6 Merchant Account Complaints Revealed

Tuesday, June 12th, 2018

Choosing a merchant account provider should not be taken lightly. When it’s time to get one, make sure you know all the facts and figures before you enter into a contract. To help you make a decision, we have revealed the six most common merchant account complaints, so you can avoid them.

1.    Lengthy Contracts and Automatic Renewals

Oftentimes, merchants make their decisions by looking at dollars and cents they pay in monthly fees and rates. Unfortunately, many other items drive up final costs. One of the most common merchant complaints is that merchants didn’t know the length of their contracts and that they would automatically renew after the initial period ended. If you are stuck in a lengthy contract that renews unless you cancel it before the end of the agreement, you can be stuck in a bad, costly contract for a very long time.

Negotiate for the shortest contract possible and find out what you are required to do if you are unhappy and want to take your business to another provider. Some merchant account providers require businesses to submit cancellations in writing, often 30 days before the end of contracts. Knowing what you need to do before you have to can save you a lot of headaches later.

2.    Exorbitant Early Termination Fees

Piggybacking on the issues with long contracts are the expensive fees that are charged if you want to cancel an agreement early. Some merchant account providers charge early termination fees of up to $400. Many merchants complain that they were never made aware of these fees. In many cases, the fees are buried in a contract’s terms and conditions. Ask sales representatives upfront about early termination fees, so you are not surprised.

3.    Inconsistent, Poor, and Non-Existent Customer Service

Unfortunately, once a merchant account provider gets your business, it is not rare for customer support to go downhill. Many customers have complained about unanswered emails, long holds on the phone, inconsistent information, and being passed from one representative to another without resolutions.

Before signing up, know your providers’ support channels. Find out if they offer 24-hour support, live chat, and its approach to customer service and problems.

4.    Not Knowing About PCI Compliance Fees

Businesses that are new to merchant accounts and accepting credit and debit card payments online often are unfamiliar with PCI compliance, the fees they pay

to stay in compliance, and the penalties that come with those that don’t follow the rules.

Any merchant that accepts credit card payments online must comply with regulations stipulated by the Payment Card Industry (PCI). To keep merchants in compliance, merchant account providers charge annual fees that range between $75 and $400. Many customers complain about the fee because it wasn’t clearly explained or mentioned at all. Since this is a PCI charge and not one imposed by your merchant service provider, you won’t find it on your contract. Likely, the first time, you see it is on your bill.

The best way to prevent sticker shock is to ask your merchant service provider about it. Since providers don’t set the charge, they may not be able to give you an exact figure. However, they should be able to offer you an estimate.

5.    Long Merchant Account Funding Holds

Holding funds for extended periods of time is a merchant account complaint that you will find throughout the digital space. There are numerous reasons that providers can hold funds, including questionable transactions, larger-than-usual transaction sizes, or an uptick in average transaction volume.

This is why it is important to be honest when you are applying for an account. Let providers know your average ticket amounts and an accurate picture of your transactions volumes. If you are expecting a higher ticket amount or a major increase in sales, let the provider know in an attempt to avoid an unnecessary hold.

Also, make sure your merchant account providers processes payments for the type of business you operate. Some providers won’t work with high-risk merchants, such as gambling, adult entertainment, and supplement businesses. If you get caught engaging in prohibited activities, they cannot only hold your funds but close your account.

6. Pricey Leasing Agreements

Merchants who don’t want to buy expensive equipment often enter into leasing agreements. In most cases, merchants are signing up for leasing agreements with third parties. Often, merchants don’t know the terms of the lease and other conditions of the agreement. When an issue with a charge or an equipment comes up, merchants get frustrated because the merchant account provider is unable to help them. Any issues are between the merchant and the leasing agent. Also, most leasing agreements cannot be cancelled. Therefore, you end up paying out the end of the lease whether you cancel it or not.

Additionally, most leasing agreements are lengthy and much more expensive than if merchants would have purchased the equipment on their own.

Sometimes, the best way to avoid problems is to ask the right questions and do your research before you enter into an agreement with a merchant account provider.