North American Bancard Review
Processing $5,000 per month or less in card payments?
- Date Established
- Troy, MI
- Month-to-month contracts available
- EMV-compliant mobile card reader available
- Numerous misleading advertising claims
- Extensive use of independent sales agents
- Free terminal offer requires long-term contract
- Early termination fee based on liquidated damages
- Poor customer service and support
Originally founded in 1992, North American Bancard (NAB) is a merchant services provider headquartered in Troy, Michigan (a suburb of Detroit). The company has experienced steady growth over its 26 years in business, currently serving over 250,000 merchants and processing over $34 billion worth of transactions annually. Although it’s a very large company in its own right, NAB relies on First Data (see our review) and Global Payments (see our review) for credit card processing services. Everything else, including customer support and equipment, is handled by NAB or one of its subsidiaries.
As the company has grown, it’s bought out other, smaller providers along the way. Its most recent acquisition is Total Merchant Services (see our review), which it acquired in 2017. Today, North American Bancard has over 1,000 employees and more than 3,000 independent sales agents who sell the company’s services throughout the United States. Unfortunately, these independent agents are also a major source of complaints against the company. We’ve seen countless horror stories from merchants whose independent agents misled them, failed to disclose important contract terms, or outright lied to them about the terms and conditions of their merchant accounts. Independent agents are often hired with little or no sales experience, are given inadequate training, and then sent out to sink or swim with little support from the provider. Often paid on a commission-only basis, these agents suffer a high turnover rate and rarely provide merchants with any support after the sale.
NAB’s contracts can be confusing, and we encourage you to review the terms of your agreement thoroughly before signing up. The company now advertises month-to-month agreements with no early termination fee (ETF). However, it’s clear from the continuing stream of complaints that at least some merchants are still being signed up for a standard three-year contract that includes a particularly expensive ETF. It appears that merchants who accept the company’s offer of a “free” terminal will have to agree to a three-year contract, but this isn’t always the case. In any event, what they call “month-to-month billing” appears to be merely a standard contract with a waiver of the early termination fee. This waiver requires a separate, signed addendum to your contract. You’ll definitely want to keep a copy of this waiver, as we’ve seen reports of merchants who were inadvertently charged an ETF despite having an exemption.
At the same time, NAB has experienced a dramatic drop in merchant complaints within the last two years. While there are still quite a few complaints, it’s no longer an unusually high amount in relation to the number of merchants they serve. We have to attribute this decrease to the relaxed contract terms, as there don’t appear to be any other significant changes in their products, services, or pricing that would account for it.
For now, we’re awarding North American Bancard a very average rating of 3 out of 5 stars. While it’s nice to see that they’re following the industry trend of moving away from long-term contracts and dropping the early termination fee, the company still suffers from a significant lack of transparency regarding its fees and pricing structure. They’re also continuing to use several highly misleading sales gimmicks, which we’ll explain below. If you have a medium-sized or larger business and are experienced at negotiating with sales agents, you might very well be able to get a good deal with NAB. While they’re nowhere near being the best provider on the market, you’ll have more leverage to negotiate favorable contract terms and lower processing rates. Small business owners, on the other hand, should steer clear of NAB. You’ll end up overpaying for processing services and might – despite the company’s advertising claims – end up in a long-term contract with a very hefty penalty if you try to cancel. Instead, check out our Merchant Account Comparison Chart for a survey of the best 5-star providers we’ve found.
Table of Contents
Products & Services
North American Bancard offers all the standard features you would expect from a large merchant services provider. While they provide services to support eCommerce merchants, it’s clear from their advertising that their primary focus is on the retail sector. Here’s an overview of what they have to offer:
- Merchant accounts: As noted above, NAB uses both First Data (see our review) and Global Payments (see our review) as their backend processors. You’ll want to be clear as to which processor is servicing your account, as you might have to contact them in the event of a transaction processing issue. All other customer service issues will be handled by NAB.
- Credit card terminals: The company offers a variety of terminals, including models that support both EMV (chip) and NFC-based payment methods such as Apple Pay or Google Pay. These terminals are prominently advertised as being “free,” but you can rest assured that they’re not going to give you a $200+ terminal with no strings attached. At best, you’ll receive one terminal and be allowed to use it as long as you maintain your merchant account with NAB. At worst, “free” means there’s no upfront cost, but you’ll be signed up for a ridiculously expensive terminal lease. You might also have to agree to a standard three-year contract in exchange for your “free” equipment. We highly recommend that you purchase your equipment outright, either through NAB or a third party. In the latter case, you’ll need to pay a reprogramming fee to have the appropriate software load installed on your terminal.
- Mobile payments: NAB uses PayAnywhere (see our review) as their mobile processing solution, although you’ll still see some advertising for their now-discontinued Phone Swipe system on their website. PayAnywhere runs on iOS and Android smartphones and tablets, and uses a Bluetooth-enabled card reader that can accept magstripe, EMV, and NFC-based payments methods. Processing rates start at 1.69% under the Standard plan (which also includes a monthly fee) or 2.69% for the Pay-As-You-Go plan (which doesn’t have a monthly fee). Pricing for the card reader is not disclosed. Check out the PayAnywhere User Agreement for more details.
- Point-of-sale (POS) system: The company offers the PayAnywhere Storefront POS system, which includes the PayAnywhere app, a 10” tablet with a stand, and a card reader. NAB advertises this as a “free” feature on their website, but you can be guaranteed that it’s not really free. At best, you might be able to “borrow” this system at no cost for as long as you keep your merchant account open, but you’ll have to return it promptly if you close your account. You’ll also probably have to agree to a three-year contract (with a hefty early termination fee). Check the fine print on this offer very carefully before you sign up.
- Payment gateway: While North American Bancard appears to gear their services mainly toward the retail sector, they also offer some support for eCommerce merchants as well. Their proprietary payment gateway is provided by Inovio, now an NAB subsidiary. It includes all the standard features you’d expect, including online reporting, recurring billing support, multi-currency support, automated chargeback mitigation features, and security features that include both tokenization and encryption. I wasn’t impressed by their claim that their gateway features “military grade” encryption. This term is both misleading and meaningless, and they don’t elaborate on it or offer any specifics. Unfortunately, it’s part of a broad pattern of deceptive advertising and misleading claims that runs throughout NAB’s marketing efforts.
- Virtual terminal: NAB also offers the Inovio Virtual Point-of-Sale (VPOS) virtual terminal, which is web-based and won’t require any software to download or install on your computer. Transactions can be entered manually or swiped/dipped with an optional card reader.
- Reporting and analytics: Your merchant account from NAB comes with access to MyBizPerks Insights, a web-based analytics tool that can help you monitor your business. While it’s advertised as a free feature, numerous complaints from merchants indicate that it’s only free for the first 60 days after you open your account. After that, you’ll be automatically charged a monthly fee for this service.
- Merchant cash advances: NAB offers loans of up to $500,000 through Rapid Capital Funding. These kinds of loans can be very tempting, especially for a small business that’s just getting started. However, they’re not always a good deal, and sometimes can seriously harm your business. If you’re considering a cash advance, check out our article How to Get a Good Deal On a Cash Advance Loan first before signing up.
Fees & Rates
North American Bancard discloses almost no information about account fees or processing rates on their website. The one concrete number you will see is a claim that rates are “as low as 0.29%.” Although this partial rate quote (the per-transaction charge is not mentioned) is repeated in numerous places on the company’s website, you should pay no attention to it. Like many merchant account providers, NAB has a mix of tiered and interchange-plus pricing plans available, and your monthly processing volume is the most significant factor in determining which rate plan you’ll receive. Put simply, the more you process each month, the lower the rates you could qualify for. Smaller businesses that process a few thousand dollars a month will end up paying the highest rates, while only large businesses that process hundreds of thousands of dollars (or even more) a month will qualify for the lowest rate. So, you can safely assume that the 0.29% rate quoted will only be available to the largest businesses. Even then, it probably only applies to certain debit card transactions, as rates for credit cards are usually much higher. Remember that a merchant services provider is never going to charge you less than the interchange rate for any transaction, as they have to pay that portion of the processing charge to the credit card associations before they can take their markup.
I’m particularly disappointed – but not surprised – that NAB doesn’t discuss tiered or interchange-plus pricing anywhere on their website. This in itself is a good indication that the company prefers to saddle unsuspecting merchants with a tiered pricing plan, which is generally more expensive than the interchange-plus alternative. How do you know that you’re being offered a tiered plan? Look for separate rates quoted as qualified, mid-qualified, and non-qualified. Sometimes sales agents will try to fool you by only quoting the qualified rate, which is much lower than the other two. Unfortunately, most transactions these days will fall into either the mid-qualified or non-qualified tiers, and those rates will be two or even three times higher than the qualified ones. Our best recommendation is to insist on an interchange-plus pricing plan when negotiating the details of your merchant account contract. While the actual interchange rates themselves are very complicated, you’ll be able to see the markup your processor is taking for each transaction very clearly.
If you’re just using the PayAnywhere mobile payments system, you’ll be under a flat-rate pricing system that is disclosed in the FAQ of the PayAnywhere website. Pricing is as follows:
- 69% per transaction for card-present transactions
- 49% + $0.19 per transaction for card-not-present transactions
- No monthly fee ($3.99 per month inactivity fee if you don’t process any transactions for over twelve months)
- Recommended for merchants processing less than $10,000 per month
- 69% per transaction for card-present transactions
- 69% per transaction for commercial or rewards cards
- 69% + $0.19 per transaction for card-not-present transactions
- $12.95 monthly basic service fee
- $3.99 per month inactivity fee if you don’t process any transactions for over twelve months
- $79.00 per month minimum volume fee if monthly credit card sales are at or below $5,000
- Recommended for merchants processing over $10,000 per month, but less than $30,000 per month
If you process over $30,000 per month, you’ll have to contact a sales representative for a custom pricing quote.
Contract Length & Early Termination Fee
North American Bancard touts the availability of month-to-month billing with no early termination fee throughout their website. This is a fairly recent change, as they previously had an industry-standard contract with a three-year term, an automatic renewal clause for one-year periods after that, and an early termination fee (ETF). The ETF was particularly egregious, as you would essentially have to pay the monthly fees for every month remaining in your contract, with a minimum charge of $295. This is essentially a liquidated damages clause, something you want to avoid if at all possible.
Despite the advertised change in contract terms, we were able to find numerous complaints from merchants who were charged a high ETF when they tried to close their account. While these complaints have tapered off over the past year or two, they’re still coming in. NAB doesn’t disclose its contract terms, but we believe that what they’re doing is offering a waiver of the ETF to merchants who don’t take advantage of their “free” equipment offer. If you buy your own equipment or already have a compatible terminal, you can get a waiver to the ETF. If you want to have a terminal provided for your use, you’ll need to sign up for the full three years and be subject to the ETF if you close your account early.
If you do obtain a waiver to the ETF clause in your contract, be sure to keep a copy of it for your records. Providers have a way of “losing” these waivers when it comes time for you to close your account, and you’ll need it to prove that you’re not subject to the ETF. Also, don’t confuse this arrangement for true month-to-month billing. If only the ETF is waived, you’ll still be legally obligated to maintain your account for three years, even if the termination penalty has been removed. We’ve seen many complaints from merchants who continued to be charged monthly fees for months (or even years) after they had closed their accounts.
One nice unadvertised feature of NAB’s contracts is that they will generally release you from your contract with no penalty if you cancel within the first 45 days of service and return all equipment promptly. While actually taking advantage of this policy might not always go smoothly, it’s still a better proposition than most providers offer.
Unless otherwise stated in your contract, you’ll have to provide 90 days’ notice to cancel your account. This is significantly longer than most providers require, and much more than the 30 days’ notice requirement of a true month-to-month billing arrangement.
Sales & Advertising Transparency
North American Bancard actually has two websites: a main North American Bancard site for their merchant services, and a North American Bancard Holdings site that provides information about the company’s network of subsidiaries. While the latter site is not aimed at merchants, you can still find some useful information about services such as the Inovio payment gateway.
Overall, I’m not impressed with NAB’s main website. The first thing you’ll see on their home page are these three claims:
- Rates as low as 0.29%
- Free EMV and NFC equipment
- No long-term contracts
As we’ve discussed above, all three of these claims are highly misleading. The rate quote is only available to the largest businesses, and even then, it will only apply to a very small number of transactions. The “free” equipment and “no long-term” contracts claims are essentially mutually exclusive. You can have one of these features, but not both of them at the same time.
Unfortunately, the rest of the website isn’t much better. While NAB does reveal more information about their products and services, they don’t offer much in the way of specifics. They also repeat the same misleading claims found on the home page throughout the site. Remember the old adage: if it sounds too good to be true, it probably is.
Beyond the website, the sales experience at NAB has even more serious problems. As we’ve noted above, the company has over 1,000 employees, but maintains a sales force of over 3,000 independent agents. Why would a company need to have three times as many sales agents as they do employees? This fact alone suggests that they’re far more interested in selling new accounts than they are in maintaining good relationships with their existing customers. Independent agents – not just at NAB, but throughout the processing industry – have a terrible reputation for being poorly trained before being sent out to look for customers. They also receive little or no supervision from their company, meaning that dishonest or unethical sales practices are rarely corrected. Usually working on a commission-only basis, independent agents are under intense pressure to set up new accounts, and they’ll often say just about anything to get you to sign up for a merchant account. Our best advice is never to trust anything promised to you by an independent agent. Get everything in writing and insist on reviewing every word of your contract before you decide to sign up for an account.
NAB has a robust social media presence, with accounts on Facebook, Twitter, and LinkedIn. They also have a YouTube channel and several videos uploaded to Vimeo. While the Facebook and Twitter accounts mostly mirror content posted on their blog, the YouTube and Vimeo content is a little more useful. Besides the usual sales pitches, you’ll find testimonials from satisfied customers and some helpful tutorials.
Customer Service & Technical Support
NAB offers customer support through both telephone and email. They’ve also recently added a live chat feature. Telephone support is available 24/7/365, and you should receive a response to email inquiries within 24 hours. Note that they have separate phone numbers for customer support and tech support, so be sure to call the appropriate number based on the type of problem you’re experiencing.
Unfortunately, we haven’t found a lot of positive feedback regarding the quality of customer support at NAB. As with most processors, the helpfulness of the company’s customer support representatives often depends on the nature of your problem. Technical problems tend to receive much better support than angry customers complaining about an account freeze or trying to cancel their accounts.
Negative Reviews & Complaints
North American Bancard has been accredited by the BBB since 2001, and currently has an A+ rating. This might come as a bit of a surprise, given that the company has 136 complaints filed within the last three years, 30 of which were filed within the last twelve months. However, this is not an unusually high complaint volume for an organization that serves over 250,000 merchants. We’re more concerned with the fact that only 17 of those complaints were resolved to the merchant’s satisfaction. We also note that 33 out of 36 reviews left by merchants were negative. Nonetheless, NAB does appear to respond to every merchant complaint, even if their track record of resolving issues is pretty spotty.
We’d also note that this complaint volume represents a significant decrease from our previous review update, when NAB had 200 complaints filed against it. In the year before that, the complaint volume stood at 244, so there’s definitely a downward trend in BBB complaints. We attribute this decrease primarily to the recent availability of month-to-month contracts with no early termination fee. While this provision comes with strings attached, and not all merchants will be able to take advantage of it, it’s a step in the right direction and follows a trend within the processing industry to move away from unpopular long-term contracts.
We also found an additional 80 complaints on Ripoff Report, although many of them are duplicates of complaints filed with the BBB. While this represents a slight increase in complaints from our last review update (74 complaints), remember that Ripoff Report never takes down complaints. Many of these complaints date back several years, and the number of recent complaints has tapered off.
Common issues in merchant complaints include the following:
- High early termination fee: Although NAB now waives their early termination fee (ETF) for merchants who don’t need a free terminal or POS system, there are still many merchants who are liable for this fee. While some are merchants who have been with the company for many years and signed up before the waiver became available, others have been the victims of independent agents who falsely assured them that they wouldn’t have to pay an ETF. As always, we strongly advise you to review your contract documents thoroughly before signing up for an account. Never rely on the verbal assurances of a sales agent, independent or otherwise.
- Undisclosed PCI compliance fee: Most providers charge a PCI compliance fee, either as an annual fee, a monthly fee, or bundled in with your monthly account maintenance fee. Although NAB only charges $79 per year for PCI compliance (the industry average is around $99 per year), this fee has nonetheless come as an unpleasant surprise to some merchants. Again, review your contract documents and don’t rely on your agent to disclose this or any other fees. Also, be sure your provider is actually offering valuable services such as security scans or data breach insurance in exchange for this fee.
- Automatic sign-up with MyBizPerks: This additional service is advertised as being free with your merchant account, but it only means you won’t be billed for the first 60 days. After that, you’ll automatically be charged $10.00 per month unless you contact NAB to cancel it. This kind of charge is easy to miss unless you get in the habit of carefully reviewing your merchant account statement every month – which you obviously should do.
- Difficulty closing account: This complaint seems to come up with every provider that waives your early termination fee rather than putting you on a true month-to-month billing contract. Merchants think they’ve provided adequate notice and filled out all the necessary paperwork to close their accounts, only to find that they’re still being billed for monthly fees long after they’ve stopped using their account. This issue currently seems to be affecting many merchants who were customers of Total Merchant Services (see our review), which NAB acquired in 2017.
Positive Reviews & Testimonials
We found two positive reviews of NAB on their BBB profile, although neither offers any useful information. This isn’t that surprising, as the BBB and other consumer protection websites are designed specifically to collect negative information about businesses, not positive reviews.
The company’s YouTube channel and Vimeo videos also include some fairly useful testimonials from actual customers. While they’re a little scripted, they still come across as genuine. Unsurprisingly, most of the positive testimonials come from business owners in the greater Detroit area.
Overall, I’m simply not impressed by North American Bancard. While you could get a good deal on processing with them under the right conditions, the odds are that you won’t. Their underlying products and services are quite good, but most merchants will probably end up paying more than necessary to access them.
While the company’s extensive use of pricey tiered rate plans is a big strike against them, their sales and marketing tactics are their biggest weakness. Their website is littered with just about every misleading sales gimmick in the book, and their reliance on independent sales agents all but guarantees that you’ll end up with a deal that’s far less attractive than what you were expecting. With promises of unrealistically low rates that you’ll never see, free equipment that isn’t really free, and a month-to-month billing provision that you might not qualify for, NAB usually delivers a lot less than what they promise.
I’m particularly concerned with the fact that the company’s independent sales agents outnumber its actual employees by a 3:1 ratio. This fact says a lot about where NAB’s efforts are really focused (hint: it’s not on serving their current customers). It also suggests that they’re relying on a “hiring mill” strategy, where agents are brought on without regard to education or previous sales experience and then sent out with little training to try their hand at selling accounts. With this kind of poor preparation, most agents will be unsuccessful and will end up leaving the company in short order – only to be replaced by someone else with the same lack of qualifications and training.
At the same time, I’m pleased to see that NAB has dropped their expensive early termination fee (ETF), even if this offer does come with some strings attached. If you’re tempted by this feature, be sure to buy your own equipment and keep a copy of your ETF waiver. Also, don’t confuse a lack of an ETF with an actual month-to-month billing arrangement. True month-to-month billing provisions include an initial term of just one month, with the contract automatically renewed for one-month periods after that. You can cancel your contract at any time with no penalty upon giving 30 days’ notice.
Overall, North American Bancard earns a very average 3 out of 5 stars. While this may seem like a high rating for a provider with such significant problems, it’s mainly a reflection of the fact that the “industry average” in the processing business isn’t that great. If you own a large, successful business and are comfortable negotiating your own terms, you can probably get a good deal (and low processing rates) with a company like NAB. Smaller businesses with less leverage and more vulnerability to high account fees should probably steer well clear of NAB and other large providers like them. For a quick comparison of some of our best 5-star providers that are actually a good deal for small business owners, check out our Merchant Account Comparison Chart.