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The Truth About Third-Party Payment Processing

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Tom DeSimone
Based in New York’s Hudson Valley, Tom has written for Merchant Maverick since 2013. His work is cited by publications including TechCrunch, Washington Business Journal, and Bank Advisor. He currently serves as Partner Marketing Manager, where he works to connect exceptional brands with the readers they serve best.
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    What about bad card history?
    Does that affect the third party processors?…

      Emily Hale

      Hi Lawrence,

      In general, you face much fewer “hoops” to jump through when you sign up with a third party processor. Companies like Square, for instance, don’t run any credit checks before approving your account. However, I would urge you to read and understand the merchant terms. Accounts that have higher than normal chargeback rates or very inconsistent volumes may face account stability issues. Take a look at our post, What Is Square And How Does it Work? if you’d like to learn more about the risks and benefits of using a third party processor like Square.


        This is a very useful distinction. I see the examples of aggregators are PayPal Here and Square, which leads me to believe you’re talking just about the dongles. How would Stripe or Braintree fit in? Are they also aggregators who have a merchant account themselves on the back end (e.g., Chase doing the processing for Square)?

          This comment refers to an earlier version of this post and may be outdated.

          Dr Vincent McIntyre

          This is great information. I was about to sign a contract for mobile processing service with Bank of America for my business. Your knowledge and posted reviews has given us the ability to identify certain hidden clauses and omissions by the sales rep concerning the contract.

          Needless to say, your honest reports has helped us avoid a potental disaster!!

          Thanks so much
          Dr McIntyre

            This comment refers to an earlier version of this post and may be outdated.

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