Wells Fargo Merchant Services Review
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- Date Established
- San Francisco, CA
Wells Fargo Merchant Services (WFMS) is a division of Wells Fargo, one of the largest and oldest banks in the United States. While the bank itself has been in business since 1852, its Merchant Services division started offering credit card processing services in 1971. The bank is headquartered in San Francisco, California, but has branches and regional offices throughout the country.
As you’ve probably heard by now, Wells Fargo hasn’t been having such a great year. In September 2016, the bank reached a $190 million settlement with the Consumer Financial Protection Bureau (CFPB) over allegations that its employees had systematically set up as many as two million unauthorized accounts in order to reach their expected sales quotas. As of this writing, approximately 5,300 bank employees have been fired and the bank’s CEO, John Stumpf, has been forced to resign.
While the majority of the fraud appears to have occurred in the bank’s consumer division, there are indications that the opening of bogus accounts also affected small businesses. About 10,000 small business accounts have been identified that might have been opened without the consumers’ knowledge. It’s not entirely clear at this time whether merchant accounts were affected, but it appears likely that they were. It’s also very apparent from the huge number of complaints from merchants regarding high-pressure sales tactics and failure to disclose important contract terms that the same cultural problems extended into the Merchant Services division.
How this will play out, and what effect it will have on the quality of Wells Fargo Merchant Services’ products and services remains to be seen. Quite frankly, it wasn’t easy to recommend them as a merchant account provider before the current controversy, and it’s even harder now. Hopefully, the company will take some positive steps to improve the quality of their services – particularly in the area of sales and marketing – as a result of this incident.
To find Wells Fargo Merchant Services on the web, you’ll have to go to the bank’s main website. Unfortunately, the section of the website devoted to merchant services is difficult to navigate and lacks important information. Products and services lack clear descriptions, and the site is riddled with so many footnotes that it feels like reading a David Foster Wallace novel.
Despite its large size, Wells Fargo isn’t a direct processor. Rather, it functions as an acquiring bank and uses First Data as its payment processor. This relationship is not disclosed at all on the website, and you’ll want to read this article to fully understand it. The bottom line for you as a merchant is that you’ll have to deal with both Wells Fargo and First Data and that many of the issues that plague First Data can crop up here as well.
Several of Wells Fargo Merchant Services’ business practices have come under heavy criticism from merchants, including a $500 early termination fee, outrageously expensive terminal leases, and enhanced billback billing. On the plus side, if you also have a bank account with Wells Fargo, your transactions should be processed and deposited into your account within 24 hours. This is a significant improvement over the usual 48 hours or more that it takes for most other providers. “Should” is the operative word here, however, as there are numerous complaints from merchants that they frequently had to wait longer than one day to get the money deposited into their Wells Fargo accounts.
Wells Fargo also relies mainly on in-house sales representatives rather than independent sales agents who work on a commission-only basis. While this normally results in a vastly improved sales experience for merchants, it’s clear from the bank’s current controversies that this hasn’t been the case. While Wells Fargo sales agents undoubtedly receive better training than independent agents usually do, there are a huge number of complaints alleging a failure on their part to disclose important contract terms (such as the length of the contract and the early termination fee).
All of this adds up to a less-than-average score when compared to other processors in the industry. For now, Wells Fargo Merchant Services only rates 2.5 out of 5 stars. Hopefully, their efforts to address the bank’s current controversies will result in an improvement in contract terms and sales practices, making them more competitive for businesses of all sizes.
Read on for a more detailed explanation of what WFMS currently offers. You should also check out our comparison chart to see the best merchant service providers around or find one that best fits your needs!
Table of Contents
Products & Services:
You’ll find just the basics at Wells Fargo Merchant Services, with nothing that really sets them apart from the pack. WFMS doesn’t aim to be a one-stop-shop for all things related to merchant services. If you’re looking for a bunch of value-added services, look elsewhere. Here’s a list of the products and services that they do offer:
- Merchant accounts: As noted above, WFMS uses First Data as their third-party processor.
- Terminal sales/leases: WFMS offers a variety of terminals, including EMV-capable devices, but doesn’t provide any specifics on their website. Leases are handled through a partnership with First Data Global Leasing. Terminal leases are not a good idea. We recommend that you buy your equipment outright and pay the re-programming fee to have it work with your merchant account.
- Mobile Processing: Leased terminals include models that support NFC-based mobile payments, such as Apple Pay, Android Pay, and others. WFMS also offers their Wells Fargo Mobile Merchant with EMV app, which is available for both iOS and Android. The app apparently uses the EMV-compliant Clover Go card reader, but the company doesn’t provide any details about this on their website.
- Payment gateway: WFMS supports eCommerce by providing integration with a number of third-party payment gateways. Choices include the ever-popular Authorize.Net, CyberSource, and First Data’s Payeezy Gateway.
- Point-of-Sale: First Data’s Clover Station is available, as well as several other Clover offerings.
In addition to these primary products, WFMS also offers check processing, online reporting, and support for recurring payments.
Fees & Rates:
Unfortunately, Wells Fargo makes absolutely no disclosures of rates or fees in their corporate advertising or internet resources. No information on rate structures (such as interchange-plus or tiered models) appears anywhere. This isn’t exactly unusual – but it’s not ideal, either. While your discount rate will depend on a large number of factors, I really like to see some disclosure of monthly fees (PCI compliance fee, statement fee, etc.) alongside information about how rates are determined, including information on interchange-plus plans.
WFMS does offer a few brief notes on pricing in their FAQ, but basically just to say, “It depends.” They also claim to offer “relationship pricing,” but only give a vague definition of what this means:
A full-service relationship with Wells Fargo translates into relationship pricing that benefits your business. Our Wells Fargo Business Services® Packages are designed specifically for your business banking needs and can save you hundreds of dollars on frequently used financial products and banking services.
Basically, they imply that if you use multiple Wells Fargo services, they can give you a discount (sort of like the cable/phone/internet companies do). They don’t make any specific claims, however.
Contract Length & Early Termination Fee:
With Wells Fargo Merchant Services, you’ll get the industry standard for contract length and early termination fees. All contracts include an initial three-year term, and then auto-renew for one-year periods thereafter. Merchants processing less than $1,000,000 per year in transactions will be charged a $500 early termination fee. Merchants processing over $1,000,000 per year will be charged both the $5000 ETF and liquidated damages equal to “six times the highest amount of Revenue in any single calendar month during the initial term or any renewal term.” (See Section 41.3 of the Wells Fargo Merchant Services Program Guide.)
Please, do not accept this. The industry standard isn’t good enough. Many service providers don’t have any cancellation fees and offer true month-to-month contracts instead.
As with many merchant account providers, Wells Fargo will “buy out” your existing contract with one of their competitors to get your business. This means they will pay all or a portion of an early termination fee from your current provider, up to $500. To qualify for this, you’ll have to be doing at least $100,000 annually in card processing (excluding pin-based debit) and meet a few other stipulations.
Sales & Advertising Transparency:
Wells Fargo Merchant Services offers very little advertising or sales copy on their website. No fees or rates are mentioned, and virtually no information on the costs of processing is included. While this isn’t great for transparency, it’s better than making a bunch of empty or misleading promises using flashy sales gimmicks.
They do use at least one sales gimmick, which I mentioned in the “Contract Length and Early Termination Fee” section above. They say “Save up to $500 when you switch to Wells Fargo Merchant Services.” This is potentially misleading, though. You won’t get a check for $500 or a credit on your future expenses. Instead, they will pay for up to $500 of your qualified switching expenses incurred while switching from your current processor to WFMS. “Qualified switching expenses” includes two things: (1) early contract and lease termination costs, and (2) non-Wells Fargo reprogramming costs required by WFMS.
You’ll also have to be processing at least $100,000 annually in Visa/Mastercard/Discover transactions, not including pin-based debit to qualify for this offer. Smaller businesses are out of luck.
On the good news side of things, they offer some useful information in their Guide to Processing Card Payments. I also like their Cost Management Strategies Guide, although they kind of bury these resources and many others in their incredibly disorganized website design.
As noted above, sales agents employed by WFMS to market their services have generated a very large volume of complaints regarding their failure to disclose important contract terms, especially the early termination fee. It’s impossible to say with certainty that this practice has been deliberately encouraged, but the current controversies swirling around Wells Fargo certainly suggest that this has indeed been the case. As always, do not rely on any verbal assurances from a sales agent, and thoroughly review all contract documents before signing any of them.
Because of its unique position as a division within a much larger organization, WFMS doesn’t have any social media presence of its own. While the main Wells Fargo bank has social media accounts on Facebook, Twitter, Google+, LinkedIn, and YouTube, you’ll only occasionally find information related to merchant services on these sites.
Customer Service & Technical Support:
WFMS offers customer service and support primarily through a telephone number that’s available 24/7. You can also contact them through their website using secure email. There is no chat support available at this time.
Unfortunately, while it’s nice to see that you can contact support at all hours, the quality of that support is not always very reliable. Poor customer service is a very common thread in merchant complaints about WFMS, and it’s definitely an area that has room for improvement. On the plus side, WFMS will assign you a relationship manager when they set up your account. Having a dedicated point of contact for customer service issues is a definite advantage – at least when you can actually contact that person.
Like many traditional merchant services providers, WFMS has essentially no knowledgebase or self-help features on their website. Educational resources are limited to a pretty basic FAQ, and that’s about it.
As a reviewer, it’s difficult for me to ascertain the quality of customer service when it comes to complex, account-specific issues. But that’s where you come in! Have you worked with Wells Fargo? Feel free to leave us your review. Don’t forget to read the user review and comment policy.
Negative Reviews & Complaints:
Wells Fargo Merchant Services doesn’t have a separate profile with the BBB, but you can find some information about them under the main Wells Fargo bank profile. Remarkably, Wells Fargo is not accredited by the BBB. They also have a C rating, with 4,575 complaints filed against them within the past three years. While probably only a small percentage of these complaints relate to merchant services, it’s impossible to even sift through them as details of the complaints are not available. What is available, however, is a rather lengthy list of government actions against Wells Fargo, including the current controversy over bogus unauthorized accounts. While none of these legal actions appear to relate to the Merchant Services division, it certainly doesn’t give you a warm fuzzy about doing business with Wells Fargo.
A search on Ripoff Reports yields 15 complaints that are actually against Wells Fargo Merchant Services. If this number seems low, it’s probably because a lot of the complaints are being filed against First Data, which is the actual processor for WFMS.
Luckily, many of our readers have chimed in with complaints down in the Comments section below, and from them, we’ve been able to identify several common issues to look out for, including the following:
- Expensive terminal leases through First Data Global Leasing: Merchants have complained about not being aware that they were signing up for a four-year terminal lease. The whole “not being aware” part can be chalked up to the merchant not fully understanding how leasing works. In almost all cases, terminal leasing is unnecessary. Even with the re-programming fees, it’s much more affordable to buy your terminals outright. They don’t cost much these days.
- Withholding of funds/termination of accounts: This can happen for a number of reasons. Chargebacks and/or suspicious charges can easily raise a red flag that will either get you suspended or shut down. Both First Data and Wells Fargo have been known to be a bit trigger-happy when it comes to holding funds or terminating accounts. You’re going to want to learn how to avoid holds and minimize chargebacks if you plan on signing up with WFMS.
- Enhanced Billback: Wells Fargo and First Data are also known for using a billing technique called enhanced billback, which isn’t the most transparent billing method, to say the least.
- Early Termination Fee: As we’ve noted above, WFMS will charge you a $500 early termination fee if you close your account before your contract term expires. That’s pretty steep, especially considering there are plenty of other providers that don’t charge an ETF at all. We’ve also seen a clear pattern of complaints alleging that Wells Fargo’s sales representatives usually don’t disclose this fee when trying to sell you an account.
- Poor Customer Service: We found many complaints alleging poor or even nonexistent customer service. I really wouldn’t expect much from such a large bureaucratic organization as Wells Fargo. While big processors don’t always have bad customer service, it seems to be a strong trend.
- Increased Fees After Sign-Up: Although Wells Fargo has a right to increase fees, it’s still a hard thing to swallow for any merchant. And judging by the number of complaints I’ve read about this matter, it seems WFMS likes to raise its rates frequently.
Positive Reviews & Testimonials:
There are no testimonials from customers on the Wells Fargo Merchant Services website. A previous version of this review found a few testimonials on YouTube, but if you search for “Wells Fargo Merchant Services” there now, you’ll mostly find complaints from customers about the bad service they received from WFMS.
Needless to say, I’d like to see WFMS put forth a little more effort to prove that their services are worthwhile to prospective clients. Without any testimonials to rely on, your best bet is to ask your sales agent for references. These should be from businesses that operate in your same industry, and they should be merchants that your agent has personally signed up. Obviously, you’ll want to check in with those references to see what their experience has actually been like after the sale.
If you’ve had a positive experience with WFMS, please tell us about it in the Comments section below.
Final Verdict on Wells Fargo Merchant Services:
SPOILER ALERT: If you’ve been reading this far, you’ve probably already guessed that I’m not going to recommend Wells Fargo Merchant Services. You would, of course, be correct. With the vast resources of Wells Fargo bank behind them, there’s no reason why WFMS can’t offer a more complete range of products and services, more competitive terms and costs, and top-notch customer service to back them up.
But they don’t. Instead, they offer a surprisingly limited array of products and services, for an above-average price. Customer service appears to be an afterthought. Overall, it’s like they’re not even trying. If they’ve been relying on name recognition in the past, it should be abundantly clear from the current controversy engulfing Wells Fargo bank that this won’t be an advantage for them going forward. While Wells Fargo was one of the relatively few big banks to emerge from the Great Recession with their reputation intact, their standing has taken a huge nosedive with the latest revelations about their sales tactics. For all of these reasons, WFMS only rates 2.5 out of 5 stars for now.
We’ll be monitoring WFMS to see if the aftermath of their parent company’s current public relations disaster leads to improvements in service. At the very least, I’d hope there are some significant improvements in how their sales representatives are trained and monitored. I’d also like to see more transparency regarding their processing rates and fees on their website. Lastly, they should follow the growing trend within the industry and eliminate their early termination fee.
If you want to deal with a big, stable bank as your payment processor, try out Chase Paymentech. They have better contract terms and a reputation for fairness. Otherwise, check out our merchant account comparison chart to see the best-rated merchant service providers in the industry.
To learn more about how we score our reviews, see our Credit Card Processor Rating Criteria.