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 it has branches and regional offices throughout the country.
Despite its large size, Wells Fargo isn’t a direct processor. Rather, it uses First Data as its back-end processor. This relationship is not disclosed at all on the website, but it exists with any payment processor that offers Clover products. 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 affect First Data merchants can crop up here as well.
As you’ve probably heard by now, Wells Fargo hasn’t had a great last few years. 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 to reach their expected sales quotas.
And that was just the beginning of the drama. Since then, the company has been charged with many other violations, including improper insurance sales practices and knowingly selling residential mortgages that contained incorrect information.
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 whether merchant accounts were affected, but it appears likely that they were.
However, one upset does involve the Merchant Services division explicitly. In 2017, several merchants filed a class action, stating that WFMS engaged in deceptive sales practices by failing to plainly disclose the three-year term agreement, early termination fees, and other monthly fees. This class action is still ongoing (you can follow its development on PacerMonitor).
While WFMS has made some significant changes to their plans and practices (eliminating the three-year contract term and early termination fee for merchants on standard pricing), I’m still hesitant to recommend the company after all of these charges. Quite frankly, Wells Fargo’s products and features are underwhelming, as are reviews of its customer service. All of this adds up to a sub-par score when compared to other processors in the industry. For now, WFMS only scores 3 out of 5 stars.
However, feel free to 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!
We've done in-depth research on each and confidently recommend them.
Table of Contents
Products & Services
To find Wells Fargo Merchant Services on the web, you’ll have to first go to the bank’s main website. WFMS is available under “Small Business” and then “Merchant Services.” Unfortunately, the section of the website devoted to merchant services is difficult to navigate and is missing important information. Products and services lack clear descriptions, and the site is riddled with asterisks and footnotes.
In terms of products and services, you’ll find just the basics at WFMS, with nothing that 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 its back-end processor.
- Terminal Sales, Rents, & Leases: WFMS offers a variety of terminals, including EMV-capable devices. I was able to request a list of products and prices from a representative I spoke with on the phone. You can purchase the hardware outright, rent it for an indefinite period, or sign up for a three- or four-year lease. Leases are handled through a partnership with First Data Global Leasing. Terminal leases are very expensive and overall a bad move for your business. We recommend that you buy your equipment outright.
- Mobile Processing: Leased terminals include models that support NFC-based mobile payments, such as Apple Pay, Google Pay, and Samsung Pay. 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 its website.
- Payment Gateway: WFMS supports ecommerce by providing integration with the very popular gateway Authorize.Net. Autorize.Net connects your online store to WFMS and also gives you support for recurring payments, online account management and reporting, and the ability to sync with Quickbooks.
- Point Of Sale: First Data’s Clover Station is available as well as several other Clover offerings.
- One To Three Day Processing: If you have arranged to deposit your funds into a Wells Fargo account, and you opened that account recently, your funds can be deposited as soon as one to three business days. The best merchant accounts usually offer deposits within 24 hours, or at most, 48 hours. Taking up to three business days is a bit ridiculous.
If you just need a basic solution to accept online and in-person payments, WFMS is workable. However, there are certainly some limitations in terms of flexibility. To access the lowest rates possible, you’ll have to stick with the card terminals and gateway that WFMS offers. While both Clover and Authorize.Net are very popular solutions, I don’t like that they are essentially the only options available.
Fees & Rates
You’ll find WFMS’s rates and fees listed on the main merchant services landing page (both at the top of the webpage and in the fine print below). Pricing follows a flat rate per-transaction model with a few additional fees. Transaction rates are divided into card-present and card-not-present rates. Take a look:
- Card-Present Transactions (tap, dip, or swipe): 2.6% + $0.15
- Card-Not-Present Transactions (online, keyed in): 3.4% + $0.15
- Monthly Fees Per Location
- $9.95 in-person
- $24.95 online
- Non-Wells Fargo Deposit Account Fee (charged if your merchant account is not settled with a Wells Fargo bank account)
- $5 per location
- Chargeback Fee: $25
WFMS follows a flat-rate pricing model, which is most likely to benefit low-volume merchants. Many mid and high volume merchants will find that this flat rate is higher than the rates interchange-plus pricing could offer them.
That said, WFMS states that custom pricing and rates for B2B businesses are also available. We tend to prefer interchange-plus pricing models since they are the most transparent pricing models in the payment processing industry. I recommend that when you contact WFMS, you work to negotiate an interchange-plus (also called cost-plus) pricing model.
You should know, however, that there is one significant disadvantage to signing up for custom or B2B pricing: WFMS will very likely require you to agree to a three-year term. More on this in our Contract Length & Early Termination Fee section below. (Need help negotiating? Download our Beginner’s Guide to Payment Processing to learn how to go about it.)
I’m not too fond of the way WFMS chooses to present pricing information. Although they display some of this pricing information on their webpage, a significant amount of information is buried in the footnotes at the bottom of the page.
For example, I learned from WFMS’s fine print that your card-present rates can be impacted by the equipment and gateway you use. The footnote states: “If you accept payments using equipment or a gateway that you did not receive from Wells Fargo, the online or keyed rates and fees will apply to tap, dip, and swipe transactions.” Those card-not-present rates are significantly more expensive than the card-present rates. If you aren’t okay with using only Wells Fargo’s equipment and gateway, you’re better off looking somewhere else.
Also, I’ve seen some mention of PCI compliance fees, although I couldn’t get any more information on these fees from the WFMS website. When I called in to ask, I was told that PCI compliance fees may exist for some merchants, and the actual cost of the fees depends on the pricing package that the merchant negotiates with WFMS.
Contract Length & Early Termination Fee
In the past, WFMS has followed the industry standard of signing new merchants on to a three-year agreement that included an early termination fee. Many merchants who are still with WFMS are still on a contract with these terms. However, more recently, WFMS has adjusted its terms and conditions.
In many cases, WFMS no longer requires a three-year contract or an early termination fee. If you are a merchant signed up with the standard (flat-rate) pricing model, you will be free to leave WFMS at any time with written notice. They will not charge you a fee for canceling.
However, merchants with a custom pricing model and B2B sellers will still be required to sign a three-year contract. I was told by a representative over the phone that while all merchants with custom pricing will have a three-year contract, they will only be charged an early termination fee if they process over $1 million annually (and, of course, if they cancel their agreement within the first three years). In this case, the early termination fee can cost up to $500.
Wells Fargo also has a separate Terms of Service document for their Wells Fargo Mobile Merchant EMV application. You are free to cancel this service at any time, provided that you submit written notice of your cancellation 30 days in advance.
Finally, WFMS offers credit card terminals and other hardware. Although you’re free to purchase this equipment outright (or rent it for an indefinite amount of time) WFMS also advertises 36 and 48-month leases. We do not recommend leasing equipment under any conditions. Leases can be tricky (or even impossible) to get out of, and the cost of leasing equipment over three or four years can result in you spending many times the actual value of the hardware.
For example, you can purchase the Clover Flex (read our review) outright from WFMS for $449. Or, you can lease it for 36 months at a rate of $34.96/month, resulting in a total cost of $1,259 over three years!
Always purchase your equipment outright or rent if you just need it for a few months. Don’t get locked into an expensive lease agreement!
Sales & Advertising Transparency
Wells Fargo Merchant Services offers very little advertising or sales copy on its website. To uncover all the information you need, you have to do your due diligence reading ALL the fine print at the bottom of the web pages and reading all the information available in the FAQs. In some cases, I had to call WFMS to get the information I needed.
Although I’m happy to see that WFMS is now listing some basic pricing information online, WFMS still has a long way to go to be fully transparent with its pricing. In particular, I’d like to see WFMS listing significantly more information on fees online, including specific rates for additional fees such as chargebacks and PCI compliance fees. Most importantly, I’d like WFMS to stop burying important information on fees in the fine print at the bottom of the page.
As far as sales gimmicks go, WFMS is currently running one potentially misleading marketing campaign. They are offering up to a $500 rebate for merchants who are switching from another processor to WFMS and a $100 rebate for merchants who don’t currently have a payment processor. We say this is potentially misleading because of the nature of the rebate. There are a few different qualifications that you’ll have to meet to qualify (such as process $500 in transactions within 90 days of opening your account), and WFMS often fails to include the “up to $500” language in their marketing. Keep in mind that you will not necessarily get all $500; rather, WFMS will refund you monthly fees and processing costs up to $500.
As we’ve already discussed, in the past WFMS has not done well communicating important information during the sales process. Merchants (especially those who signed up for merchant services in 2017) are still complaining about the sales team’s failure to disclose important contract terms, especially the early termination fee that was part of the terms and conditions at that time. It’s impossible to say with certainty that this practice has been deliberately encouraged, but the ongoing controversies swirling around Wells Fargo make me skeptical. 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, 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 the website using secure email. Live chat is available for Wells Fargo’s main services; however, they were not able to answer any of my questions about merchant services.
While it’s nice 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 get a hold of 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 basic FAQ and a handful of guides. Fortunately, they offer some useful information in these guides. I like both the Guide to Processing Card Payments and the Cost Management Strategies Guide. I just don’t like how these resources are buried in Wells Fargo’s disorganized website.
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.
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 an F rating, with 3,400 complaints filed against them within the past three years (1,138 of which were filed within the past 12 months). Keep in mind that many of these complaints are not specifically about WFMS, and many details of these complaints are not available.
What is available, however, is a rather lengthy list of government actions against Wells Fargo, including the biggest 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 feeling about doing business with Wells Fargo.
To form a larger picture of the type of service WFMS provides, I’ve read hundreds of user reviews left on sites such as Trustpilot, the BBB, and other third-party review sites. As I read these reviews, I was able to identify several common issues to look out for, including the following:
- Undisclosed Fees: Merchants often complain that they were not told of all the fees that would apply to them before they signed up for the service. In particular, merchants mentioned monthly fees and early termination fees (ETF). While many merchants who sign up with WFMS now won’t have to worry about an ETF, merchants who signed up in 2017 are still dealing with this.
- 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.
- Expensive Terminal Leases: Merchants have complained about not being aware that they were signing up for a three or 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. It’s much more affordable to buy your terminals outright. They don’t cost much these days.
- Withholding Funds & Account Terminations: This can happen for several reasons. Chargebacks and 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.
While no merchant account provider is perfect, these complaints reveal some of the traits of credit card processors that we dislike the most. We’ll keep an eye on these comment boards to see if customer reviews improve over the next couple of years given WFMS’s recent changes to their business model.
Positive Reviews & Testimonials
Wells Fargo Merchant Services includes a few customer testimonials on their site. You’ll find them listed under “Customer Stories” in the Merchant Services Payment Processing section of the site. These testimonials include about a dozen brief comments from merchants in retail and service industries. They praise WFMS for offering them increased security, good customer support, and decreased chargebacks. These clients also like the Clover POS system’s usability and inventory management features. One customer also noted the benefit of being able to receive his funds in as little as one business day.
While we’re always glad when a merchant account provider includes testimonials like this, it’s always good to take these comments with a grain of salt. After all, they are published through WFMS itself.
Outside of these testimonials that WFMS gathered, we were not able to find any more positive customer reviews. If you’ve had a positive experience with WFMS, please tell us about it in the comments section below.
SPOILER ALERT: If you’ve read 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 with ho-hum customer support. 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 ongoing controversy engulfing Wells Fargo 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 scores 3 out of 5 stars for now.
We’ll keep monitoring WFMS to see if the aftermath of their parent company’s public relations disaster leads to improvements in service. I’m hopeful that the recent changes regarding contract terms and the elimination of ETFs for many merchants will lead to more positive reviews in the coming years. If you want to deal with a big, stable bank as your payment processor, try out Chase Merchant Services. They have solid features and a reputation for fairness. Otherwise, check out our merchant account comparison chart to see the best-rated merchant service providers in the industry.
We've done in-depth research on each and confidently recommend them.