized agent for the major gateways, and recommends eProcessing Network, Authorize.Net or Plug’n Pay. I’ve also seen older references to a proprietary gateway called Zoomgate, which tech support confirmed is still in operation.

Mobile Processing: I found even fewer mobile processing references than eCommerce references, but tech support came through for me again. SwipeSimple and Apriva are two supported mobile apps, and I’m guessing there are more.

Fees & Rates

MCPS does not publish any rate or fee information online. I obtained an informal quote from the customer service department, assuming a processing volume of around $10,000 per month, which I’ve included below. I got a strong impression that everything is very negotiable, so you can treat the list as simply a guideline on how their pricing is structured. In other words, take the precise figures with a grain of salt.

You’ll note that both interchange-plus and tiered pricing models are offered. It’s always a good idea to obtain an interchange-plus quote since this is the most transparent pricing model. My representative actually opened the conversation with interchange-plus rates, which was encouraging. We didn’t get into eCommerce and gateway pricing until later in our call, so I’d assume the rates quoted were for card-present transactions.

Interchange-Plus Rates (MCPS Markup)

• 0.15% + $0.10

Tiered Rates

• Qualified debit: 1.39% + $0.10
• Qualified credit: 1.59-1.69% + $0.10
• Mid-qualifed credit: 2.55% + $0.10
• Non-qualified credit: 2.95% +$0.10

Fees

• Monthly service fee: $5/mo.
• Merchant Foundry fee: $8/mo.
• PCI compliance fee: $6.95/mo.
• PCI non-compliance fee (only if applicable): $16.95/mo.
• Monthly minimum fee: $25/mo.
• Third-party gateway: $59 setup fee + $19.95/mo. + $0.10/transaction
• Proprietary gateway (Zoomgate): $59 setup fee + $10/mo. + $0.10/transaction
• AVS fee: $0.10/transaction
• Chargebacks: $25

A few reflections on MCPS pricing:

• Those interchange-plus rates look very competitive. You’ll just need to factor in all other fees involved in order to determine your effective markup and compare the deal more accurately with other providers. For example, those baseline monthly fees could add up to at least $20/month fairly quickly, even before you do any processing.
• If you process low- or mid-volume and are worried about the monthly minimum processing fee of $25, the rep mentioned lowering this to $15 if I signed up for their free terminal program. I’m guessing there are other catches to this, such as signing up for a long-term contract, so be careful.
• No account setup fees were mentioned, but the company has referenced these fees in past compliant responses—anywhere from $49 to $95. Hopefully, setup fees have been phased out, but be sure to ask.
• MCPS has also referenced an annual fee of $79 or $89 in complaint responses. These may have been annual PCI compliance fees, but it looks like they’re charging that fee monthly now. Again, you’ll want to ask about annual fees to be sure.

Contract Length & Early Termination Fee

The standard MCPS contract is a three-year term, which is automatically renewed for subsequent three-year terms unless canceled in writing 30 days before the renewal comes due. Canceling mid-contract will land you a $495 early termination fee, or liquidated damages, whichever amount is greater. Apparently, there is a 45-day grace period following your initial sign-up during which you wouldn’t be charged that hefty ETF. There’s debate regarding how often that grace period is actually honored. Regardless, don’t count on any refunds of processing, setup, or monthly fees.

Interestingly, my customer service rep said they could waive the ETF and give me a month-to-month contract if I wanted that. (Yes, I most definitely want that!). We didn’t get into how this might affect my rates or my account overall, but I was very pleased to hear it was possible. I was also surprised, since Merchants’ Choice insists in an official statement to the Better Business Bureau that their ETF of nearly $500 is “standard for the industry.” All I can muster in agreement is that, yes, this is a standard horrible deal from the type of companies we consistently award bad reviews.

So how can MCPS still get away with this, even just part of the time? If we start by assuming the contract length and ETF are clearly disclosed at signing (which can be a big assumption), there are still several ways a sales rep could try to justify the fee. Sometimes it’s the lure of lower processing rates, while other times it’s “free” equipment or upgrades as part the of the deal. In the case of Merchants’ Choice, we know free equipment is offered at sign-up on a regular basis. MCPS knows they’ll get their money’s worth in other fees over the course of three years, or else the ETF can cover a “free” terminal if the merchant cancels early.

The takeaway message is this: Don’t get locked into a long-term contract with a big ETF, regardless of what you’re promised in return. Additionally, watch out for third-party terminal leases, which MCPS has admitted to offering on occasion. These are typically two to four years and non-cancellable, and you could end up paying thousands of dollars for a terminal that’s worth a couple hundred.

Sales & Advertising Transparency

My first impression of a merchant account provider’s transparency typically hits me when I look for pricing details online. Unfortunately, no pricing is disclosed at the MCPS website(s), except for hints at a tiered structure. On a positive note, I appreciated that they were willing to give me fairly thorough pricing details over the phone without seeing my (non-existent) processing statement. And, although I wouldn’t be inclined to sign up for tiered pricing, the higher mid and non-qualified rates were disclosed immediately, without me specifically asking for them.

It’s regrettable that any transparency points in MCPS’s favor are heavily overshadowed by the whole “slamming” accusation. You’ll read more about this later in the Complaints section, but we need to address it here as well because it’s a transparency issue. Remember, the accusation is that MCPS calls merchants vaguely posing as their current provider, and then “tricks” them into signing a new contract with MCPS in the processes.

At 800notes.com, several people have complained about repeated robo-calls from an ISO of MCPS called “Merchant Services Partners” or just “Merchant Services.” Some have even transcribed the call. Here are two examples:

“This is an automated call about your merchant account from Merchant Services Partners to remind you that the deadline for EMV updates has now passed. Because you have already been notified, please be advised that the fraud liability has now shifted to you, the merchant.  If you haven’t obtained the proper equipment or made the necessary updates, please call us at 800 816 4793 to avoid high out-of-pocket equipment costs and/or a possible increase in processing rates charged per card.”

“This is Merchant Services Partners with a notification regarding possible pending or outstanding actions needed on your merchant account. Please call for final chip card validation on your processing equipment, and possible rate and fee increases from your sales office. Please call 800-755-8108 to speak with an agent for a rate adjustment and to validate your processing equipment’s EMV status.“

Wowzers. Where do I start? First of all, reading those transcripts makes me viscerally angry. While Merchant Services Partners technically never says, “We are your current processor,” it’s plainly obvious they have purposefully left this open to interpretation. With tricky wording and a super-generic company name, there is plenty of room for misunderstanding. As several business owners have pointed out, many banks call their merchant account divisions “Merchant Services,” so it’s no wonder the call recipient could be confused.

Secondly, the EMV liability shift has nothing to do with processing rate increases. I’m calling this what it is: a lie to scare you. This leads to my biggest problem with the overall tactic used here, which is that it preys on merchants’ fears. In my own day-to-day life, I’m constantly fielding automated calls telling me my computer has a virus or that the IRS is after me. Like MCPS, they start off implying that they know something about my current situation. They use the frightening language of passed deadlines and final notices, just like MCPS.

This flavor of scam solicitation aims to scare me into action, and that’s no different than a merchant service provider telling a business owner s/he needs to urgently update something to stay compliant, or else really bad things might happen. If this is not a scam operation, it should stop its uncanny impression of one.

There may be a small bright side to the slamming debacle, believe it or not. Because the vast majority of complaints are about this one issue, I would guess that MCPS actually does a decent job when the slamming isn’t happening. Beyond this problem, we only see a few scattered complaints about other common issues in this industry, such as hidden fees or unexpectedly high rates. Maybe it really is just one or two problem ISOs engaging in the slamming process and the rest of the operation functions above board.

Still, I have a huge problem with the way Merchants’ Choice has handled this one obviously chronic issue over the years. They’ve never admitted to a significant failure in their operation somewhere along the line. Their defenses tend to be wound up in semantics and technicalities. When coming close to any admission of guilt, they shift blame over to this ISO. All of this has been going on for years, so why on Earth hasn’t MCPS cut this rogue ISO loose already?

All in all, I’m disappointed in MCPS’s transparency, and perhaps even more disappointed in the company’s response to accusations of non-transparent tactics.

Customer Service & Technical Support

The outlook for Merchants’ Choice Payment Solutions is a bit brighter in this department. Customer service and technical support are covered in-house, 24 hours per day, out of offices in Arizona and Texas. I spoke with several customer service reps over the course of my research, and all were friendly and helpful. In truth, I acquired the best information for this review from the customer and technical service departments.

When I was put on hold, I was given the option to receive a callback. No hold times were excessive, the automated menu options were straight-forward, and I eventually spoke with a live person each time. Through the automated phone tree, I typically was asked to enter my merchant ID number. Since I don’t have one, I was sure I’d be cut off on the spot. Instead, my failure to punch in any numbers was rewarded with an immediate transfer to a live representative. That was pretty cool.

The main website is very sparse on customer support. In fact, it doesn’t even list a phone number or address for the company. All we get is a web contact form, and I never got a response to that.  Part of the reason for the lack of customer resources online is that most are likely provided through the Merchant Foundry platform, which is only accessed once you have an existing account. They advertise a live-chat feature within the platform that moves you to the front of the line for service (i.e., in front of random calls like mine). Another resource is the Foundry POS Help Center dedicated specifically to that POS system. This site seems quite thorough and helpful.

The alternate Merchants’ Choice websites provide a few more resources, including phone numbers, but these mostly left me confused. Some of the numbers were dead ends or led me to receptionists that didn’t immediately identify the company upon answering. I had the best luck calling one specific toll-free number from a couple of the alternate sites (1-800-327-0093).

The main thing I dislike about MCPS’s customer service is that it self-identifies as “The Bank Card Center.” It’s only after some pointed questioning that they bring up Merchants’ Choice at all. You already know I have a problem with totally generic-sounding names like this. Especially considering the controversy surrounding how Merchants’ Choice identifies itself over the phone in sales calls, this naming is lazy and irresponsible at best, and deceptive at worst.

We can also look to social media to observe how MCPS interacts with its potential and current customer base. The various locations and websites associated with MCPS show different levels of activity. MCPS appears to operate @MerchantFoundry on Twitter, and maintains a LinkedIn profile. MCPS of Florida is the most socially active branch, with its own Twitter, Facebook, and LinkedIn accounts.

Negative Reviews & Complaints

MCPS has a C+ rating at its non-accredited profile with the Better Business Bureau and has accumulated 74 complaints over the last three years (with 27 in the last 12 months). This isn’t actually a startling number of complaints for a large company. The startling part is that so many complaints are about the “slamming” claim, and that the same pattern is true on other complaint forums around the web. The defense from Merchants’ Choice Payment Solutions is copied-and-pasted in most cases, so if you’ve read one, you’ve read them all. (Take it from someone who’s read them all. You’re welcome.)

As I’ve mentioned, other issues such as hidden fees or difficulty canceling accounts do crop up occasionally, but they are so grossly outnumbered by the slamming problem that they don’t warrant too much concern. When merchants aren’t feeling duped into signing with MCPS as their new processor, they’re typically complaining of excessive telemarketing calls from “Merchant Services Partners,” that notorious ISO. Indeed, MCPS’s complaint responses almost always begin with a statement saying they work with ISOs, and specifically this one. Essentially, they wash their hands of any direct blame. Some of the sales call recipients are not even business owners, so while annoyed, they don’t fall prey to the actual “slam.”

The BBB has issued an official alert atop the MCPS profile about the pattern of slamming complaints. You’ll note that this issue apparently goes all the way back to 2013. There is also now an official rebuttal from Merchants’ Choice included directly underneath the BBB’s warning. A longer version of this already-lengthy statement is included in a complaint response from June 6, 2017.

In the shorter, more official statement, MCPS basically denies any wrong-doing. The longer complaint response is more emotionally-charged and scattered. Here’s a snippet:

Sales practices are not deceptive when accurate information is provided to complainants which they fail to read, listen to, or properly recall and on which they make incorrect assumptions.

Ouch. Things are not looking good for the merchant here. But we go on to read:

Although MCPS’ position remains that its conduct in the complaints identified by the BBB was not deceptive or misleading, upon receipt of complaints alleging similar facts, we conducted a review of our ISO solicitation procedures which included reviewing telephone calls, prerecorded messages, and incoming recordings. As a result, we implemented changes with certain ISOs, which included revisions to their greetings.

So, it looks like they’ve forced the ISOs to revise their “greetings” recently to make their true identity more clear. If so, we can only hope to see a significant drop in the number of slamming complaints from here on out.

MCPS has the right to defend itself, but I disagree with its “position” that agents were never deceptive or misleading. You saw those transcripts. Yes, merchants are ultimately responsible for what they sign, but despite any technical or legal definitions of innocence, there’s no denying MCPS or its ISOs have preyed on merchants with their sales tactics.

Positive Reviews & Testimonials

Whew, that was rough. Ready for a bit of good news? MCPS has a nice little selection of customer testimonials on the Merchant Foundry website. It’s always encouraging to see the names of actual owners and businesses included in positive reviews, giving them more believability and weight. Merchants are impressed with the marketing, analytics, competitor tracking, and brand reputation management features included in the platform. They praise the system’s ease-of-use, as well as the utility of the data in making business decisions.

It’s clear that Merchant Foundry’s features go beyond the basic reporting capability found with run-of-the-mill account management software. Along with MCPS’s broad reach across North America, I’m guessing the Merchant Foundry platform was part of MCPS’s allure when Paysafe made their acquisition. I also had a look around the interwebs for other positive reviews, but couldn’t find anything substantial.

Final Verdict

My opinion of Merchants’ Choice Payment Solutions has been completely soured by the “slamming” issue. Most importantly, I have little respect for MCPS’s response to this repeated accusation. Basically, they’ve chosen to take the low road and dig in their heels. They may be in the clear technically and legally. They can pat themselves on the back for that if they’d like, but I certainly won’t. They can also blame their ISOs ’till the cows come home, but the heart of the matter is MCPS’s own equivocal defenses. Therefore, I can’t simply chock this whole mess up to the typical pitfalls of outsourcing sales to so many ISOs and agents.

Slamming aside, the crummy default contract terms (three years with an $495 ETF) don’t help matters. And, while MCPS often offers “free” equipment upon signup, they also aren’t above peddling non-cancelable terminal leases. In other words, I could easily stamp a half star on this company and move on.

As tempting as that might be, we’d be remiss in overlooking any positives. We do have the possibility of a month-to-month plan with waived early termination fees if we specifically ask for it. We also have an interchange-plus pricing option with potentially competitive rates, in addition to seemingly-competent, 24-hours-a-day live customer service. The Merchant Foundry platform for business management is also intriguing. To round out points in MCPS’s favor, their total complaint volume isn’t astronomical for a company this size.

How many redeeming stars is all of this worth? That’s what’s up for debate. With its recent acquisition by Paysafe, I wouldn’t be surprised if big changes are on the horizon for MCPS, both on the surface and behind the scenes. We’ll watch for improvements to the main website and a cleanup of all the random, lingering ones. There are signs that slamming complaints have already slowed down a bit. Still, at this juncture, I feel I can only award Merchants’ Choice Payment Solutions two stars. I encourage you to check out some of our preferred providers to see the top end of the star scale.

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